NEW YORK (TheStreet) -- Hey, don't give up so easy!
In a nutshell, the mortgage industry wants potential homebuyers to know that getting a loan isn't as difficult as many people think. Yes, federal regulations are tougher than they used to be, and lenders are more cautious. But lenders don't make money if they don't approve loans.
Because higher interest rates have undermined demand for refinancing existing mortgages, lenders need to boost loans to homebuyers. But a survey shows that many potential borrowers are so discouraged by tales of tight lending standards that they give up before they've started.
The survey by loanDepot, an online mortgage lender, found that 46% of potential homebuyers did not bother to investigate the possibility of getting a loan. At the same time, it found that high demand for homes, with 29% of Americans saying they'd like to buy within the next two years.
Among those who didn't already own a home, 56% said they were not in the market because they feared they could not qualify for a mortgage. Among those who did own a home but wanted to buy another, 30% weren't looking for fear of loan rejection. Of those who want to buy but fear rejection, 74% said they had taken no steps to see if they'd qualify.
"We're well into this year's homebuying season and too many potential buyers and sellers are sitting on the sidelines because they're afraid they can't qualify for a home loan before they've looked into it," says loanDepot President and COO Dave Norris. "While market and regulatory conditions have made it harder for many borrowers to secure a loan, consumer lending is beginning to loosen up for mortgage borrowers, including those with less than perfect credit. Potential buyers are forfeiting their dreams of homeownership before they find out what financing options are available to them."