Perspective On The Market
Education and Marketing Needed to Bring Would-Be Borrowers Into Market
According to a recent report by CoreLogic, there was nearly a 50% drop in loan originations in the past decade, but the drop in originations has also correlated with a decline in loan applications. What's even more telling, loans originated during Q4 2016 were some of the highest quality (low credit risk) mortgages since the Millennium.
While one might think this is due to tight underwriting standards, the CoreLogic data shows that most people applying for loans are in the 750 and above credit range, and originations are simply keeping up with application demand.
In other words, tight underwriting is likely not the culprit. Archana Pradhan, economist for CoreLogic, suggests the issue is likely, "the result of potential applicants, particularly borrowers with less-than-perfect credit, being either too cautious or discouraged from applying for a loan..." This apprehension may be due to misconceptions about lending standards, such as needing perfect credit or requiring 20% down to purchase a home.
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This letter is for information purposes only and is not an advertisement to extend customer credit as defined by Section 12 CFR 1026.2 Regulation Z. Program rates, terms and conditions are subject to change at any time. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, 4131316 NMLS #237653