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pdfTechnical
Report Series
A Profile of 2013 Mortgage Borrowers: Statistics
from the National Survey of Mortgage Originations
Technical Report 16-01
May 27, 2016
This document was prepared by Robert B. Avery, Brian Bucks, Christine Chai,
Tim Critchfield, Ian H. Keith, Ismail E. Mohamed, Forrest W. Pafenberg, Saty Patrabansh,
Jay D. Schultz, and Claudia E. Wood.
Table of Contents
1.0
Introduction .................................................................................................................... 1
2.0
Comparing the 2013 NSMO with 2013 Home Mortgage Disclosure Act Data ........... 2
3.0
Profile of 2013 Mortgage Borrowers .............................................................................. 3
4.0
The Search for a Mortgage ........................................................................................... 14
5.0
Selecting a Mortgage ................................................................................................... 18
6.0
During the Application Process .................................................................................... 26
7.0
Closing on a Mortgage ................................................................................................. 28
8.0
Satisfaction with Mortgage Terms, Mortgage Process and Information ...................... 32
9.0
Opinions on Financial Responsibility ........................................................................... 35
10.0
Recent Changes in Neighborhood Housing .................................................................. 38
11.0
Expectations on Neighborhood House Prices and Neighborhood Desirability ............ 41
12.0
Financial Expectations .................................................................................................. 44
13.0
Summary and Further Work ......................................................................................... 47
Appendix ....................................................................................................................... 48
1.0
Introduction
This Report provides information about the first set of responses to the National Survey of
Mortgage Originations (NSMO or survey), which is jointly administered by the Federal Housing
Finance Agency (FHFA) and the Consumer Financial Protection Bureau (CFPB). The survey
collects information from a representative sample of recent mortgage borrowers about their
experiences in choosing and in taking out a mortgage. It is designed to provide researchers,
policy makers, and others with comprehensive data about the consumer experience when getting
a mortgage.
The survey data contained in this Report pertains to borrowers who obtained a mortgage in 2013.
As a result, these survey data provide a baseline of information prior to the effective dates of
recent mortgage reforms, including revised mortgage disclosures, resulting from the Dodd-Frank
Wall Street Reform and Consumer Protection Act.
The NSMO is a recurring quarterly mail survey of about 6,000 new mortgage borrowers each
quarter using a sampling frame drawn from the National Mortgage Database (NMDB). 1 The
NMDB in turn is a representative 1-in-20 sample of closed-end first-lien mortgages reported to
Experian, one of the three national credit repositories. At present the quarterly sample of 6,000
mortgages represent a sampling rate of about 1-in-260 from the population of new mortgage
originations.
The NSMO questionnaire focuses on topics such as mortgage shopping behavior, mortgage
closing experiences, and other information that cannot be obtained from any other source, such
as expectations regarding house price appreciation, critical household financial events, and life
events such as unemployment, large medical expenses, or divorce. In general, borrowers are not
asked to provide information about mortgage terms in the questionnaire since these fields are
available in the Experian data. However, the survey collects a limited amount of information on
the mortgage to verify that the credit repository records and survey responses pertain to the same
mortgage.
The NSMO survey design calls for a sample drawn from mortgages newly reported to Experian
during the previous quarter. In the first year of the survey there was a catch up period to cover
all mortgages originated in 2013 and reported to Experian by September 2014. This report
1
The National Mortgage Database project is a multi-year project being jointly undertaken by the Federal Housing
Finance Agency (FHFA) and the Consumer Financial Protection Bureau (CFPB). The project is designed to provide
a source of information about the U.S. mortgage market based on a five percent sample of residential mortgages.
The NMDB will enable FHFA to meet the statutory requirements of section 1324(c) of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of
2008, to conduct a monthly mortgage market survey. For CFPB, the NMDB project will support policymaking and
research efforts and help identify and understand emerging mortgage and housing market trends. For further
information on the NMDB, see National Mortgage Database Technical Report 15-01 (August 27, 2015),
http://www.fhfa.gov/PolicyProgramsResearch/Programs/Documents/NMDB_Technical_Report_15-01_082715.pdf.
For additional background, see also the Appendix.
1
presents results from the 6,062 responses to the first year of the survey and, thus, provides an
overview of the mortgage market and borrowers’ experiences in 2013. 2 These unweighted
responses were about one-third of the sample drawn from mortgages originated in 2013. It is
intended to be the first in a series of annual reports on new mortgage borrowers based on the
NSMO.
This report is organized as follows. Section two compares the 2013 NSMO with 2013 Home
Mortgage Disclosure Act (HMDA) data. Section three presents the overall profile of survey
respondents in 2013, including their demographic characteristics and what kind of mortgages
they obtained. Sections four through seven describe how the 2013 borrowers shopped for their
mortgages and the application and closing processes. Section eight presents borrowers’
mortgage outcomes and measures of their satisfaction in the mortgage application and closing
process. Section nine considers borrowers’ opinions on financial responsibility and section ten
examines borrowers’ opinions on the neighborhood where they obtained their mortgage.
Sections eleven and twelve discuss 2013 mortgage borrower’s expectations for house prices,
neighborhood desirability, and their own financial circumstances over the next couple of years.
Finally, section thirteen offers next steps. The Appendix provides details on the overall NMDB
project and the sample frame and data preparation procedures for the NSMO.
2.0
Comparing the 2013 NSMO with 2013 Home Mortgage Disclosure Act Data
To provide context about the representative scope of the NSMO, this section compares the
NSMO sample of mortgages originated in 2013 with 2013 Home Mortgage Disclosure Act data.
