The Housing Market Thaws: Will Credit Follow Suit?

The Motley Fool is in Seattle, visiting online home and real estate marketplace Zillow. Today we meet with Zillow Mortgage Marketplace Director Erin Lantz to learn more about how ZMM works and whom it serves.

Has the housing market learned its lesson? In the following video, Lantz describes the lending behavior seen on Zillow Mortgage Marketplace, and how interest rates influence lenders' willingness to offer quotes to less desirable borrowers.

To view the full interview, click here.

The Motley Fool's chief investment officer has selected his No. 1 stock for this year. Find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

Austin Smith: Are you seeing any sort of loosening of credit standards as the market thaws a little bit, or are things still pretty tight?

Erin Lantz: We're starting to see a little bit of that, mostly around the lower -- we're seeing a little bit more lender activity around lower-down-payment borrowers or slightly lower FICO bands than we were a few years ago, but we're nowhere near where we were at the boom-year levels.

Looking at some of the ZMM data, since the last three years ago, we've seen borrowers with lower down payments are getting about three times more lenders willing to quote on their request.

Smith: Interesting.

Lantz: So, a little bit of movement there, but again mostly we're not nearly as close to where we were back in the boom years, by any means.

The other factor there is that lenders are really busy in this low-interest-rate environment, so we're not seeing them have much incentive to try to widen their guidelines, because they've got more business than they can handle in the current guideline box.

Smith: What sort of makeup of mortgage leads are you seeing people take? ARMs were sort of the dynamite of the financial crisis. Are you seeing ARMs popular again? Is it 30-year fixed, 15-year fixed? What's the makeup of how mortgages are getting delivered today?

Lantz: The vast majority are 30-year fixed. We are starting to see a little bit more shorter-term fixed-rate mortgages, so a 15-year fixed, especially because rates are so low that we're seeing some borrowers are able to move from a 30 to a 15 and have an insignificant increase on their monthly payment even though they're reducing their term considerably. We're seeing a bit more of the shorter-term, but most everything is fixed, and almost all of it's 30-year fixed.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2599276, ~/Articles/ArticleHandler.aspx, 9/30/2016 8:16:59 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 11 hours ago Sponsored by:
DOW 18,143.45 -195.79 -1.07%
S&P 500 2,151.13 -20.24 -0.93%
NASD 5,269.15 -49.39 -0.93%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/29/2016 4:00 PM
ZG $35.80 Down -0.10 -0.28%
Zillow Group (A sh… CAPS Rating: ***