Mortgage insurers and lenders in some markets, including New Orleans, are beginning to relax their standards. “People are becoming more secure and confident in the way that they are underwriting their loans,” says Richard Allen, with Standard Mortgage Corp. “They’re making better decisions on their loans now.” Over the past six to eight months, Allen says private mortgage insurance companies have lowered the minimum credit scores locally from 720 to 680, and given waivers to preferred lenders, allowing them to enter certain distressed markets. Despite the expanded guidelines, Allen says mortgage insurance companies have taken a bigger role in approving loans. “Over the last 10 years, the private mortgage insurance companies let the lenders approve loans first before going in,” he says. “That’s reversed now. They want to see the files.”
Kenny Hodges of Assurance Financial Group says he hasn’t seen that many changes, since Baton Rouge was never really considered to be a distressed market, where home values were plunging. Post-Katrina New Orleans was considered to be distressed. “The only thing that has really changed for us in this market is that you have to verify income and assets,” Hodges says. “It’s very easy to get a loan.” Hodges says the record low interest rates, along with federal tax credits for first-time homebuyers and the fact that it’s a buyer’s market makes it the right time to get a home, regardless of underwriting standards. “Houses are readily available,” he says.—Timothy Boone
