Top markets for affordable renovated housing inventory

Despite the rapidly deteriorating affordability, there is some hope for homebuyers in the form of renovated homes: properties that have been rehabbed into move-in ready condition after being purchased at auction.

HousingWire Magazine: December 2021/ January 2022

AS WE ENTER A NEW YEAR, let’s look at some of the events that we can look forward to in 2022. But what about what’s next for the housing industry?

Mortgage Tech Virtual Demo Day

Tune in to our live Virtual Demo Day on December 1st at 10am CT to experience demos from the most innovative tech companies in the Servicing, Audit and Post-Close space.

Logan Mohtashami on Omicron and pending home sales

In this episode of HousingWire Daily, Logan Mohtashami discusses how the new COVID variant, Omicron, will impact inflation and whether or not it will send mortgage rates lower.


Equifax: Subprime mortgage origination on the rise

This time with better underwriting

While first-mortgage originations for subprime borrowers are growing, it’s not the same faulty mortgages that plagued the financial crisis, as lenders heighten their focus on consumers’ ability to repay.

"While there are many characteristics that define a subprime loan, such as the specific terms of the loan and the lender who issues it, credit standards are becoming more accommodating to meet market demand," said Amy Crews Cutts, chief economist at Equifax.

"At the same time, lenders are focusing more attention on evaluating consumers' ability to repay. This has led to a much larger reliance on third-party data verifications that enable lenders to more accurately vet subprime borrowers much earlier in the origination process,” said Cutts.

According to data from the latest Equifax National Consumer Credit Trends Report, first-mortgage originations for subprime borrowers, consumers with an Equifax Risk Score of 620 or below, have shown steady growth from January to October 2015, with more than 312,000 new mortgages originated, totaling $50.7 billion.

This marks a 28% increase in the number of first mortgage originations and a 45% increase in the total balances from the same time a year ago.

Meanwhile, the report said the industry is also witnessing an increase in subprime activity within the home equity market.

The total balance of home equity installment loans originated for subprime borrowers increased to more than $1.4 billion, a year-over-year increase of 32.7%, the report stated. Total credit limits on home equity lines of credit (HELOCs) also reached $608 billion, a year-over-year rise of 6.8%.

Cutts explained that home equity installment loans are often more suitable for consumers with credit issues, but the regulatory costs and underwriting burdens have typically made them very expensive for lenders to originate.

Conversely, she said, “HELOCs are generally more popular among consumers, but less accessible to subprime borrowers.” 

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