Not everyone reaps the benefits and low mortgage Environment.
As mortgage lenders tighten Their belts, affordable home loan has reached its lowest level since February 2014, so promising home buyers with bad credit scores are trying to get a loan, reports Bloomberg News.
The Association of Mortgage Bankers, which monitors the index of affordable housing loans, fell monthly in eight of the nine months of this year. The index fell by 35 percent year on year.
One of the sharpest examples is the tightening measures taken by Ginnie Mae, which guarantees loans mainly to lower-income borrowers and first-time home buyers.
In January 2019, 44 percent of Ginnie Mae’s loans were issued to borrowers with a FICO score below 700 and a debt-to-income ratio of over 40 percent. That number fell to 38 percent in January and fell to 36 percent in August.
For Ginnie Mae refinancing loans for borrowers with the same profile, the agency reduced the number of loans from 38.5 percent in January 2019 to 12.8 percent in January this year. In August, these borrowers accounted for only 5 percent of Ginnie Mae’s refinancing loans.
According to a Bloomberg News report, the tightening of Ginnie Mae means that mortgage bond issues fell by $ 3 billion year on year.
Meanwhile, the mortgage market is buzzing for borrowers with good credit who are in a hurry to use low rates to buy or refinance. The supply of mortgage bonds is expected to reach its highest level since 2003, with a gross issue of USD 2.8 trillion.
[Bloomberg] – Erin Hudson