Feb. 05--Mortgage lenders appear to be loosening their purse strings, largely as a result of major changes recently announced to government-based loan products.
An index on mortgage credit availability calculated by the Mortgage Bankers Association ticked up 1.8 percent in January for all types of loans, including government-backed loans and jumbo mortgages.
The association's findings confirm a January survey of senior loan officers by the Federal Reserve, which found that several large banks have eased lending standards. However, the survey also showed weaker demand for home-purchase loans.
In the past two months, major policy changes have been announced to jumpstart interest in home sales, particularly among first-time buyers. In December, Fannie Mae and Freddie Mac announced plans to begin accepting mortgages with only a 3 percent down payment requirement. On Jan. 26, the Federal Housing Administration reduced the mortgage insurance premiums tied to FHA-backed loans.
Fannie Mae's lower down payment requirements have already taken effect and as a result, 40 percent of mortgage investors have begun to offer versions of it, according to the association. Freddie Mac's 3 percent down payment program is scheduled to begin next month.
The FHA change also is having an effect and particularly among refinancers. Mortgage applications for FHA-backed loans comprised 13.1 percent of all applications last week, from 9.1 percent a week earlier. Applications to refinance existing FHA-backed loans, taking advantage of the lower premiums, rose 76.5 percent last week.
mepodmolik@tribpub.com
Twitter @mepodmolik