While the HMDA data do have some well-known coverage issues due to lender reporting
requirements, the annual HMDA data are believed to be close to a universe of all first-lien
mortgages originated in the United States. To make the comparison with the loan level data
available in HMDA, the NSMO sample is weighted to represent the overall mortgage market in
2013. For example, the NSMO sample of mortgages originated in 2013 represents 7.5 million
originations of first liens on owner-occupied homes in 2013 with a total loan volume of $1.58
trillion. The 2013 collection for the Home Mortgage Disclosure Act included 7.1 million
originations of first liens on owner-occupied housing covering $1.56 trillion. Thus, the count of
mortgages covered by the NSMO was five percent greater than in HMDA and the amount was
2
There are several ways calculations based on the NSMO raw survey responses may not be representative of the
population as a whole and, as a result, survey responses are appropriately weighted. Commonly, in survey sampling,
some individuals chosen for the sample are unwilling or unable to participate in the survey. Nonresponse bias (either
complete nonresponse to the survey or nonresponse to selected items within the survey) is the bias that results when
respondents differ in meaningful ways from non- respondents. To address this nonresponse bias, the NSMO uses
weighting to adjust for differential response to the survey. In addition, to address missing information on individual
questions within the survey, the NSMO uses statistical methods to impute missing data; the technique makes
multiple estimates of missing data to allow for an estimate of the uncertainty attributable to this type of nonresponse.
See National Survey of Mortgage Borrowers Technical Report 15-02 (August 27, 2015),
http://www.fhfa.gov/PolicyProgramsResearch/Programs/Documents/NSMO_Technical_Report_15-02-082715.pdf
for more details.
2
only two percent greater. Accordingly, the average loans size in the NSMO is smaller than in
HMDA—$212,165 compared with $219,229.
Both NSMO and HMDA break down total originations of first liens on owner-occupied loans
into home purchase and refinance transactions. The NSMO showed 2.9 million loans to
purchase a home in 2013 with a loan volume of $620 billion compared with 2.7 million loans and
a loan volume of $625 billion in the 2013 HMDA data. The NSMO showed 4.6 million
transactions to refinance a loan for $962 billion, while HMDA showed 4.4 million for $931
billion.
Table 1. Comparison of Mortgage Originations, 2013
(Count and Dollar Volum e)
Mortgage Originations
National Survey of Mortgage Originations
Hom e Mortgage Disclosure Act (HMDA)
Volum e (Billions
Volum e (Billions
Count (Thousands)
Dollar)
Dollar)
Owner-occupied
7,457
1,582
7,096
1,556
Purchase
2,858
620
2,703
625
Refinance
4,598
962
4,393
931
Not owner-occupied
675
124
1,123
316
Source: National Survey of Mortgage Originations, 2013, and Home Mortgage Disclosure Act, 2013
Notes: 1. The ow ner-occupied count total from the NSMO does not equal the sum of purchase and refinance counts from the NSMO due to rounding.
Count (Thousands) 1
The greater count and dollar volumes of loans in the NSMO compared with 2013 HMDA likely
stems in large part from differences in the set of lenders that the two data sets cover.
Specifically, some lenders do not report loans for HMDA because they do not meet the assetsize, location, federally related, or loan activity requirements for reporting. In contrast, loans
from these lenders would be sampled in the NSMO.
The NSMO and 2013 HMDA data particularly diverge in their coverage of mortgages on
properties that are not owner-occupied. HMDA includes about 1.1 million such mortgages, more
than 60 percent greater than captured in the NSMO. The NSMO reported $124 billion in
mortgage originations in 2013 that were not owner-occupied properties, while HMDA showed
$316 billion. HMDA covers many larger mortgages that were both not owner-occupied and
included business partnerships, and these mortgages would not be covered by NSMO.
Reconciling the sources of these differences requires further investigation.
3.0
Profile of 2013 Mortgage Borrowers
Tables 2 through 5 present percentage distributions of loan and property characteristics for
several demographic groups, loan types, and properties from the NSMO. Table 2 presents loan
size and mortgage term to maturity. Table 3 presents credit score, Table 4 presents loan type,
and Table 5 presents property type. The bottom row of each table shows the percentage
distribution of each loan or property characteristic. Finally, Table 6 presents the percent of
household life events experienced by survey respondents over the last couple of years.
