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Serious Delinquency Rate For Home Loans Holds

Data from CoreLogic shows that nationally, 4.6 percent of mortgages were in some stage of delinquency (30 days or more past due including those in foreclosure) in July 2017. This represents a 0.9 percentage point year-over-year decline in the overall delinquency rate compared with July 2016 when it was 5.5 percent.

As of July 2017, the foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, was 0.7 percent, down from 0.9 percent in July 2016 and the lowest since the rate was also 0.7 percent in July 2007.

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Measuring early-stage delinquency rates is important for analyzing the health of the mortgage market. To monitor mortgage performance comprehensively, CoreLogic examines all stages of delinquency as well as transition rates, which indicate the percentage of mortgages moving from one stage of delinquency to the next.

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The rate for early-stage delinquencies, defined as 30-59 days past due, was 2 percent in July 2017, down slightly from 2.3 percent in July 2016. The share of mortgages that were 60-89 days past due in July 2017 was 0.7 percent, unchanged from July 2016. The serious delinquency rate (90 days or more past due) declined from 2.5 percent in July 2016 to 1.9 percent in July 2017 and remains near the 10-year low of 1.7 percent reached in July 2007. Alaska was the only state to experience a year-over-year increase in its serious delinquency rate.

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“While the U.S. foreclosure rate remains at a 10-year low as of July, the rate across the 100 largest metro areas varies from 0.1 percent in Denver to 2.2 percent in New York,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Likewise, the national serious delinquency rate remains at 1.9 percent, unchanged from June, and when analyzed across the 100 largest metros, rates vary from 0.6 percent in Denver to 4.1 percent in New York.”

Since early-stage delinquencies can be volatile, CoreLogic also analyzes transition rates. The share of mortgages that transitioned from current to 30-days past due was 0.9 percent in July 2017, down from 1.1 percent in July 2016. By comparison, in January 2007 just before the start of the financial crisis, the current-to-30-day transition rate was 1.2 percent and it peaked in November 2008 at 2 percent.

“Even though delinquency rates are lower in most markets compared with a year ago, there are some worrying trends,” said Frank Martell, president and CEO of CoreLogic. “For example, markets affected by the decline in oil production or anemic job creation have seen an increase in defaults. We see this in markets such as Anchorage, Baton Rouge and Lafayette, Louisiana where the serious delinquency rate rose over the last year.”

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Loan Performance Remains Strong

Data from CoreLogic shows that, nationally, 5 percent of mortgages were delinquent by 30 days or more (including those in foreclosure) in February 2017. This represents a 0.5 percentage point decline in the overall delinquency rate compared with February 2016 when it was 5.5 percent.

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As of February 2017, the foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, was 0.8 percent compared with 1.1 percent in February 2016. The serious delinquency rate, defined as 90 days or more past due including loans in foreclosure, was 2.2 percent in February 2017, down from 2.8 percent in February 2016.

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Measuring early-stage delinquency rates is important for analyzing the health of the mortgage market. To more comprehensively monitor mortgage performance, CoreLogic examines all stages of delinquency as well as transition rates that indicate the percent of mortgages moving from one stage of delinquency to the next.

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Early-stage delinquencies, defined as 30-59 days past due, were trending slightly higher in February 2017 at 2.14 percent compared with 2.08 percent in February 2016, an increase of 0.06 percent year over year. The share of mortgages that were 60-89 days past due in February 2017 was 0.7 percent, unchanged from a year earlier.

Since early-stage delinquencies can be volatile, CoreLogic also analyzes transition rates. The share of mortgages that transitioned from current to 30-days past due was 1 percent in February 2017, up from 0.8 percent in February 2016. By comparison, in January 2007, just before the start of the financial crisis, the current to 30-day transition rate was 1.2 percent and it peaked in November 2008 at 2 percent.

