Lending standards are down and demand is up for mortgages
Posted on Tuesday, August 4, 2015 at 10:21:32 AM
A federal survey of loan officers found lending standards for mortgages eased up during the second quarter.
Research indicated that lending standards loosened for nearly all loan types. However, government-insured and subprime loans did not become easier to obtain. The eased standards could help move along a thus-far sluggish recovery.
Banks made obtaining all sorts of residential financing easier, but this is especially true of jumbo mortgages that meet qualified mortgage rules. These home loans are too large to be backed by state-sponsored mortgage companies.
As residential financing has become easier to obtain, demand for these loans has also increased. Of the 71 domestic banks and 23 U.S. branches and agencies of foreign banks surveyed, 44 percent indicated that consumer demand for mortgages had risen, according to MarketWatch. Meanwhile, a mere 5 percent noted weaker demand.
The increasing demand for residential financing, as well as credit card loans and auto financing, is a result of an increased ability to spend on the part of consumers. The progress of the economic recovery from the recession, while slow, has been enough to alter the way American look at certain types of spending. More are prepared to buy homes and vehicles than in recent years, as they find themselves on more stable financial ground.