3
Table 2. Loan Size and Mortgage Term to Maturity, by Demographic, Loan, and Property Characteristics
(Percentage Distribution)
Characteristics
$50,000
or Less
Respondent Age
35 Years or Younger
36 to 45
46 to 55
56 to 65
Older than 65
Race/Ethnicity
Non-Hispanic White
Hispanic and Non-White
Hispanic White
Asian
Black
Mixed and Other
Respondent Education
High School or Less
Some School
High School
Some College
Technical School
Partial College
College Degree
Postgraduate
Household Income
Less than $50,000
Less than $35,000
$35,000 to $49,999
$50,000 to $99,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 to $174,999
$175,000 or More
Household Type
Couple
Married
With Partner
Single
Male
Female
Military
Active Duty or Veteran
Active Duty
Veteran
No Military Service
Basic Training
Never Served
Loan Size1
$50,000 to $150,001 to
$150,000
$300,000
More than
$300,000
Less than
15 Years
Mortgage Term to Maturity1
15
15 to 30
30 Years
Years
Years
or More
Share of
All Loans
Share of
Share of
Purchases Refinances
1.4
1.7
3.5
4.1
8.0
41.6
31.5
37.9
45.3
48.4
44.1
41.1
39.0
34.0
31.2
12.9
25.6
19.5
16.5
12.5
1.6
3.1
6.4
8.9
8.5
7.8
17.8
25.5
23.1
18.7
4.8
7.3
9.0
7.1
5.8
85.8
71.9
59.2
60.9
67.0
21.9
23.3
24.2
19.8
10.7
40.0
22.4
16.7
13.3
7.6
10.5
23.9
28.9
24.0
12.7
3.4
2.7
4.4
0.9
4.6
1.9
42.0
34.1
45.7
17.1
47.7
31.0
38.4
39.8
36.4
38.0
38.1
43.1
16.2
23.4
13.5
44.0
9.5
23.9
6.0
3.4
4.4
3.2
2.6
3.5
18.8
18.1
16.1
28.0
12.5
16.6
7.2
6.1
7.3
4.8
8.6
5.1
68.0
72.3
72.2
64.0
76.3
74.8
72.8
27.2
5.5
5.7
5.0
11.1
70.9
29.1
6.4
5.6
5.1
12.0
73.9
26.1
4.9
5.8
4.9
10.6
8.8
12.7
8.1
3.8
4.9
3.6
2.3
1.5
59.7
54.2
60.6
50.9
54.4
50.0
36.9
26.2
25.6
29.5
24.9
35.7
34.1
36.0
42.5
42.4
6.0
3.6
6.5
9.6
6.5
10.4
18.3
29.9
6.3
5.0
6.5
5.5
5.5
5.5
4.1
6.1
18.3
14.0
19.1
15.8
16.2
15.7
18.0
21.8
8.9
10.7
8.6
7.9
9.4
7.5
6.0
6.4
66.5
70.3
65.9
70.8
68.9
71.3
71.9
65.7
12.1
1.8
10.3
23.6
4.9
18.8
35.1
29.1
11.7
2.3
9.4
22.8
4.4
18.5
36.3
29.2
12.3
1.5
10.8
24.1
5.2
18.9
34.4
29.1
9.5
14.1
6.8
3.2
4.3
2.0
1.0
0.4
72.1
72.6
71.9
47.7
53.7
41.6
25.4
11.5
16.6
11.6
19.5
42.6
37.7
47.6
51.4
31.2
1.8
1.7
1.8
6.5
4.3
8.9
22.1
56.9
5.1
5.5
4.8
5.2
4.7
5.6
5.6
5.3
14.2
13.8
14.5
18.1
17.5
18.8
19.4
23.2
7.9
8.3
7.7
7.1
7.2
7.1
7.3
4.8
72.8
72.5
72.9
69.6
70.6
68.5
67.7
66.7
17.4
6.4
10.9
38.1
19.4
18.7
28.8
15.8
19.8
6.5
13.4
38.6
20.9
17.7
27.4
14.2
15.8
6.4
9.4
37.7
18.4
19.3
29.7
16.8
2.7
2.5
4.2
5.1
4.1
5.9
35.9
35.2
43.4
53.7
53.8
53.7
40.5
40.6
39.0
32.8
32.9
32.7
20.9
21.6
13.5
8.3
9.2
7.7
5.7
5.9
4.0
3.9
3.7
4.0
19.1
19.9
10.8
16.9
17.1
16.7
6.9
6.9
6.9
7.0
4.8
8.6
68.3
67.3
78.3
72.2
74.4
70.6
78.0
71.1
6.9
22.0
9.5
12.5
77.3
66.4
10.9
22.7
10.6
12.1
78.4
74.1
4.3
21.6
8.9
12.7
3.9
1.8
4.1
3.1
3.7
3.0
40.1
27.7
41.4
39.8
48.3
39.2
41.1
50.9
40.0
38.3
31.6
38.7
15.0
19.5
14.5
18.9
16.4
19.0
6.0
4.6
6.1
5.1
5.6
5.1
15.4
7.5
16.3
19.3
18.9
19.4
4.6
4.4
4.7
7.5
9.4
7.3
74.0
83.5
73.0
68.1
66.1
68.2
18.3
18.0
18.6
1.8
3.1
0.9
16.6
14.9
17.7
81.7
82.0
81.4
5.0
4.3
5.4
76.7
77.7
76.0
(Continued on the next page)
4
Table 2. Loan Size and Mortgage Term to Maturity, by Demographic, Loan, Property Characteristics (Continued)
(Percentage Distribution)
Characteristics
$50,000
or Less