“Serious delinquency and foreclosure rates continue to drift lower, and are at their lowest levels since the fourth quarter of 2007,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Moreover, the past-due share dropped to 5 percent, the lowest since September 2007. However, current-to-30-day past-due transition rates ticked up in February, and 30-day-to-60 day delinquency rates held mostly steady, recording only a 0.06 percent increase.”

“While national-level delinquency rates declined, the serious delinquency rate remained elevated in many mid-Atlantic and northeast states led by New York and New Jersey,” said Frank Martell, president and CEO of CoreLogic. “February-to-February increases in both 30-day-or-more delinquency rates and in serious delinquency rates were also observed in Alaska, Louisiana and Wyoming relating to the impact of the downturn in the global oil market.”

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

CoreLogic Automates Portfolio Value Monitoring

CoreLogic has launched the Total Home Value for Portfolio Monitoring, which is a self-service, on-demand, fixed-cost solution that helps mortgage lenders and servicers evaluate and understand the collateral value of their mortgage portfolios on a periodic basis. The solution leverages the CoreLogic suite of Automated Valuation Models (AVMs) that lenders and investors have relied on for over 20 years to help make risk management decisions. These best-in-class AVM analytics are the core of the portfolio monitoring solution, delivering high level of accuracy and excellent geographic coverage. Valuation hit rates of 97 percent have been achieved by early client adopters of the solution.

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With Total Home Value for Portfolio Monitoring, organizations can proactively monitor their entire mortgage portfolio to assist in setting adequate reserves, leverage insight into changes in mortgage portfolio valuations to identify trends and risky markets early, and better align risk with business policy. Total Home Value for Portfolio Monitoring also helps comply with regulations that require regular portfolio monitoring.

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This solution frees mortgage lenders, insurers, servicers and investors from budgetary constraints that may have resulted in foregoing current valuation information. With a fixed annual fee and high-performing valuation analytics, Total Home Value for Portfolio Monitoring is uniquely able to help users make better decisions based on current portfolio valuations that accurately reflect market changes.

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“Our clients needed an origination-quality AVM at a price point that allows them to be more proactive when it comes to monitoring collateral values,” said Ann Regan, vice president, product management, Collateral Solutions for CoreLogic. “We created Total Home Value for Portfolio Monitoring to be a flexible, self-service solution that empowers users to update valuations based on business and regulatory need, not cost. This unique packaging approach enables even smaller organizations to gain access to high-quality CoreLogic AVM solutions with no integration costs. We believe this solution will change how organizations value their portfolios, delivering current, high-quality valuations for a fixed fee.”

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

5.3% Of Mortgages Were Delinquent By 30 Days Or More In January 2017

CoreLogic released a new monthly Loan Performance Insights Report which shows that 5.3 percent of mortgages were delinquent by at least 30 days or more (including those in foreclosure) in January 2017. This represents a 1.1 percentage point decline in the overall delinquency rate compared with January 2016 when it was 6.4 percent.
As of January 2017, the foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, was 0.8 percent compared with 1.1 percent in January 2016. The serious delinquency rate, defined as 90 days or more past due including loans in foreclosure, was 2.5 percent, down from 3.2 percent in January 2016.

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Measuring early-stage delinquency rates is important for analyzing the health of the mortgage market. To more comprehensively monitor mortgage performance, CoreLogic examines all stages of delinquency as well as transition rates that indicate the percent of mortgages moving from one stage of delinquency to the next.

Featured Sponsors:

 
Early-stage delinquencies, defined as 30-59 days past due, were trending lower in January 2017 at 2.1 percent compared with a year ago at 2.4 percent in January 2016. The share of mortgages that were 60-89 days past due in January 2017 was 0.7 percent, down from 0.8 percent in January 2016.

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Since early-stage delinquencies can be volatile, CoreLogic also analyzes transition rates. The share of mortgages that transitioned from current to 30 days past due was 0.9 percent in January 2017 compared with 1.2 percent in January 2016. By comparison, in January 2007, just before the start of the financial crisis, the current to 30-day transition rate was 1.2 percent and peaked in November 2008 at 2 percent.

