Underwriting

Despite “color blind” underwriting algorithms, loan denial rates on mortgages that were not backed by the Federal Housing Administration and the VA skewed heavily toward minority groups, according to a study by The Markup.

The expanded credit access in its automated mortgage decisioning goes into effect in mid September.

As rising home valuations force first-time home buyers out of the market, expect to see non-owner-occupied loans to increase.

More than two-thirds surveyed said they expect to make less money over the next three months as price reductions ramp up along with a market shift to purchases.

It’s getting easier to close bigger loans for higher-priced properties, but credit is expanding slower for first-time buyers.

Some applaud the agency's recent delay of the mandatory compliance date for a new Qualified Mortgage standard. Others say it leads to more uncertainty for lenders, opens the door to additional changes and enables some companies to loosen their underwriting.

The consumer bureau's revamp of criteria for "qualified mortgages," a special regulatory class of loans free from liability, emphasizes pricing instead of a borrower's debt-to-income ratio.

But existing deals are likely to experience issues resulting from higher defaults, faster prepayment speeds.

Whether Ginnie issuance increases in the future may depend in part on the extent to which the Biden administration wishes to tap the FHA to promote affordable housing and homeownership.

Lenders also increased jumbo product availability as well as rolling out new SOFR-indexed ARMs.