Credit standards spur debate among residential financing experts
Posted on Wednesday, November 5, 2014 at 9:14:03 AM
Is it too hard to acquire residential financing today? This is the important question being asked by experts and analysts involved in the housing market, and like many debates, the opinions are divided.
In an opinion piece published by USA Today, the Mortgage Bankers Association's president and CEO David Stevens argued that lending standards are too strict at the moment. The result is that qualified borrowers are getting denied, and that hurts that housing market as a whole.
He explains that this issue is with government regulations, not lenders. Lenders are tasked with navigating the current regulatory environment and have to cope with stiff penalties should they slip up. Stevens believes that a solution would be more relaxed rules so lenders and borrowers can work together.
According to Zillow, it may be too early to tell whether lending standards are too tight or not. The Dodd-Frank Act has only been in effect for a few years, and not all provisions have been implemented that will alter the current regulatory landscape.
For the benefit of everyone, Zillow recommended that borrowers do their homework ahead of time, including the math involved with residential financing. This will help lenders get the best deal possible.