Lending Insiders: “We will NOT MAKE BORROWING EASY”

Nine out of 10 senior loan executives say that their companies will not be making it easier to get a home loan in 2016. According to Fannie Mae’s Mortgage Lender Sentiment Survey, despite the fact that a year ago many of these same executives said that they planned to make homeownership more accessible this year, now they are backing off of those plans. In fact, they are less likely than ever to ease lending standards, the report showed.

“The trend toward easing of credit standards appears to be tapering off,” said Doug Duncan, chief economist at Fannie Mae, pointing out that things probably would have looked even bleaker if the survey had been conducted after the release of a weak May jobs report. Despite a clear disinterest in making home loans easier to access, however, lenders do seem cautiously optimistic about the market in general. Mortgage loan demand is about the same as last year, while refinance and profit margins are slightly higher, although most lenders expect the demand for refinancing to fall in the latter half of 2016.

Lesson Learned:

It’s not going to be getting easier to get a traditional home loan, so if you can offer buyers another option you will be able to tap into an underserved portion of the market.

Point to Ponder:

Should lenders loosen their standards?

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About the Author

Carole Ellis is the host of Real Estate Investing Today, a popular 9-minute daily podcast focused on educating real estate investors about the important topics that will make their investing SAFER, FASTER, and MORE PROFITABLE. She's also the editor of the Bryan Ellis Investing Letter. She has more than a decade's worth of experience in and reporting on the real estate industry and, additionally, has written dozens of courses on the topic. Carole lives in Kennesaw with her husband, Bryan, and four children. She believes wholeheartedly that your best investment is always your OWN education.

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Jeff Deleon a couple of years ago

For home buyers and those looking to refinance, mortgage brokers are an alternative for some looking to obtain loans. Mortgage brokers can help those who have tricky financing needs or not so good credit. Thank you for the article.

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