Has the Subprime Lending Fallout Been Contained?
Whether you are looking for a mortgage loan after bankruptcy, a first home mortgage or even a second mortgage, the subprime lending problems that have been evident since the first of the year are still affecting most people looking into home mortgages. However, murmurs have been heard that the subprime lending fallout may be contained. This video from the Bloomberg TV network shows how this subprime lending is being contained.
Part of the big difference is tightening lending standards. Instead of taking on higher risk borrowers, standards are tightening, and many that might have got a home mortgage loan before might not. And if they do get the home mortgage loan, chances are that they will need more documentation, and will pay higher interest rates. Eventually, insists Bloomberg, the mortgage industry will correct itself. But what will it do for borrowers?
Well, mortgage application volume remains steady, but mixed rates means that some may be paying higher rates due to their credit history, or due to how mortgage loan underwriters view the risk involved in the mortgage market right now. Mortgage News Daily reports:
The MBA survey showed mortgage application volume was up 0.9 percent on a seasonally adjusted basis and 25.9 percent on an unadjusted basis from the previous week which was shortened by the Independence Day holiday. Volume was up 15.7 percent from the same week in 2006.
Not only that, but refinance for second mortgage applications were up as well, presumably as homeowners attempt to switch their ARMs into fixed rate loans. Switching to an ARM might be a good idea, as no one is quite sure exactly where mortgage interest rates will go from here, although they are likely to go up soon as a measure of economic stability returns to the U.S.
Tags: subprime lending fallout, mortgage loan interest rates, home mortgage loan, subprime lending,
second mortgage, refinance ARM
