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Tight Mortgage: The Light at the End of the Tunnel


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Trends & Current Events

mortgage note

 

The attractive property values and rock bottom interest rates permeating the current real estate market have been difficult to bear for aspiring home owners, as home financing has been difficult to come by. With the foreclosures and mortgage default scenarios being what they are, banks have been impossibly stringent in their scrutiny of mortgage applications, with only those applicants on the high end of the credit score spectrum passing the muster (pretty much the same for rental properties as well).


That said, happier times are around the corner, as events in 2012 have been much more optimistic. With an improvement in the job market, lower delinquencies and improvements in home prices, a loosening of credit norms is being discussed more openly.


A survey of the Professional Risk Managers’ International Association (PRMIA) revealed that lenders are now more optimistic regarding the repayment of all kinds of loans ranging from car loans to student loans. The number of respondents expecting a rise in delinquencies dropped 12 points from 47% to 35%. Collaborating market expectations is the latest Lender Processing Service’s (LPS) Mortgage Monitor survey, which reported that mortgage delinquencies in February 2012 dropped 5% month-on-month and a heartening 14% as compared to the same time last year.

Lenders are not yet ready to start handing out mortgages left and right, but the market is making a slow but gradual move towards a more positive condition. For more details on this story, click here.



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