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Regulators' New Target

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34 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t ORIGINATION the latest survey: realtors Want More lender support Realtors say mortgage lenders could do more to make affordable housing accessible. t wo-thirds of Realtors think lenders could help attract more buyers with better pricing options, according to a recent survey. Working with a public polling firm, New Jersey-based TD Bank released results last month from a survey it conducted with more than 150 Realtors around the United States. One in four respondents chalked up buyer reluctance to overpriced properties. By the same token, Realtors estimated that only a fifth of their buyers knew about home loan affordability programs available through lenders. When referring lenders, Realtors seemed to put a pre- mium on certain qualities. Most said they considered closing loans on time a lender's most important attribute and felt it was easier to work with banks focused on helping home- buyers. Two in five said they looked for banks that put buyers ahead of the lending process. More than a third said they stuck with the name of a preferred lender in every real estate deal. "What we're hearing from Realtors is that it's critically im- portant for lenders to work with them to help their customers," Malcom Hollensteiner, director of retail lending products and services for TD Bank, said in a news release. Along some of the same lines, J.D. Power released survey results last year that found first- time homebuyers expressed less confidence in their knowledge about the lending process than repeat buyers and those who refinanced their loans. The firm reported a seven-year high among customers more familiar with the process. Realtors responding to TD Bank's own survey said roughly three out of five of their buyers came to them with questions about the lending process in recent sales. Three quarters of survey re- spondents wanted better commu- nication between lenders and their buyers about the loan process. Hollensteiner called the "right lender" one that outlines the lending process early and remains "accessible, responsible, and transparent" to buyers. "The survey findings reveal that banks need to provide more loan choices designed to meet the needs of today's borrowers," Hollensteiner said. Mortgage credit availability tightens Credit offerings shrink across most categories. a fter expanding for three months straight throughout the sum- mer, mortgage credit access tightened up slightly in August, the Mortgage Bankers Association (MBA) revealed in a recent report. MBA's Mortgage Credit Availability Index (MCAI), a gauge of credit access based on borrower profiles and underwrit- ing criteria at lenders nationwide, slipped to 116.1 in August from 116.4 in July, the group reported. A decline indicates tighter mar- ket standards overall. Both the conventional lending and government-focused indices edged down, each declining less than a percentage point from July. The MCAI has increased for most of 2014, rising in six of the year's first eight months as lenders expanded their jumbo loan offerings to meet elevated demand. Those gains have been tempered by tightening in other categories as a result of new regulations guiding lending criteria. Though the headline index was down in August, tightening wasn't uniform across the board, said Michael Fratantoni, chief economist for MBA. "While overall access to credit tightened in August, we did see some loosening in certain seg- ments of the purchase market," Fratantoni said. "In particular, lenders instituted additional offerings of loan programs like the [Federal Housing Administration's] 203(k) home improvement program and one- time-close programs for financing new construction." Both loan types fall outside the traditional home finance market: FHA 203(k) loans allow borrowers to include renovation expenses in their loan amounts, while one- time-close loans streamline the purchase and financing of new construction projects. "What we're hearing from Realtors is that it's critically important for lenders to work with them to help their customers." — Malcom Hollensteiner, TD Bank

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