“Steady job and income growth, combined with full-doc underwriting, has led to low early-stage delinquencies,” said Dr. Frank Nothaft, chief economist for CoreLogic. “January’s 0.9 percent transition rate for current to 30 days late is lower than a year ago and much lower than the 1.5 percent average from 2000 and 2001, during which the foreclosure rate was, conversely, lower than it is today.”

“The 30-plus delinquency rate, the most comprehensive measure of mortgage performance, is at a 10-year low and rapidly declining,” said Frank Martell, president and CEO of CoreLogic. “While late-stage delinquencies remain in the pipeline in selected markets, early-stage delinquency performance is stellar and the lowest it’s been in two decades. The continued improvement in mortgage performance bodes well for the health of the market in 2017.”

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Home Prices Up 7% In February

The CoreLogic Home Price Index (HPI) and HPI Forecast for February 2017 shows home prices are up both year over year and month over month. Home prices nationwide, including distressed sales, increased year over year by 7 percent in February 2017 compared with February 2016 and increased month over month by 1 percent in February 2017 compared with January 2017, according to the CoreLogic HPI.

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The CoreLogic HPI Forecast indicates that home prices will increase by 4.7 percent on a year-over-year basis from February 2017 to February 2018, and on a month-over-month basis home prices are expected to increase by 0.4 percent from February 2017 to March 2017. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

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“Home prices and rents have risen the most in local markets with high demand and limited supply, such as Seattle, Portland and Denver,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The rise in housing costs has been largest for lower-tier-priced homes. For example, from December to February in Seattle, the CoreLogic Home Price Index rose 12 percent and our single-family rent index rose 6 percent for all price tiers compared with the same period a year earlier. However, when looking at only lower-cost homes in Seattle, the price increase was 13 percent and the rent increase was 7 percent.”

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“Home prices continue to grow at a torrid pace so far in 2017 and these gains are likely to continue well into the future,” said Frank Martell, president and CEO of CoreLogic. “Home prices are at peak levels in many major markets and the appreciation is being driven by a number of dynamics—high demand, stronger employment, lean supplies and affordability—that will continue to play out in the coming years. The CoreLogic Home Price Index is projecting an additional 5 percent rise in home prices nationally over the next 12 months.”

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1 Million Borrowers Regained Equity Last Year

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CoreLogic released a new analysis showing that U.S. homeowners with mortgages (roughly 63 percent of all homeowners) saw their equity increase by a total of $783 billion in 2016, an increase of 11.7 percent. Additionally, just over 1 million borrowers moved out of negative equity during 2016, increasing the percentage of homeowners with positive equity to 93.8 percent of all mortgaged properties, or approximately 48 million homes.

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In Q4 2016, the total number of mortgaged residential properties with negative equity stood at 3.17 million, or 6.2 percent of all homes with a mortgage. This is a decrease of 2 percent quarter over quarter from 3.23 million homes, or 6.3 percent of all mortgaged properties, in Q3 2016 and a decrease of 25 percent year over year from 4.23 million homes, or 8.4 percent of all mortgaged properties, compared with Q4 2015.

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Negative equity, often referred to as being “underwater” or “upside down,” applies to borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in home value, an increase in mortgage debt or both.

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Negative equity peaked at 26 percent of mortgaged residential properties in Q4 2009 based on CoreLogic equity data analysis, which began in Q3 2009.

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The national aggregate value of negative equity was approximately $283 billion at the end of Q4 2016, down quarter over quarter by approximately $700 million, or 0.3 percent, from $283.7 billion in Q3 2016; and down year over year by approximately $26 billion, or 8.4 percent, from $308.9 billion in Q4 2015.

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“Average home equity rose by $13,700 for U.S. homeowners during 2016,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The equity build-up has been supported by home-price growth and paydown of principal. The CoreLogic Home Price Index for the U.S. rose 6.3 percent over the year ending December 2016. Further, about one-fourth of all outstanding mortgages have a term of 20 years or less, which amortize more quickly than 30-year loans and contribute to faster equity accumulation.”

