fha mortgage loans, local mortgage broker, midwest family lending

(515) 252-7107

APPLY NOW!

Mortgage Industry News

« Return to Mortgage Industry News

Mortgage Programs Drying Up Like 2008, But For Completely Different Reasons

Tuesday, June 23, 2020

A paper written for the Joint Center on Housing Studies at Harvard University focuses on the causes and effects of mortgage credit tightening in the current COVID-crisis. The author, Don Layton, is a former CEO of Freddie Mac and a Senior Industry Fellow at the Center. One of the biggest pandemic-related issues to emerge in housing finance is the availability of credit. Tightening is being discussed as a major problem, perhaps on a par with the last financial crisis. The implication seems to be that much if not all of that tightening is illegitimate, a failure of government policy that could be avoided with the right actions that do not require subsidies for small business or specific industries. Layton questions this view and examines how mortgages are made today and who sets the credit standards.   The complex structure of mortgage financing that has emerged over the last 60 years has three key impacts that are related to and must be taken into account when trying to reduce unnecessary credit tightening. First, strong stress liquidity is due solely to government support. Second, government agencies are now arbiters of acceptable credit, and third, intermediaries have become a major market force. Further, he says only one of these was clearly intended by the original policymakers.

 

Read Full Article

Testimonial

"Eric was attentive to all my questions and concerns and provided answers in a manner in which I could understand. He sent friendly reminders via email to keep me posted on where we currently stand within the loan process and in the same time kept me accountable for the items that were required for myself to help keep the loan process moving."
Amanda L