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U.S. mortgage market provides warning signs for U.K. lenders

Nov 18, 2007

NAMB releases new trend data on 2007 mortgage marketsMortgagePress.comMortgage trends 2007 The National Association Mortgage Brokers released new trend data that shows Mortgage Brokers continue to close fewer non-traditional (sub-prime) loans than in 2006. The data is part of an ongoing survey of Mortgage Brokers nationwide that is conducted by NAMB's research partner Wholesale Access Mortgage Research and Consulting Inc. The latest update confirms that the trend toward more traditional loans continues to be the norm in 2007 as the market corrects from a decade-long housing expansion. "This data shows that brokers are anticipating and meeting the changing needs of their customers," said NAMB President George Hanzimanolis, CRMS. "The shift in the market toward more traditional loan products is yet another reason we have cautioned Congress not to overreact to existing concerns and allow the market to adjust." Prime loans continue to make up the majority of all loans originated by Mortgage Brokers, according to the study. Though their share of the marketplace dipped slightly in April to roughly 56 percent—down from 61 percent in March—prime loans were still by far the most widely used class of mortgages. In April, only 11 percent of all loans offered were sub-prime. In 2006, 13 percent of all loans offered were sub-prime loans, designed for homebuyers with credit scores below 620. "This ongoing study further puts sub-prime mortgage issues in perspective," said Hanzimanolis. "For all the attention that these loans have received in the media, we're talking about a small—and shrinking—portion of the home-buying market." Researchers expect the monthly data to fluctuate throughout the year, as brokers adjust their loan offerings and the federal government continues to addresses concerns about the market. "There will be some volatility, but as the year progresses, the trend will be toward lower risk loans," said David Olson of Wholesale Access. "New legislation will make it more difficult to offer higher risk loans." The survey responses came from more than 200 brokers and were analyzed to compare types of loan products offered, adjustable versus fixed-rate offerings and combined loan-to-value ratios. For more information, visit
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