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Lenders still wary of high-risk borrowers

Loan officers continue to be cautious of high-risk U.S. home mortgage applicants.
3/31/2016 12:17:28 PM

Loan officers continue to be cautious of high-risk U.S. home mortgage applicants. According to the Lenders One Mortgage Barometer survey, the non-qualified home loan market works with a number of lenders who tend to avoid non-qualifying loans

The survey reports responses from 200 randomly selected mortgage lenders. It was conducted online between Jan. 4-14, 2016. 

Survey shows lenders' appetite. Participants in the survey indicated fewer of them originate non-qualifying mortgage loans. In fact, only 64% of lenders report doing so, and only 18% reported they frequently do this. 

In addition, only 51% of loan officers who originate these loans indicate they are "extremely" or "very likely" to originate these mortgages in 2016. 

Customer service is important to loan officers. The survey also showed that lenders recognize quality customer service is critical for business growth. Of the respondents, 77% said better customer service will make them stand out from the competition. This includes improving the efficiency, as 71% reported decreasing the time between origination and closing should be a focus in 2016. 

Mortgage Professional America indicated consumers crave real relationships with their lenders, not wanting to feel as if they are just another piece of business. 

"Mortgage lenders are looking at 2016 as a year in which they will move toward a more growth focused business strategy," said Daniel T. Goldman, Interim Chief Executive Officer at Lenders One, according to the press release. "However, some external factors such as rising interest rates and a complex regulatory environment will continue to temper the pace at which mortgage lenders seek to expand."

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