6 Ways Relaxed Underwriting Is Unlocking Mortgage Credit
August 10, 2015 9:00 AM
The range of loan products offered by mortgage lenders and investors has been narrow since the housing crisis, but a few underserved niches are starting to make a comeback.
Here are six ways relaxed underwriting standards are unlocking new mortgage lending opportunities.
Smaller Down Payments
The share of high loan-to-value purchase mortgages is at a two-year high, and the average down payment for single-family homes, condos and townhouses was 14.8% in the first quarter, the lowest rate in three years.
Alt-A Makes a Comeback
Impac Mortgage, the former alternative-A lender that managed to survive the financial crisis, is lowering its underwriting guidelines in hopes of extending more credit to self-employed borrowers.
Big Boys Funding Home Flippers
Some high profile investment companies have started competitively financing home buyers that fix houses up and sell them at a profit.
Marketplace Lenders Boost Small-Balance CRE Loans
A growing number of players in the emerging marketplace lending sector are specializing in the underserved small-balance commercial real estate loan market.
CMBS Originators Get More Competitive
Small banks and nonbank lenders are getting more competitive by originating commercial mortgages with lower credit quality than loans originated by large banks.
Technology Drives Real Estate Crowdfunding
Benworth Capital recently launched a $50 million capital raise for a technology-based community funding platform for real estate, adding to the field of players participating in this selective short-term loan market.