Loan Size1
$50,000 to $150,001 to
$150,000
$300,000
More than
$300,000
Less than
15 Years
Mortgage Term to Maturity1
15
15 to 30
30 Years or
Years
Years
More
Share of
All Loans
Share of
Share of
Purchases Refinances
Employment
Full-Time
2.4
37.9
40.2
19.5
5.0
18.5
7.0
69.4
86.3
89.3
84.4
Couple, Both
1.7
34.3
41.6
22.4
5.2
19.5
7.1
68.2
41.6
42.5
41.0
Couple, One
2.8
34.8
41.0
21.4
5.6
18.7
6.8
68.9
27.7
27.6
27.7
Single
3.7
51.5
35.7
9.1
3.7
15.8
7.3
73.1
17.1
19.2
15.7
Not Full-Time
8.2
52.2
29.9
9.7
7.0
19.1
6.3
67.5
13.7
10.7
15.6
Couple, Neither
7.1
46.9
34.0
12.0
8.5
18.2
6.7
66.6
8.7
7.2
9.7
Single
10.0
61.6
22.7
5.7
4.5
20.6
5.7
69.2
4.9
3.4
5.9
Credit Score 1
Lower than 620
5.0
52.0
31.0
12.0
5.2
7.9
11.8
75.1
4.3
4.0
4.4
620 to 679
3.8
41.8
43.2
11.2
2.1
11.2
6.9
79.8
14.6
16.3
13.5
620 to 639
4.9
46.0
38.8
10.3
2.2
10.7
3.5
83.7
3.4
3.7
3.1
640 to 659
1.6
39.7
46.6
12.1
3.0
9.6
8.2
79.2
5.4
5.7
5.2
660 to 679
5.2
41.4
42.5
10.9
1.2
13.0
7.7
78.1
5.8
6.9
5.2
680 to 719
2.9
44.6
39.0
13.5
4.7
13.7
7.0
74.6
14.6
15.0
14.4
680 to 699
4.4
45.0
40.5
10.1
4.6
13.3
8.9
73.3
6.4
6.3
6.5
700 to 719
1.8
44.4
37.8
16.1
4.9
14.1
5.5
75.5
8.2
8.7
8.0
720 or Higher
3.1
37.6
38.3
21.1
6.1
22.0
6.6
65.3
66.5
64.8
67.6
720 to 739
1.9
39.9
39.7
18.6
4.8
14.3
6.3
74.6
9.6
10.5
9.0
740 or Higher
3.2
37.2
38.1
21.5
6.3
23.3
6.7
63.7
56.9
54.3
58.6
Loan Type
Purchase 2
3.2
38.9
40.1
17.9
2.2
8.0
2.3
87.5
38.8
100.0
0.0
First-Time Homeowner1
2.1
44.2
41.8
11.9
0.9
4.7
1.4
93.1
8.5
22.0
0.0
Repeat Homeowner
2.7
35.5
41.2
20.6
1.9
7.5
2.6
87.9
26.6
68.7
0.0
Seasonal Home
5.9
41.4
36.1
16.7
3.3
33.7
0.7
62.4
1.1
2.8
0.0
Relative Home
10.0
67.1
17.2
5.8
5.3
13.0
8.0
73.7
0.5
1.3
0.0
Investment Home
10.4
53.1
25.6
10.9
9.2
13.1
1.6
76.1
2.0
5.2
0.0
2
Refinance
3.3
40.4
38.0
18.3
7.3
25.3
9.9
57.5
61.2
0.0
100.0
Homeowner Cashout3
3.3
37.5
39.7
19.6
8.0
25.8
7.1
59.1
16.8
0.0
27.5
Homeowner Regular
3.0
41.0
37.5
18.5
7.1
25.5
10.8
56.5
39.7
0.0
64.8
Seasonal Home
4.8
34.2
33.1
28.0
9.9
31.0
1.4
57.7
0.8
0.0
1.3
Relative Home
2.3
61.9
25.2
10.6
13.1
32.0
6.5
48.4
0.5
0.0
0.8
Investment Home
6.6
46.5
38.3
8.7
4.0
18.6
14.6
62.8
3.4
0.0
5.6
Property Type
Single-family Detached House
2.9
38.4
40.3
18.4
5.5
18.7
7.0
68.9
84.0
81.8
85.5
Townhouse, Row House, or Villa
2.6
46.2
33.2
18.0
1.8
17.3
5.7
75.2
5.7
6.6
5.2
Mobile or Manufactured Home
17.3
71.3
9.7
1.7
16.2
16.0
13.7
54.1
1.7
2.0
1.4
Two-to-Four Unit Dwelling
5.8
48.5
32.6
13.1
4.3
22.9
8.4
64.3
2.2
2.0
2.3
Condo, Apartment House, or Co-op
2.8
41.1
34.4
21.7
2.3
18.5
5.2
74.0
6.0
7.0
5.4
Other
12.0
54.1
33.9
0.0
21.9
19.0
0.0
59.1
0.3
0.6
0.2
All Respondents
3.2
39.8
38.8
18.1
5.3
18.6
6.9
69.2
100.0
100.0
100.0
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Credit score, loan size, mortgage term to maturity, and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A
homebuyer is classified as first-time if neither the respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
2. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
3. If a refinance mortgage amount is higher than the prior mortgage amount or a if the mortgage is for a previously mortgage-free property, the mortgage is classified as a cashout refinance.
