Tag Archives: Loan-to-Value Ratio

The MBA reports that mortgage credit availability fell for the third straight month in May, dropping to levels last recorded in January 2013.

The MBA reports that credit standards are becoming more restrictive, as its Mortgage Credit Availability Index drops to its lowest level since March of 2013.

Overall refinance volume rose slightly in April, but remained at levels more comparable to those seen in 2008, according to the latest from FHFA. Roughly 20,000 refinances were completed through the Home Affordable Refinance Program (HARP) in April, bringing total HARP refinances to approximately 3.2 million since the program's inception.

Compared to the prior period, the nation’s average Borrower Health Score was up 2.8 percent to 82.2, according to LendingTree, rebounding from the third quarter’s 1.6 point drop. The Borrower Health Score is calculated using the weighted average of credit score, loan-to-value ratio (LTV), and overall “lendability” of loan seekers in each state throughout the quarter.

In the years leading up to the economic downturn, lenders became more aggressive and eased requirements in order to increase volume and satisfy investor demand for securitized commercial real estate products. Loans originated in 2004 and 2005 generally had a lower loan-to-value (LTV) ratio than those originated in 2006 and 2007. Since the majority of these loans have ten year terms, the 2004 through 2007 loans will come due in the next three years.

With Fannie Mae enacting tighter requirements on eligibility for loan purchases, experts at the Urban Institute's Housing Finance Policy Center are speaking out against the move. In a blog post on the Urban Institute's Metro Trends Blog site, the center's Laurie Goodman and Taz George said, "This change places yet another barrier in front of low- and moderate-income families, who are already facing a tightening credit box." They also commented that if Fannie Mae's intent was to reduce risk, "this was a crude way to accomplish it."

Recent findings released by online lender exchange LendingTree reveal that the financial health of prospective borrowers dipped in this year's third quarter after seeing a sizable improvement in the second. The company attributed the slight decline in borrower health to rising home prices, which boosted loan-to-value ratios across the country to a national average of 89.8 percent and put more financial pressure on potential borrowers. National health also experienced a slight drag from a dip in the average credit score of borrowers.

Household net worth jumped by $3 trillion in the first quarter as real estate values grew $836 billion, the Federal Reserve reported Thursday in its quarterly Flow of Funds report. With a drop in mortgage debt, owners' equity in real estate increased a sharp 2.5 percentage points to its highest level since 2007. Owners' equity as a percentage of real estate value has been on a steady upward trajectory since dropping to 36.3 percent in the first quarter of 2009.

On an annual basis, 2012 was the strongest year for originations since 2007, according to Lender Processing Services' December Mortgage Monitor.

Closing rates on all types of mortgage loans increased in December, according to data from Ellie Mae's Origination Insight Report.