Tag Archives: LTV

Equifax announced the availability of Equifax Dimensions, a new product created to deliver a more in-depth picture of past credit behavior to predict future trends. Users of the new solution can see up to two years' worth of detailed consumer credit activity, allowing them to identify consumer patterns such as a borrower's financial ""breaking point"" that will lead to default and which consumers are most likely to open new accounts.

Tight lending standards may be keeping some prospective borrowers out of the market, but according to LendingTree, consumers overall are increasing their likelihood of getting approved for a home loan with higher credit scores and lower loan-to-value (LTV) ratios. Over the last year, average credit scores for prospective borrowers rose by more than 10 points, LendingTree revealed in a Q2 borrower health report. At the same time, average LTVs improved, falling 1.6 percent. According to the report, prospective borrowers in Washington D.C. have the strongest profile when it comes to qualifying for a home loan.

Even though both the United States and Europe experienced price declines starting in 2007, the increase in mortgages default rates over time was much more severe in the United States compared to Europe. For example, in the United States, prices fell 7.7 percent from 2007 to 2008, and default rates spiked 93.2. In Europe, prices fell 6.8 percent from 2008 to 2009, yet mortgage defaults increased by 11 percent. The report authors attributed the difference to two specific regulations used in Europe to prevent mortgage defaults.

Fueled by a $370 billion jump in the value of household real estate, household net worth grew $1.7 trillion in the third quarter to $64.8 trillion, the Federal Reserve reported Thursday in its quarterly Flow of Funds report. And, while the value of owner-occupied household real estate increased, total residential mortgage debt fell $85.8 billion. As a result, owners' equity increased almost $390 billion. Homeowners' equity as a percentage of the value of the real estate rose to 44.8 percent, the highest level since 2007, according to the report.

Fannie Mae and Freddie Mac refinanced more than 90,000 mortgage loans through the Home Affordable Refinance Program (HARP) in September, bringing the program's total reach to 1.7 million since its inception in 2009, according to the latest refinance report from the Federal Housing Finance Agency. The rate of HARP refinances has increased since the program was revised in the fall of 2011 to expand borrower eligibility. Year-to-date, 709,000 loans have been refinanced through HARP, already far exceeding last year's total of about 400,000.

While the housing market has seen some recent positive signs, many still wonder when a true recovery will occur. Distressed real estate continues to hold a market-wide recovery at bay, and predicting a timeline for bringing distressed real estate to manageable levels is difficult at best. After tracking 5,021 properties that became distressed between April 2005 and July 2012, ProTek released a report detailing its observations. ProTek found more than 20 percent of properties remained distressed for more than five years, and LTV was found to be ""a key driver"" in the transition into foreclosure.

Nearly 99,000 homeowners refinanced their mortgages in August through the Home Affordable Refinance Program (HARP), the Federal Housing Finance Agency (FHFA) said Tuesday. Since the beginning of this year, when a broader group of borrowers were made eligible for the program, the federal government's HARP initiative has put 618,217 homeowners with loans owned by Fannie Mae or Freddie Mac into new mortgages with lower interest rates. According to FHFA, HARP is on target to reach a million borrowers in 2012.

Freddie Mac reported net income of $577 million for the first quarter of 2012. That combined with $1.21 billion in unrealized gains on securities investments resulted in comprehensive income of $1.79 billion. The GSE's finances didn't sit in the black for very long, however. After a $1.8 billion dividend payment to its primary shareholder, the U.S. Treasury, Freddie's net worth was a deficit of $18 million. Looking at the GSE's loss mitigation numbers, short sales almost equaled the number of loan modifications during the first quarter.

Mortgage lenders remain cautious in terms of credit quality, down payments, and valuations, as evidenced by the findings outlined in the new Origination Insight Report generated by Ellie Mae. The report series tracks the current lending environment for refinance and purchase mortgages, and it indicates the average credit score for loans approved and closed is steadily rising, while acceptable loan-to-value (LTV) ratios are declining. Ellie Mae says mortgage loans closed in February carried an average credit score of 750, with an LTV of 76 percent.

The commercial real estate (CRE) sector faces $362 billion in maturing debt this year, according to the latest estimates from Trepp LLC. For the five-year period of 2012 to 2016, the company's research team estimates $1.73 trillion of CRE maturities, with the largest one-year sum of $371.1 billion dropping in 2013. They also reported that nearly two-thirds of the maturities through 2016 are underwater or close to sinking underwater, which could reduce borrowers' chances for extending the loan term upon reaching the balloon date.