Mortgages Rates Rising & QM Standards in 2014 are Loans Hard to Get?

By
Real Estate Agent with Keller Williams Realty

credit ratingAn analysis of home loans showed that 1 in 5 current mortgages would not meet the qualified mortgage safe harbor standard that goes into effect in January.

What the New Rule Means for Borrowers: 

AOL Real Estate: Under a provision in the Dodd-Frank Act, lenders must verify a mortgage applicant's ability to repay the loan. A borrower's debt-to-income ratio must be 43 percent or lower, plus the mortgage rate needs to be close to the national average prime mortgage rate (within 1.5 percentage points for first-lien loans and within 3.5 percentage points for subordinate-lien loans). The new QM thresholds take effect Jan. 10, 2014, which will not only impact lenders' liability, but also consumers' ability to qualify for home loans. 
Read more: http://realestate.aol.com/blog/2013/10/23/dodd-frank-qualified-mortgage-standard/

Marketwatch: “The average credit score among borrowers who received a mortgage in September was 732, down from a peak of 750 a year prior…. To be sure, the bar to getting a mortgage remains high. Applicants who were denied a mortgage in September had an average FICO score of 696 …”
Read more: http://www.marketwatch.com/story/mortgage-lenders-ease-credit-score-standards-2013-10-16

The Toledo Blade: ”…the regulations also could have the unintended effect of making it more difficult for many working-class families to qualify for mortgage loans offered by major banks.” 
Read more: http://www.toledoblade.com/Real-Estate/2013/10/13/Middle-class-buyers-may-feel-squeeze-of-new-mortgage-rules.html 

How are the Banks Doing? 

Charlotee Observer: “SunTrust Banks said Tuesday it will eliminate 800 jobs nationwide, including in Charlotte, the result of a slowdown in its home-loan refinancing business.” “ … with mortgage rates rising this year, lenders have seen weakening demand for refinancing loans. That has led banks, including Charlotte-based Bank of America and San Francisco-based Wells Fargo, to trim the work force that processes those applications.” 
Read more: http://www.charlotteobserver.com/2013/10/15/4390442/suntrust-to-eliminate-charlotte.html#.UmfsWvkWKQA

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Georgia Chatham County Savannah
Groups:
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Daily Housing & Economy Financial Development Reports
Tags:
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Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Don, interesting report. Looks like it may be a bumpy ride for home buyers starting in January 2014. 

Oct 25, 2013 02:05 AM #1
Rainmaker
1,143,971
David Shamansky
US Mortgages - David Shamansky - Highlands Ranch, CO
Creative, Aggressive & 560 FICO - OK, Colorado Mtg

Naw loans are a piece of cake these days. No red tape or issues.... wait sorry I was remembering pre 07.

lol

 

have a good wkd

Oct 25, 2013 05:59 AM #2
Rainer
38,830
Don Callahan
Keller Williams Realty - Savannah, GA
One of The 10 Most Dependable Agents in Eastern US

David,

Yes, those were the days!!

Oct 30, 2013 01:52 AM #3
Rainmaker
1,566,419
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Don, thanks for the link to more about Dodd-Frank. 

Nov 12, 2013 04:29 AM #4
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Rainer
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Don Callahan

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