Looser Mortgage Lending Standards in 2014

The Zillow Mortgage Access Index, which shows how loose or tight mortgage credit standards are, rose by 18.3 points from the level of 51.1 in the end of 2013 to 69.4 in the end of 2014. This indicated loosening of the credit standards on a year-over-year basis.

On a quarter-over-quarter basis, the Index experienced a slight decline. It dropped down by 2.1 points from 71.5 in the third quarter of 2014 to 69.4 in the fourth quarter of the year. Still, this quarter-over-quarter decline has very small magnitude compared to the size of the year-over-year increase in the Index.

Over the course of two calendar years from the end of 2012 to the end of 2014, the Zillow Mortgage Access Index rose by more than 41 points. From the end of 2009 to the end of 2014, the growth in the Index was 0.3 points. Between the end of 2009 and the end of 2012, it experienced practically no upward movement, which indicates loosening of the mortgage credit standards.

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At the end of 2014, borrowers with credit score lower than 675 were likely able to qualify for a conventional mortgage loan, according to Zillow. For comparison, the lowest credit scores for approved conventional home loans in 2012 were above 700. At the end of last year, borrowers with lower credit score obtained over 50% of the loan offers received by those with excellent credit score. At the same time two years ago, this share was 36.4%.

The share of borrowers with a second mortgage at the end of 2014 was 12%. It was over two times lower at the end of 2012. Back then, it was 4.6%. The share of non-conforming mortgage loans with down payment of 20% was 9.6% at the end of last year. This is their highest share since 2007. For comparison, their share was 6.3% at the end of 2013.



Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info

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