5
Table 3. Credit Score, by Demographic, Loan, and Property Characteristics
(Percentage Distribution)
Characteristics
Respondent Age
35 Years or Younger
36 to 45
46 to 55
56 to 65
Older than 65
Race/Ethnicity
Non-Hispanic White
Hispanic and Non-White
Hispanic White
Asian
Black
Mixed and Other
Respondent Education
High School or Less
Some School
High School
Some College
Technical School
Partial College
College Degree
Postgraduate
Household Income
Less than $50,000
Less than $35,000
$35,000 to $49,999
$50,000 to $99,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 to $174,999
$175,000 or More
Household Type
Couple
Married
With Partner
Single
Male
Female
Military
Active Duty or Veteran
Active Duty
Veteran
No Military Service
Basic Training
Never Served
620 to 679
620 to 639 640 to 659
Credit Score1
680 to 719
All
680 to 699
Lower than
620
All
3.9
5.1
4.0
3.8
4.7
17.6
15.7
15.4
12.2
8.5
3.8
3.4
3.5
3.4
1.8
6.0
5.8
5.7
5.0
3.2
7.8
6.5
6.2
3.8
3.5
16.2
16.4
13.6
13.1
12.9
3.8
5.4
6.6
2.1
9.1
4.8
13.9
16.4
17.9
7.9
22.4
17.4
2.9
4.6
5.5
1.7
7.1
4.5
5.3
5.6
4.5
4.7
5.4
6.6
5.7
6.3
7.9
1.6
9.8
6.3
7.4
4.8
7.8
5.8
5.2
5.9
3.8
2.3
19.3
27.0
17.9
21.2
18.5
21.9
13.3
8.9
5.2
4.7
5.3
4.9
5.1
4.8
3.2
1.5
8.8
15.0
7.7
7.1
4.2
7.8
4.7
3.5
7.9
11.4
5.8
4.6
4.3
4.8
3.1
1.7
19.4
19.3
19.5
15.8
15.4
16.1
13.8
8.0
5.2
4.8
5.4
3.5
3.3
3.7
3.2
1.2
4.1
4.1
4.0
4.7
3.4
5.7
14.7
14.3
18.8
14.2
11.9
15.9
4.6
3.4
4.7
4.2
6.9
4.0
15.7
14.0
15.8
14.4
16.2
14.2
660 to 679
720 or Higher
720 to 739 740 or Higher
Share of
All Loans
700 to 719
All
6.4
6.9
6.3
6.2
6.1
9.9
9.5
7.3
6.9
6.8
62.2
62.8
67.1
70.9
73.8
12.7
9.5
9.1
8.3
6.8
49.6
53.3
58.0
62.6
67.0
21.9
23.3
24.2
19.8
10.7
14.7
14.6
17.7
6.4
23.7
13.2
6.6
5.9
5.3
1.7
10.1
6.6
8.1
8.6
12.4
4.6
13.6
6.6
67.6
63.6
57.8
83.6
44.8
64.5
9.2
10.5
14.8
6.5
11.7
9.9
58.4
53.1
43.0
77.1
33.1
54.6
72.8
27.2
5.5
5.7
5.0
11.1
5.3
7.3
5.0
9.3
9.1
9.3
5.4
3.9
21.2
28.6
19.9
16.4
12.3
17.5
14.3
10.9
9.6
20.7
7.7
6.8
5.2
7.2
6.8
4.2
11.6
7.9
12.3
9.6
7.2
10.3
7.4
6.7
52.1
39.5
54.3
56.6
64.0
54.7
68.7
77.9
10.5
7.6
11.0
9.4
9.7
9.3
10.0
8.8
41.6
31.9
43.3
47.2
54.3
45.3
58.7
69.1
12.1
1.8
10.3
23.6
4.9
18.8
35.1
29.1
6.0
6.5
5.7
6.3
5.8
6.8
5.1
3.3
8.3
8.0
8.5
6.0
6.4
5.6
5.5
3.5
17.9
16.3
18.8
16.3
17.9
14.6
13.1
10.0
8.6
9.5
8.0
7.3
8.1
6.4
5.2
4.1
9.3
6.8
10.8
9.0
9.8
8.2
7.9
5.9
54.9
53.0
55.9
63.4
62.4
64.5
70.1
80.3
10.6
10.0
10.9
10.3
10.1
10.5
8.8
8.2
44.3
43.0
45.0
53.1
52.2
54.0
61.3
72.1
17.4
6.4
10.9
38.1
19.4
18.7
28.8
15.8
3.2
2.9
5.5
4.0
2.8
4.9
5.8
5.6
7.7
3.9
3.1
4.5
5.7
5.7
5.6
6.3
6.0
6.5
14.5
14.5
15.2
15.1
16.0
14.3
6.2
6.1
6.7
7.3
7.1
7.4
8.4
8.4
8.5
7.8
8.9
6.9
66.6
67.1
62.0
66.0
68.7
64.0
9.4
9.1
12.5
10.1
11.0
9.4
57.2
57.9
49.5
55.9
57.7
54.6
78.0
71.1
6.9
22.0
9.5
12.5
2.6
0.0
2.9
3.5
3.9
3.5
6.6
11.1
6.1
5.1
6.3
5.1
6.5
2.9
6.8
5.7
6.0
5.7
16.0
23.5
15.2
14.3
14.2
14.4
7.1
11.4
6.6
6.3
6.9
6.2
8.9
12.2
8.5
8.1
7.3
8.1
63.8
59.1
64.3
67.1
62.7
67.4
10.0
13.8
9.6
9.5
11.4
9.4
6
53.8
18.3
45.3
1.8
54.7
16.6
57.6
81.7
51.3
5.0
58.0
76.7
(Continued on the next page)
Table 3. Credit Score, by Demographic, Loan, and Property Characteristics (Continued)
(Percentage Distribution)
Credit Score1
680 to 719
All
680 to 699
Characteristics
Lower than
620
620 to 679
620 to 639 640 to 659
