Forensic Loan Audit: Large Number Of Borrowers Cannot Afford Their Home Loan
There may be more bad news for those hoping to buy a new home and the amount of foreclosures that are still to come. Applicants whose credit scores are less than 640 may have a tough time getting a 30-year fixed-mortgage. Even if one has a good down payment this may not help them as well.
Credit scoring companies are now saying that roughly 29.6 percent of consumers have a credit score below 620. In other words, nearly one-third of loan applicants may be facing grim news as regards the status of their home mortgage loan.
Any homeowner whose credit score was 720 or higher were able to secure some of the lowest rates in the industry for a 30-year home loan hovering in the 4.1 range.
Mid-range credit scores, between 620 and 719, received annual percentage rates from 4.44 to 4.73 percent. Those with credit scores below 620 received too few loan quotes to calculate the average annual percentage rate.
Many professionals in the housing industry say these numbers are directly attributed to the tighter credit standards since the mortgage crisis began.
The mortgage bubble blame still seems to be put on the lower lending requirements which allowed high numbers of sub-prime loans to be approved.
Thus, today's tighter credit is a predictable response by banks after the foreclosure crisis. But this current mentality also keeps a cap on housing demand, which may prove to be important for the greater housing market recovery.
Which brings us to the second portion of this discussion, that being the foreclosure data. There is startling news on the horizon that there are 7,018,000 mortgages in the United States that are 30 or more days delinquent or in the process of foreclosure.
The database of nearly 40 million mortgage loans clearly shows that the home loan modification programs process has not worked at all.
But the to say there are 7 million loans going unpaid is just the tip of the iceberg. There are already 2,000,000 plus mortgages that are in foreclosure litigation with homeowners hoping to get relief with the unsuccessful loan modification programs. Others are seeking assistance with principal reduction programs.
The rest of the 4,934,000 are currently in what we call the pre-foreclosure stages with close to 50 percent of these being 90 or more days late on their payment.
Hence, the nation's pre-sale foreclosure inventory rate now stands at 3.84 percent which is up 1.1 percent from the August 2010 reading and 3.6 percent above a year earlier.
These foreclosure statistics along with the fact that nearly one-third of Americans cannot buy a new home tells us that this housing crisis is no where near being finished and that it could take years for a full recovery.
Credit scoring companies are now saying that roughly 29.6 percent of consumers have a credit score below 620. In other words, nearly one-third of loan applicants may be facing grim news as regards the status of their home mortgage loan.
Any homeowner whose credit score was 720 or higher were able to secure some of the lowest rates in the industry for a 30-year home loan hovering in the 4.1 range.
Mid-range credit scores, between 620 and 719, received annual percentage rates from 4.44 to 4.73 percent. Those with credit scores below 620 received too few loan quotes to calculate the average annual percentage rate.
Many professionals in the housing industry say these numbers are directly attributed to the tighter credit standards since the mortgage crisis began.
The mortgage bubble blame still seems to be put on the lower lending requirements which allowed high numbers of sub-prime loans to be approved.
Thus, today's tighter credit is a predictable response by banks after the foreclosure crisis. But this current mentality also keeps a cap on housing demand, which may prove to be important for the greater housing market recovery.
Which brings us to the second portion of this discussion, that being the foreclosure data. There is startling news on the horizon that there are 7,018,000 mortgages in the United States that are 30 or more days delinquent or in the process of foreclosure.
The database of nearly 40 million mortgage loans clearly shows that the home loan modification programs process has not worked at all.
But the to say there are 7 million loans going unpaid is just the tip of the iceberg. There are already 2,000,000 plus mortgages that are in foreclosure litigation with homeowners hoping to get relief with the unsuccessful loan modification programs. Others are seeking assistance with principal reduction programs.
The rest of the 4,934,000 are currently in what we call the pre-foreclosure stages with close to 50 percent of these being 90 or more days late on their payment.
Hence, the nation's pre-sale foreclosure inventory rate now stands at 3.84 percent which is up 1.1 percent from the August 2010 reading and 3.6 percent above a year earlier.
These foreclosure statistics along with the fact that nearly one-third of Americans cannot buy a new home tells us that this housing crisis is no where near being finished and that it could take years for a full recovery.
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