Appraisal Fails Still Causing Issues Despite Improving Markets

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Posted To: MND NewsWire

While it trails well behind credit history and debt-to-income levels, collateral problems are consistently the third most frequent cause of loan denials. CoreLogic said Home Mortgage Disclosure Act (HMDA) data for 2015 show collateral issuers were the reason behind 13.7 percent of the 450,000 first-lien purchase mortgage applications that failed approval. The share of loans turned down for collateral reasons has remained consistently in the 12-13 percent range since home prices began to recover in 2012. But Yanling Mayer, writing in CoreLogic’s Insights blog, says there is a wide variation in collateral denials on a geographic basis, ranging from 7 percent in Delaware to 22 percent in Michigan. While lenders don’t provide specific causes in their HMDA reports, Mayer says appraisals coming in…(read more)

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