720 or Higher
720 to 739 740 or Higher
Share of
All Loans
All
660 to 679
700 to 719
All
Employment
Full-Time
4.1
15.4
3.5
5.6
6.2
15.3
6.7
8.6
65.3
9.8
55.4
86.3
Couple, Both
4.4
16.3
3.5
6.2
6.6
15.4
6.0
9.5
63.8
9.9
54.0
41.6
Couple, One
3.7
13.9
3.0
5.8
5.2
14.5
7.2
7.3
67.9
9.5
58.5
27.7
Single
4.0
15.5
4.4
4.0
7.0
16.3
7.7
8.5
64.3
10.2
54.1
17.1
Not Full-Time
5.4
9.7
2.3
4.0
3.4
10.5
4.4
6.1
74.4
8.0
66.3
13.7
Couple, Neither
4.3
9.7
2.1
4.4
3.2
10.2
3.7
6.5
75.8
7.1
68.6
8.7
Single
7.4
9.8
2.6
3.4
3.8
10.9
5.6
5.3
71.9
9.6
62.3
4.9
Credit Score 1
Lower than 620
100.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
4.3
620 to 679
0.0
100.0
23.0
37.0
40.0
0.0
0.0
0.0
0.0
0.0
0.0
14.6
620 to 639
0.0
100.0
100.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
3.4
640 to 659
0.0
100.0
0.0
100.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
5.4
660 to 679
0.0
100.0
0.0
0.0
100.0
0.0
0.0
0.0
0.0
0.0
0.0
5.8
680 to 719
0.0
0.0
0.0
0.0
0.0
100.0
43.7
56.3
0.0
0.0
0.0
14.6
680 to 699
0.0
0.0
0.0
0.0
0.0
100.0
100.0
0.0
0.0
0.0
0.0
6.4
700 to 719
0.0
0.0
0.0
0.0
0.0
100.0
0.0
100.0
0.0
0.0
0.0
8.2
720 or Higher
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
100.0
14.4
85.6
66.5
720 to 739
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
100.0
100.0
0.0
9.6
740 or Higher
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
100.0
0.0
100.0
56.9
Loan Type
Purchase 2
4.0
16.3
3.7
5.7
6.9
15.0
6.3
8.7
64.8
10.5
54.3
38.8
First-Time Homeowner1
4.2
18.2
2.5
7.3
8.4
17.7
8.1
9.6
59.9
11.5
48.4
8.5
Repeat Homeowner
4.2
17.3
4.5
5.8
6.9
15.1
6.2
8.9
63.4
10.6
52.8
26.6
Seasonal Home
0.0
0.0
0.0
0.0
0.0
8.2
3.0
5.3
91.8
7.4
84.3
1.1
Relative Home
6.3
7.3
2.6
2.2
2.4
8.7
3.4
5.3
77.7
0.0
77.7
0.5
Investment Home
1.4
5.7
0.0
1.4
4.3
6.7
3.1
3.6
86.2
9.3
76.8
2.0
Refinance 2
4.4
13.5
3.1
5.2
5.2
14.4
6.5
8.0
67.6
9.0
58.6
61.2
Homeowner Cashout3
6.3
16.4
4.0
6.1
6.3
16.6
8.0
8.6
60.6
8.5
52.1
16.8
Homeowner Regular
3.7
12.7
2.9
4.9
4.9
13.8
5.8
7.9
69.8
9.9
59.9
39.7
Seasonal Home
0.0
14.7
3.4
9.2
2.1
7.4
7.4
0.0
77.9
4.0
74.0
0.8
Relative Home
2.9
11.1
6.8
0.0
4.3
18.5
3.5
15.1
67.4
0.0
67.4
0.5
Investment Home
4.5
9.0
0.9
3.9
4.2
12.1
6.2
5.9
74.4
3.9
70.5
3.4
Property Type
Single-family Detached House
4.4
15.1
3.1
5.8
6.2
15.1
6.5
8.5
65.4
9.7
55.7
84.0
Townhouse, Row House, or Villa
2.7
11.4
4.3
1.8
5.3
12.5
5.5
6.9
73.5
8.5
65.0
5.7
Mobile or Manufactured Home
18.7
21.7
9.2
3.8
8.7
12.3
7.3
5.0
47.3
8.4
38.9
1.7
Two-to-Four Unit Dwelling
1.6
12.2
4.3
4.5
3.4
16.0
7.2
8.8
70.2
5.7
64.5
2.2
Condo, Apartment House, or Co-op
0.3
9.8
3.6
4.1
2.2
10.2
4.3
5.9
79.7
10.2
69.5
6.0
Other
0.0
19.3
8.5
5.7
5.1
25.6
15.0
10.6
55.1
20.9
34.2
0.3
All Respondents
4.3
14.6
3.4
5.4
5.8
14.6
6.4
8.2
66.5
9.6
56.9
100.0
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Credit score, loan size, mortgage term to maturity, and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A
homebuyer is classified as first-time if neither the respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
2. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
3. If a refinance mortgage amount is higher than the prior mortgage amount or a if the mortgage is for a previously mortgage-free property, the mortgage is classified as a cashout refinance.
