Experts: Problems remain for residential financing standards
Posted on Wednesday, September 17, 2014 at 9:53:50 AM
How easy is it really to get a mortgage these days? According to several industry experts, problems exist with residential financing lending standards, affordability and regulations that are keeping the housing market recovery from taking off.
Panelists at the recent Bipartisan Policy Center's Housing Summit agreed that the issues are growing increasingly complex, HousingWire reported. FICO's Andrew Jennings pointed to affordability as a reason why buyers can't get approved, while Paulina McGrath, of Republic State Mortgage, cited lender uncertainty instead.
On the other hand, regulations could also be impacting residential financing, the news source noted. Rules are causing costs to rise and hampering the ability of some lenders to conduct business.
"The high cost of servicing loans, greater level of risk aversion (is part of it), but all that said, the bigger factor is the regulatory environment," Urban Institute's Jim Parrott said at the summit, HousingWire reported. "There's a set of conscious decisions to increase consumer protections and risk mitigants, but the bigger impact and concern is uncertainty around the underwriting."
A similar sentiment was expressed by Federal Reserve Chair Janet Yellen in testimony before Congress, according to American Banker. She highlighted certain federal policies that are making it tough for the housing recovery to continue, such as the recent fee hike from the Federal Housing Administration.