NH's Mortgage Brokers Are Dealing with Tighter Credit Standards

Manchester mortgage broker Ralph Coppola says he’s heard plenty about the federal bailout for Fannie Mae and Freddie Mac.

But he says so far he is watching it from afar.

It’s essentially had no effect on us.

Which isn’t to say Coppola isn’t worried about the direction his business is going.

The reality is there’s less people buying, qualifications have tightened up. Industry predictions are …the total number of loans that will be written this year will be off um you know I’ve seen numbers from 30 to 40 percent less than last year. I don’t expect that we’ll be off 30 or 40 percent but it will be tighter.

Other mortgage brokers in the state agree.

They’ve seen their business volume shrink by as much as 50 percent in the last couple of years.

Jim Hon runs Acquire Mortgage and Finance, LLC in Pembroke.

He says that’s partly because Fannie Mae, Freddie Mac and big banks have already raised the bar for what it takes for a home buyer to get a mortgage.

He says the new standards should be quite familiar.

A person with good to excellent credit, a person with some money in the bank, a person who’s got verifiable income and a person who’s got solid employment.

Customers with jobs and down payments of 20 percent can typically get a loan with a traditional bank or a mortgage broker.

Plenty of prospective house buyers don’t fit that profile.

But as recently as last year less they could still qualify for a mortgage.

Mortgage broker Ralph Coppola also heads the Mortgage Bankers and Brokers of New Hampshire.

I guess the easiest way to explain it is you can see someone paying 12, 1300 dollars a month could probably get into a property for about the same money will no longer be able to get a mortgage.

Many home buyers who don’t have a lot of money have long turned to New Hampshire Housing Finance.

It is a state agency that helps low income families buy their first home.

Liz Lamoureux heads the single family mortgage program.

She says low income clients who can afford only small down payments need insurance to qualify for a mortgage.

But Lamoureux says the market for mortgage insurance has almost totally dried up.

It was really the beginning of this year and then particularly the first of may that the private mortgage insurers all instituted declining market policies and other policies that made it difficult to get a mortgage.

Mortgage insurers now want a lot more than they used to, which was as little as 3 percent down.

Lamoureux says even though credit is harder to come by, her agency still has options for mortgage insurance from the Federal Housing Administration, or F-H-A.

…they’re still doing the 97 percent insurance and they don’t have areas they consider a declining market. So it’s been much easier for borrowers who qualify to go that way.

State housing officials and mortgage brokers are hoping the problems in the mortgage industry work their way out in the near future.

But those troubles could last a while.

Housing values haven’t been going up, and the plentiful money of a few years ago is long gone.