7
Table 4. Loan Type, by Demographic and Property Characteristics
(Percentage Distribution)
Loan Type2
Characteristics
Respondent Age
35 Years or Younger
36 to 45
46 to 55
56 to 65
Older than 65
Race/Ethnicity
Non-Hispanic White
Hispanic and Non-White
Hispanic White
Asian
Black
Mixed and Other
Respondent Education
High School or Less
Some School
High School
Some College
Technical School
Partial College
College Degree
Postgraduate
Household Income
Less than $50,000
Less than $35,000
$35,000 to $49,999
$50,000 to $99,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 to $174,999
$175,000 or More
Household Type
Couple
Married
With Partner
Single
Male
Female
Military
Active Duty or Veteran
Active Duty
Veteran
No Military Service
Basic Training
Never Served
Purchase2
Repeat
Seasonal
All
First-Time1
70.7
37.3
26.8
26.0
27.4
28.7
6.3
3.2
0.0
0.0
39.9
28.5
19.5
20.6
22.6
0.1
0.4
1.6
1.9
1.9
0.1
0.1
0.3
1.1
1.5
37.8
41.4
45.5
38.2
40.0
41.7
8.1
9.8
10.3
10.3
9.9
9.2
26.1
28.0
31.2
22.3
27.7
29.4
1.2
0.8
1.1
0.9
0.0
0.9
37.6
49.4
35.5
37.5
34.8
38.2
40.0
38.8
6.9
8.6
6.6
7.3
10.7
6.4
10.3
8.1
27.1
38.0
25.1
27.0
21.1
28.6
26.2
26.6
44.3
39.1
47.3
39.3
41.9
36.7
36.9
34.8
15.2
11.7
17.2
10.3
11.7
8.9
5.0
3.3
38.4
36.2
61.9
39.9
43.0
37.5
38.1
68.8
34.8
38.9
33.6
39.3
Refinance2
Regular Seasonal
Share of
All Loans
All
Cashout3
1.9
1.9
2.2
2.4
1.4
29.3
62.7
73.2
74.0
72.6
7.0
15.7
21.5
21.1
21.0
20.2
42.3
47.1
45.8
45.7
0.0
0.3
0.9
1.8
1.5
0.2
0.4
0.4
0.9
0.6
1.9
4.0
3.3
4.4
3.7
21.9
23.3
24.2
19.8
10.7
0.6
0.2
0.5
0.0
0.0
0.3
1.7
2.7
2.4
4.8
2.3
1.9
62.2
58.6
54.5
61.8
60.0
58.3
17.5
15.1
13.0
15.8
13.6
16.4
40.4
37.9
36.0
41.8
40.9
35.4
1.0
0.4
0.2
0.0
0.3
0.7
0.5
0.5
0.4
0.2
1.3
0.4
3.0
4.7
4.9
4.0
3.8
5.4
72.8
27.2
5.5
5.7
5.0
11.1
0.8
0.0
1.0
1.2
0.9
1.2
1.0
1.2
0.8
0.0
0.9
0.5
0.8
0.4
0.2
0.7
2.0
2.8
1.9
1.4
1.2
1.5
2.3
2.1
62.4
50.6
64.5
62.5
65.2
61.8
60.0
61.2
22.0
20.9
22.1
16.3
15.6
16.5
16.6
15.4
38.7
28.0
40.6
41.1
45.6
39.9
38.5
40.4
0.2
0.9
0.1
0.6
0.4
0.6
0.9
1.1
0.4
0.0
0.5
0.5
0.7
0.4
0.4
0.7
1.1
0.7
1.1
4.1
2.9
4.4
3.6
3.7
12.1
1.8
10.3
23.6
4.9
18.8
35.1
29.1
27.3
26.2
27.9
26.5
28.1
24.8
27.8
24.0
0.5
0.0
0.9
0.5
0.5
0.6
1.2
2.8
0.2
0.0
0.3
0.4
0.2
0.6
0.7
0.7
1.1
1.1
1.0
1.6
1.3
1.8
2.1
3.9
55.7
60.9
52.7
60.7
58.1
63.3
63.1
65.2
18.3
18.4
18.2
17.3
16.1
18.6
16.2
15.3
34.0
37.7
31.9
40.0
39.1
41.0
41.8
41.3
0.3
0.8
0.0
0.5
0.3
0.6
0.8
2.2
0.7
0.8
0.7
0.2
0.3
0.1
0.4
1.2
2.4
3.3
2.0
2.7
2.3
3.1
4.0
5.3
17.4
6.4
10.9
38.1
19.4
18.7
28.8
15.8
5.9
5.7
8.2
17.8
20.9
15.4
28.6
26.4
51.1
19.7
19.4
19.8
1.3
1.3
0.5
0.5
0.5
0.5
0.6
0.6
0.4
0.2
0.1
0.3
2.1
2.1
1.7
1.7
2.0
1.5
61.6
63.8
38.1
60.1
57.0
62.5
16.9
17.7
8.9
16.5
17.7
15.7
39.9
41.1
26.7
39.0
34.6
42.4
0.9
0.9
0.6
0.6
0.6
0.6
0.4
0.5
0.2
0.6
0.8
0.5
3.5
3.6
1.8
3.3
3.3
3.3
78.0
71.1
6.9
22.0
9.5
12.5
5.3
17.2
4.1
9.3
5.1
9.5
28.2
45.4
26.4
26.3
26.1
26.3
1.3
0.0
1.4
1.0
1.0
1.0
1.1
0.0
1.2
0.4
0.2
0.4
2.2
6.2
1.7
2.0
1.2
2.0
61.9
31.2
65.2
61.1
66.4
60.7
18.4
5.8
19.8
16.5
15.2
16.6
38.4
17.8
40.6
40.0
46.4
39.6
1.1
0.0
1.2
0.7
0.3
0.8
0.3
3.8
18.3
0.0
7.6
1.8
0.3
3.4
16.6
0.5
3.4
81.7
0.9
3.6
5.0
0.5
3.3
76.7
(Continued on the next page)
Relative
8
Investment
Relative
Investment
Table 4. Loan Type, by Demographic and Property Characteristics (Continued)
(Percentage Distribution)
Loan Type2
Characteristics
Refinance2
Regular Seasonal
Purchase2
Repeat
Seasonal
Share of
All Loans