“Home equity gains were strongest in faster-appreciating and higher-priced home markets,” said Frank Martell, president and CEO of CoreLogic. “The states with the largest home-price appreciation last year, according to the CoreLogic Home Price Index, were Washington and Oregon at 10.2 percent and 10.3 percent, respectively, with average homeowner equity gains of $31,000 and $27,000, respectively. This is double the pace for the U.S. as a whole. And while statewide home-price appreciation was slower in California at 5.8 percent, the high price of housing there led to California homeowners gaining an average of $26,000 in home equity wealth last year.”

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Progress In Lending
The Place For Thought Leaders And Visionaries

Analysis Shows The Extent Of Recovery Gains In The U.S. Housing Market

CoreLogic released a 10-year retrospect of the U.S. residential foreclosure crisis, “United States Residential Foreclosure Crisis: 10 Years Later.” The report examines the path of the residential foreclosure crisis beginning with the relatively healthy years early in the 2000s, through the peak of the crisis, to present day. The country has started to normalize, recording approximately 22,000 completed foreclosures a month. Completed foreclosures reflect the total number of homes lost to foreclosure.

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The foreclosure crisis began in some parts of the country as early as 2007 and later peaked nationwide in September 2010, with approximately 120,000 completed foreclosures occurring during that single month. Throughout the crisis years, CoreLogic monitored completed foreclosures, the foreclosure inventory and the serious delinquency rate. Many economists mark the beginning of the foreclosure crisis with the collapse of two Bear Stearns subprime funds in June 20071, with the crisis deepening as a result of the Lehman Brothers2 bankruptcy in September 2008. Since the beginning of 2007, there have been approximately 7.8 million completed foreclosures nationally. Beginning in Q2 2004 when homeownership rates peaked, there have been approximately 8.6 million homes lost to foreclosure.
 
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At the end of 2016, the national foreclosure inventory, which reflects all homes in some stage of the foreclosure process, included approximately 336,000, or 0.9 percent, of all homes with a mortgage compared with 1.4 million homes, or 3.3 percent, at the peak of the residential foreclosure crisis in September 2010.

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“The country experienced a wild ride in the mortgage market between 2008 and 2012, with the foreclosure peak occurring in 2010,” said Dr. Frank Nothaft, chief economist for CoreLogic. “As we look back over 10 years of the foreclosure crisis, we cannot ignore the connection between jobs and homeownership. A healthy economy is driven by jobs coupled with consumer confidence that usually leads to homeownership.”
 
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During the housing crisis, CoreLogic also reported the number of mortgages in serious delinquency, defined as 90 days or more past due, including loans in foreclosure or REO. The delinquency rate (payments past due by 30, 60 or 90 days) continues to be a leading indicator of troubled markets. At the end of 2016, 1 million mortgages, or 2.6 percent of homes with a mortgage, were in serious delinquency, compared to the serious delinquency peak of 3.7 million mortgages, or 8.6 percent of homes with a mortgage, were in serious delinquency, in January 2010. In recent years, the decline in serious delinquencies has been geographically broad throughout the country with year-over-year decreases from December 2015 to December 2016 in 48 states and the District of Columbia.

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Using Mobile Technology To Improve Lending

Mobile technology can revolutionize the mortgage space when used well. For example, CoreLogic has launched the RealQuest App to provide real estate and mortgage professionals access to detailed property information, transaction history and neighborhood sales data while they’re in the field. Here’s how it works:

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The RealQuest App gives users access to the nation’s leading property information database and search engine, RealQuest, which covers 3,100+ counties and 99.9 percent of all U.S. property records. It is designed to provide mortgage and title companies, real estate professionals, appraisers, government agencies, investors, and telecommunication and utility companies with comprehensive property, ownership and mortgage data on their iOS devices.

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The RealQuest App allows users to:

>> Search by property address, owner name or map.

