What to expect at HousingWire’s Spring Summit

The focus of the Summit is The Year-Round Purchase Market. Record low rates led to a banner year for mortgage lenders in 2020, and this year is expected to be just as incredible.

Increasing lending and servicing capacity – regardless of rates

Business process outsourcing and digital transformation are proven solutions that more companies in the mortgage industry are turning to. Download this white paper for more.

HousingWire's 2021 Spring Summit

We’ve gathered four of the top housing economists to speak at our virtual summit, a new event designed for HW+ members that’s focused on The Year-Round Purchase Market.

An Honest Conversation on minority homeownership

In this episode, Lloyd interviews a senior research associate in the Housing Finance Policy Center at the Urban Institute about the history and data behind minority homeownership.

Mortgage

Fannie Mae raises debt-to-income ratio to further expand mortgage lending

Study finds borrowers with 50% DTI not prone to default

Fannie Mae announced it is preparing to raise the debt-to-income ratio, the No. 1 reason that mortgage applicants get rejected, according to an article by Kenneth Harney for The Washington Post.

The largest population rejected due to high DTI ratios is Millennials, who often stretch to pay their rent early in their careers, according to the article. Fannie Mae is now looking to allow more homeowners to enter the market as it increases its DTI requirements.

From the article:

But here’s some good news: The country’s largest source of mortgage money, Fannie Mae, soon plans to ease its debt-to-income (DTI) requirements, potentially opening the door to home-purchase mortgages for large numbers of new buyers. Fannie will be raising its DTI ceiling from the current 45 percent to 50 percent as of July 29.

DTI is a borrower’s total amount of debt, including credit cards, student loans, auto loans and mortgages, versus their total income. However, Fannie Mae might be increasing its DTI ratio, but qualified mortgages still need a DTI of 43%.

But how safe will these new loans be? Many have reservations about lending at higher DTIs. But according to Fannie Mae, there is nothing to worry about when increasing the DTI from 45% to 50%.

From the article:

Using data spanning nearly a decade and a half, Fannie’s researchers analyzed borrowers with DTIs in the 45 percent to 50 percent range and found that a significant number of them actually have good credit and are not prone to default.

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