As mortgage rates rise and refinancings fall dramatically, banks are in search of new business. That, in turn, has them easing lending standards for some borrowers, according to a new monthly survey from the Mortgage bankers Association.
"The increase was primarily driven by increases in product offerings that allow cash-out refinancing, and some increase in offerings for borrowers with higher LTV's, or lower credit scores" according to the report.
It is likely no coincidence that standards are eaing as rates rise and mortgage applications fall. Total mortgage applications were down 47 percent last week from a year ago. Refinances, which had been the banks bread and butter during the housing crash, are down 59 percent from a year ago. Applications to purchase a home are up just 5 percent.
As volumes slow and rates rise it makes sense that mortgage lenders ease some of their over lays as they have the time to focus on slightly lower quality loans or loans that require more intense underwriting.
By CNBC's Diana Olick
Author:Kim Guest Phone: 864-918-0066 Dated: August 7th 2013 Views: 333 About Kim: ...
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