>> Identify all properties associated with an owner.

>> Check foreclosure status.

>> Validate property value.

>> Confirm property ownership.

>> Research property transaction history.

>> Compare nearby sales.

“Purchase originations are being forecasted to reach more than $1 trillion this year, with one in three new mortgages expected to be made to Millennials. Given the growth of Millennial household formation and their technology preferences, it’s critical for mortgage professionals, real estate agents, appraisers and investors to have cutting-edge, on-the-go technology that gives them a competitive edge,” said Shaleen Khatod, senior vice president of Data Solutions at CoreLogic. “With the RealQuest App, they can access national property, owner and mortgage data and insights that will help them seize more opportunities whenever and wherever they are.”

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The RealQuest App is an extension of the New RealQuest desktop version, which, in addition to the features available in the app, includes Building Permit Reports to validate home improvements and Homeowners Association Reports to provide detailed HOA information.

The app is available for download in the Apple App Store. To use it, mortgage and real estate professionals must be subscribed to the New RealQuest.

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

CoreLogic: Home Prices Are Up Year Over Year

New data from the CoreLogic Home Price Index (HPI) and HPI Forecast for November 2016 shows home prices are up both year over year and month over month. Here’s the data:

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Home prices nationwide, including distressed sales, increased year over year by 7.1 percent in November 2016 compared with November 2015 and increased month over month by 1.1 percent in November 2016 compared with October 2016, according to the CoreLogic HPI.The CoreLogic HPI Forecast indicates that home prices will increase by 4.7 percent on a year-over-year basis from November 2016 to November 2017, and on a month-over-month basis home prices are expected to increase by 0.1 percent from November 2016 to December 2016. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

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“Last summer’s very low mortgage rates sparked demand, and with for-sale inventories low, the result has been a pickup in home-price growth,” said Dr. Frank Nothaft, chief economist for CoreLogic. “With mortgage rates higher today and expected to rise even further in 2017, our national Home Price Index is expected to slow to 4.7 percent year over year by November 2017.”

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“Home prices continue to march higher, with home prices in 27 states above their pre-crisis peak levels,” said Anand Nallathambi, president and CEO of CoreLogic. “Nationally, the CoreLogic Home Price Index remains 4 percent below its April 2006 peak, but should surpass that peak by the end of 2017.”

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

New Report Tracks Credit Risk

CoreLogic released a new quarterly report featuring the CoreLogic Housing Credit Index (HCI) that measures variations in home mortgage credit risk attributes over time—including borrower credit score, debt-to-income ratio (DTI) and loan-to-value ratio (LTV). A rising HCI indicates that new single-family loans have more credit risk than during the prior period, and a declining HCI means that new originations have less credit risk.

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The current HCI shows mortgage loans originated in Q3 2016 continued to exhibit low credit risk versus the previous quarter and Q3 2015. In terms of credit risk, Q3 2016 loans are among the highest-quality home loans originated since the year 2001.

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“Mortgage originations over the past 15 years have exhibited a huge swing in credit tolerance, as shown in our Housing Credit Index. The index incorporates six risk attributes, including the three C’s of underwriting—credit, collateral, and capacity. Using 2001 originations as a base year, the HCI shows the significant loosening of credit running up to 2006. This was followed by a dramatic tightening of credit in response to the real estate crash and a decline in high-credit-risk applicants beginning with the Great Recession,” said Dr. Frank Nothaft, chief economist of CoreLogic. “While low downpayment and high payment-to-income products are available today, borrowers generally need good credit scores to qualify. This may be a factor that has led to the drop-off in applications from those with lower credit scores during the last few years.”

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Nothaft also observed that one of the consequences of this prolonged trend is that many potential homebuyers appear to believe that they cannot get a mortgage. “When we compare applications to closed loans, what we find is that lenders are originating the bulk of the applications that they are receiving, but the applications that are coming in tend to be from relatively high quality, low-risk applicants.”

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