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Article: OTS chief warns lenders against loosening credit standards.(Office of Thrift Supervision)
- Article from:
- Mortgage Banking
- Article date:
- May 1, 2006
CopyrightCOPYRIGHT 2006 Mortgage Bankers Association of America. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Residential mortgage lenders should be paying stricter attention to credit quality rather than easing underwriting standards as the housing market cools and loan origination volumes stabilize, according to the head of the federal Office of Thrift Supervision (OTS).
In a speech before the New York Bankers Association (NYBA), OTS Director John Reich expressed concerns about weakening credit quality at some financial institutions. Specifically, he identified inadequate loan documentation, misaligned loan pricing relative to credit risks, declining underwriting standards, liberalization of loan terms and an increasing reliance on wholesale funding as areas of concern ...