Tighter Lending Standards Results in Increased Mortgage Loan Rejections
As part of my new-to-me blogger reblogs, I happened upon this blog post by Stephen. This information is not new to us....but this post was short, to the point and clear. Nice representation of this issue. Please visit the original post also.
Tighter Lending Standards Results in Increased Mortgage Loan Rejections
A Wall Street Journal article reports that tighter lending standards has resulted in increased mortgage loanrejections in 2010. According the authors, Nick Timiroas and Maurice Tamman, mortgage lenders declined
"In all, the nation's 10 largest mortgage lenders denied 26.8% of loan applications in 2010, an increase from 23.5% in 2009, according to an analysis by The Wall Street Journal of mortgage data filed with banking regulators."
On the interactive chart that accompanied the article in the Wall Street Journal, the hot spots where mortgage applications have been rejected. It may come as a surprise that the states of Texas, Mississippi, and Vermont were hot spots for loan rejections. Florida and Michigan rejected loans but not nearly as many as the three hot states for rejection. California and Nevada rejected fewer than Florida and Michigan.
In another Wall Street Journal article, it was reported that over the past few weeks mortgage applications have fallen. This suggests that low mortgage rates have failed to boost home sales. As stated in the article "Tight credit conditions are one reason that loan demand remains weak."
According to the Mortgage Bankers Associations, the group that has tracked weekly mortgage applications since 1990, applications have been down three out of the last four weeks. As reported in the June 22, 2011 Press Release - Weekly Application Survey applications for the week were down 5.9% from one week earlier.
Tighter lending standards and falling applications will lead to fewer residential real estate contracts written and slowing sales for the coming months. So it should be no surprise to anyone that June, July and August in the housing market will be slow. Last year the tax incentives accelerated sales into the first quarter of the year creating a vacuum of sales during the summer of 2010. This year lack of credit, loan rejection and consumer confidence, yet to completely return, may well be the biggest drag on residential home sales.
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Stephen Howell came to Annapolis to sail the Bay in 1994. What he discovered was a whole new lifestyle. Ever since Stephen Howell has been successfully helping others make the most of Annapolis. You'll find that with the right professional by your side, you can Live the Lifestyle and Live in Annapolis.
Stephen Howell and Rocky (his lab-mix from the SPCA of Anne Arundel County in Annapolis) live on the
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