More white couples seeking mortgages [The State (Columbia, S.C.)]

Sept. 02--After a mortgage meltdown that plunged the nation into the worst recession in a lifetime, new tracking measures are in place to help regulators spot trouble before it escalates.

New mortgage lending standards are offering for the first time a detailed snapshot of who is applying for mortgages in the state. The S.C. Department of Consumer Affairs released its first Mortgage Log Analysis report last week, based on data submitted by brokers and lenders for 31,000 application or credit reports pulled for home loans in 2011.

The typical borrower for home loans in South Carolina is a white couple seeking a conventional mortgage of around $201,000 to either buy or refinance a house, the data shows.

"It is just a really interesting look into the mortgage industry in our state," said Carri Grube Lybarker, administrator of the consumer affairs department.

The report will be issued each year, helping the department track lending in the state, she said. Ultimately, it could help them more easily identify discriminatory and predatory lending, she said.

Department officials can go deeper into the data and look for red flags from specific lenders, she said.

Mortgage lenders are required to submit the data annually to the state based on the S.C. Mortgage Lending Act, which took effect in 2010. The act requires lenders to keep a log of all loan applications -- whether approved or declined -- and specific data about those applying, including credit score, race and gender, loan amount, property type and occupancy status. National lenders, such as Bank of America and Wells Fargo -- the state's largest banks based on deposits -- are exempt from the reporting rule.

Last year, 77 percent of borrowers were white, 21 percent were African American and 2 percent were of another race. Roughly half of those applying for loans wanted to buy a house, and slightly less than half wanted to refinance.

In what Lybarker called a sign of the times, the average credit score for potential borrowers was 665 out of a possible 850. Lenders typically won't approve mortgages to those with credit scores below 620, so the state's average is on the lower end of the spectrum.

That needs to change, said Eddie Wilder, president of Columbia's ERA Wilder Realty. Lending standards are too stringent and need to be loosened some to stimulate home sales, he said, especially for folks whose scores were dinged by a job loss during the recession but who are still good credit risks.

"We are not having a lack of people with interest to buy," he said. "It's still ... can they qualify?"

A major motivator for potential buyers is historically low interest rates, Wilder said.

The average mortgage rate for buyers in South Carolina in 2011 was 4.79 percent. Rates typically are at least a couple of percentage points higher, but they have been kept low in recent years as an effort to stimulate the economy.

"Because of the interest rates going so low, it made people consider their options," she said.

The low credit scores of potential borrowers who have been hammered by a lingering economic downturn also could help explain why 2011 was what real estate officials call the worst year on record for home sales in South Carolina.

Less than 48,000 homes sold last year in the state -- a far cry from the nearly 70,000 that sold in 2007 before the financial crisis hit nationwide.

Sales have begun to slowly rebound this year as the housing market improves. More than 30,000 homes sold in the first seven months of the year, a nearly 9 percent increase over the same period in 2011.

As mortgage rates continue to average less than 4 percent, those numbers are expected by many in the industry to continue growing.

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