Mortgage credit forecast: partly cloudy, with a chance for gain

In the 1980s, the mortgage credit industry will be facing massive changes. The first challenge lies in finding funds to lend. Expensive money will force lenders to make different, more sophisticated loans to borrowers who know cheap money will not be available. Lenders must find new money to satisfy...

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Bibliographic Details
Published in:ABA banking journal 1981-10, Vol.73 (10), p.162
Main Author: Thygerson, Kenneth J
Format: Magazinearticle
Language:English
Subjects:
Adjustable rate mortgages
Credit
Deficit financing
Funding
Home loans
Housing
Industry
Mortgages
Online Access:Get full text
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Summary:In the 1980s, the mortgage credit industry will be facing massive changes. The first challenge lies in finding funds to lend. Expensive money will force lenders to make different, more sophisticated loans to borrowers who know cheap money will not be available. Lenders must find new money to satisfy demands for loans. They will have to adapt to avoid losing money. Home owners will adjust to high mortgage costs by allocating more of their income to housing, and by accepting smaller homes. The old underwriting guidelines do not apply anymore. Families will be borrowing less than they once did. Lenders are also facing problems in the use of capital by government. Lenders must decide how to allocate capital to fill housing needs and still modernize what many consider an outdated industrial base. If the government does not get out of the credit markets, there is little hope for housing in the '80s. Lenders must start preparing now to market new ideas for home mortgages.
ISSN:0194-5947
2161-5101