Mortgage Lenders Still
Shunning Subprime Borrowers
While the foreclosure crisis is nearing an end, it still affects lenders' attitudes toward risk. Only 8 percent of mortgage origination volume in the second quarter went to "subprime" borrowers with credit scores of 660 or lower, researchers at the Federal Reserve Bank of New York found. In comparison, 50 percent of U.S. mortgage origination volume went to borrowers with credit scores of 780 or higher. "Underwriting standards for mortgages have loosened only slightly in the years since the Great Recession," the researchers wrote. The study found that the median Equifax Risk Score of a mortgage borrower in the second quarter of 2015 was 764 but had fallen as low as 707 during the heyday of subprime mortgages in 2006. Many observers believe that credit standards remain too tight.
From "Mortgage Lenders Still Shunning Subprime Borrowers"
American Banker (08/14/15) Wack, Kevin
While the foreclosure crisis is nearing an end, it still affects lenders' attitudes toward risk. Only 8 percent of mortgage origination volume in the second quarter went to "subprime" borrowers with credit scores of 660 or lower, researchers at the Federal Reserve Bank of New York found. In comparison, 50 percent of U.S. mortgage origination volume went to borrowers with credit scores of 780 or higher. "Underwriting standards for mortgages have loosened only slightly in the years since the Great Recession," the researchers wrote. The study found that the median Equifax Risk Score of a mortgage borrower in the second quarter of 2015 was 764 but had fallen as low as 707 during the heyday of subprime mortgages in 2006. Many observers believe that credit standards remain too tight.
From "Mortgage Lenders Still Shunning Subprime Borrowers"
American Banker (08/14/15) Wack, Kevin
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