Mortgage Lenders, Loosen Standards

[Randolph Kinney]

Mortgage lenders are continuing to loosen their standards, despite growing fears that relaxed lending practices could increase risks for borrowers and lenders in overheated housing markets.

Novel loan products have helped fuel much of the run-up, which continues to defy expectations, as reflected in home-sales data released yesterday. Existing-home sales hit another record in June, up 2.7% from May's heated levels, according to the National Association of Realtors. Median home prices rose 14.7% from June 2004.

Mortgage Lenders Loosen Standards

 

[Otis Key]

In one recent move, Chase Home Finance, a unit of J.P. Morgan Chase & Co., this spring began allowing some of its customers to take out home-equity loans and lines of credit without having their incomes verified. Under the new program, income verification isn't required for home-equity loans of up to $200,000, provided that the borrower's total mortgage debt doesn't exceed 90% of the property's value or $1.5 million. The change "is not for all customers -- it's only for customers with the very highest credit rating," a company spokeswoman says. Loans with little or no documentation have grown in popularity industry-wide.

Can anyone say Credit Union, at least until they start this game as well?

 

[Big ole Boy]

I see - its class warfare - at least it "facists economic banking" - if your wealthy

you get to drive up the price on everyone elses home by placing the financial

institutions in a situation where the wealthy elite are allowed to bid up property

prices to finance their lifestyles ......?

tongue and cheek B)