Is Credit Easing? Depends on Where You Look

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Posted To: MND NewsWire

There is easy money, which in mortgage lending terms would be exemplified by underwriting standards in the 2005-2008 period, and there is tight money, the state of mortgage lending in the years immediately thereafter. Where does underwriting stand today? Archana Pradhan writes in CoreLogic’s Insight blog that the answer depends on the standards that are examined. Compared to the period immediately after the crash, guidelines have clearly been loosening. Pradhan points out that Fannie Mae upped the maximum loan-to-value (LTV) ratio of loans it would accept to 97 percent in December 2014, a moved followed by Freddie Mac a few months later. Last July Fannie raised its maximum debt-to-income (DTI) level from 45 to 50 percent. DTIs and LTVs, along with credit scores, are the most important factors…(read more)

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