Magazine article Mortgage Banking

Study Confirms Mortgage Lending Drop in New Jersey

Magazine article Mortgage Banking

Study Confirms Mortgage Lending Drop in New Jersey

Article excerpt

ACCORDING TO A NEW STUDY BY RICHARD F. DeMong and Richard G. Netemeyer, professors at the University of Virginia, Charlottesville, Virginia, New Jersey's consumers are finding it harder to qualify for mortgages since the implementation of the state's Home Ownership Security Act of 2002.

The study examined mortgage lending in New Jersey during the first quarter of 2004 by six of the state's leading mortgage lenders, and compared it with mortgage lending in neighboring Pennsylvania. The six lenders account for more than one-third of the nation's nonprime mortgage market. The study analyzed data on almost 16,000 first-mortgage loans by these lenders in New Jersey and Pennsylvania.

"Our analysis shows that since the Home Ownership Security Act went into effect, it has become more difficult to borrow in New Jersey than in Pennsylvania," said DeMong. "One of the reasons for the difference appears to be the lower percentage of borrowers who are able to get nonprime mortgage loans in New Jersey, which appears to be directly related to the Home Ownership Security Act."

The analysis showed that 21 percent of the mortgage loans made in New Jersey were nonprime, compared with 28 percent in Pennsylvania. …

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