Mortgage Approval Requirements and Ethical Lending Standards

Cherise DeLucia
James Dallas Smith
Matthew Ringel

A. Thesis: We will review the impact of sub-prime lending on the current economic climate and lending markets and examine loan qualification requirements, ethical lending standards, consumer education, and the impact of these cornerstones on the economy as a whole.

B. Research Post Outline:

1) Pre-approval Lending Requirements and Standards of Quality Lending - Traditional mortgage requirements were stringent and not only required a quality credit score, but a 20% down payment, and a mortgage payment that less than 35% of gross income.
2) Sub-Prime Lending- Popularized during the housing boom, sub-prime mortgages were designed to offer lending vehicles for less attractive lending candidates. Requiring low down payments, variable rates that increased yearly, and stated income loans all had an eventual detrimental impact on the entire global economy.
3) Economic Crisis and Current Lending Environment- As the economy continues to recovery, and the lending markets have tightened, more emphasis has been placed on ethical lending standards and conservative mortgage qualifications guidelines.

C. References:
Collins, J. (2009, October 3). O.C. property investor seeks bankruptcy rescue: Mammoth Equities' defaults are just the latest development in mounting commercial real woes. The Orange County Register.

MSNBC.com. Fed says banks tightening mortgage standards: Both traditional and non-traditional loans are harder to qualify for. http://www.msnbc.msn.com/id/30563498/

Scherzer, L. SmartMoney.com. 7 Tips for Getting a Preapproved Mortgage: http://www.smartmoney.com/personal-finance/real-estate/7-tips-for-getting-a-preapproved-mortgage/

London, A. (2009, August 8). Fed offers mortgage search tips. News Journal,B.2. Retrieved October 1, 2009, from ProQuest Newsstand. (Document ID: 1825954401).

fha.mortgageloanplace.com/FHA-Loan-Qualification.html

www.searchlightcrusade.net/2009/04/loan_qualification_standards_l_3.html