More And More Lenders Easing Credit Standards To Make Loan Qualifications A Bit Easier

More And More Lenders Easing Credit Standards To Make Loan Qualifications A Bit Easier

  In a news article Iv'e read from, it states that more lenders are expected to ease credit standards. It reads that in the most recent Fannie Mae sentiment survey more lenders have lowered credit score standards recently. This was the 2017 second quarter survey in which mortgage lenders say they expect even further easing in the months to come. 

 The lenders who say they have eased credit standards over the last three months have gradually increased over each quarterly survey since the end of the year survey for 2016. When anticipating next quarters survey there are even more lenders who say they plan to ease credit standards for GSE eligible, non-GSE eligible, and government loans.

 Mortgage lenders have major concerns about economic conditions, which is leading to changes in their lending standards. In government, GSE eligible, and non-GSE eligible loans, the lenders who reported mortgage purchase growth on the 2017 second quarter survey has dropped to the lowest reading in years. This drop in mortgage demand also reflects in the Fannie Mae National Housing Survey, in which the number of consumers who reported now is a good time to buy is at a record low.

 The result of the two surveys show that  tight inventory has home prices rising, weighing on affordability and home sales. Lenders are finding less demand for mortgage products bringing more and more lenders to ease credit standards to attract buyers.

 Doug Duncan, the senior vice president and chief economist at Fannie Mae says, " Expectations to ease credit standards climbed to survey high points as more lenders reported increasing slowing mortgage demand and increasing concerns about competition from other lenders". He also states that the easing of credit standards may also come from increasing pressure to compete for declining mortgage volume. 

 With all of this being said, we should expect to more lenders easing credit standards in the near future.

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Dante Escobar Headshot
Phone: 863-259-9307
Dated: June 30th 2017
Views: 186
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