Relative Investment
All
All
Relative Investment
First-Time1
Cashout3
Employment
Full-Time
40.1
9.6
27.1
1.1
0.4
2.0
59.9
16.2
39.2
0.7
0.5
3.4
Couple, Both
39.6
8.0
27.9
1.0
0.4
2.2
60.4
16.7
39.5
0.5
0.5
3.2
Couple, One
38.7
4.2
30.6
1.3
0.5
2.0
61.3
15.9
40.3
1.1
0.4
3.7
Single
43.7
22.0
19.3
0.6
0.2
1.5
56.3
15.2
36.9
0.4
0.6
3.4
Not Full-Time
30.3
2.1
23.8
1.3
1.0
2.0
69.7
21.1
42.5
1.7
0.6
3.8
Couple, Neither
32.1
1.5
25.4
2.0
1.5
1.7
67.9
21.1
40.3
1.9
0.5
4.2
Single
27.0
3.2
20.9
0.2
0.3
2.4
73.0
21.3
46.3
1.3
0.9
3.2
Credit Score 1
Lower than 620
36.4
8.5
26.4
0.0
0.7
0.7
63.6
25.1
34.6
0.0
0.3
3.6
620 to 679
43.2
10.7
31.5
0.0
0.3
0.8
56.8
18.9
34.6
0.8
0.4
2.1
620 to 639
42.9
6.5
36.1
0.0
0.4
0.0
57.1
20.1
34.2
0.8
1.0
1.0
640 to 659
40.9
11.5
28.6
0.0
0.2
0.5
59.1
18.9
36.4
1.4
0.0
2.5
660 to 679
45.4
12.3
31.5
0.0
0.2
1.5
54.6
18.2
33.3
0.3
0.4
2.4
680 to 719
39.6
10.3
27.5
0.6
0.3
0.9
60.4
19.1
37.4
0.4
0.6
2.8
680 to 699
38.2
10.8
25.7
0.5
0.3
1.0
61.8
21.1
36.2
0.9
0.3
3.3
700 to 719
40.8
9.9
28.9
0.7
0.3
0.9
59.2
17.6
38.3
0.0
0.9
2.5
720 or Higher
37.8
7.7
25.4
1.5
0.6
2.6
62.2
15.3
41.6
0.9
0.5
3.8
720 to 739
42.4
10.2
29.4
0.8
0.0
2.0
57.6
14.9
40.9
0.3
0.0
1.4
740 or Higher
37.0
7.3
24.7
1.6
0.7
2.7
63.0
15.4
41.7
1.0
0.6
4.3
Loan Type
Purchase 2
100.0
22.0
68.7
2.8
1.3
5.2
0.0
0.0
0.0
0.0
0.0
0.0
First-Time Homeowner1
100.0
100.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Repeat Homeowner
100.0
0.0
100.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Seasonal Home
100.0
0.0
0.0
100.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Relative Home
100.0
0.0
0.0
0.0
100.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Investment Home
100.0
0.0
0.0
0.0
0.0
100.0
0.0
0.0
0.0
0.0
0.0
0.0
2
Refinance
0.0
0.0
0.0
0.0
0.0
0.0
100.0
27.5
64.8
1.3
0.8
5.6
Homeowner Cashout3
0.0
0.0
0.0
0.0
0.0
0.0
100.0
100.0
0.0
0.0
0.0
0.0
Homeowner Regular
0.0
0.0
0.0
0.0
0.0
0.0
100.0
0.0
100.0
0.0
0.0
0.0
Seasonal Home
0.0
0.0
0.0
0.0
0.0
0.0
100.0
0.0
0.0
100.0
0.0
0.0
Relative Home
0.0
0.0
0.0
0.0
0.0
0.0
100.0
0.0
0.0
0.0
100.0
0.0
Investment Home
0.0
0.0
0.0
0.0
0.0
0.0
100.0
0.0
0.0
0.0
0.0
100.0
Property Type
Single-family Detached House
37.7
8.3
26.9
0.8
0.4
1.4
62.3
17.5
40.9
0.7
0.5
2.7
Townhouse, Row House, or Villa
44.2
10.2
27.9
1.4
1.7
3.1
55.8
12.0
36.3
0.8
0.4
6.3
Mobile or Manufactured Home
47.7
6.1
36.5
2.4
1.9
0.8
52.3
16.7
33.0
0.7
0.5
1.4
Two-to-Four Unit Dwelling
35.2
5.7
15.3
0.4
0.0
13.8
64.8
19.2
24.8
0.5
1.5
18.9
Condo, Apartment House, or Co-op
45.2
11.5
23.2
4.2
0.8
5.6
54.8
12.5
33.6
2.3
0.7
5.7
Other
67.0
21.7
36.0
0.0
0.0
9.3
33.0
5.7
24.7
0.0
0.0
2.6
All Respondents
38.8
8.5
26.6
1.1
0.5
2.0
61.2
16.8
39.7
0.8
0.5
3.4
Source: National Survey of Mortgage Originationss, 2013
Notes: 1. Credit score, loan size, mortgage term to maturity, and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A
homebuyer is classified as first-time if neither the respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
2. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
3. If a refinance mortgage amount is higher than the prior mortgage amount or a if the mortgage is for a previously mortgage-free property, the mortgage is classified as a cashout refinance.
9
86.3
41.6
27.7
17.1
13.7
8.7
4.9
4.3
14.6
3.4
5.4
5.8
14.6
6.4
8.2
66.5
9.6
56.9
38.8
8.5
26.6
1.1
0.5
2.0
61.2
16.8
39.7
0.8
0.5
3.4
84.0
5.7
1.7
2.2
6.0
0.3
100.0
Table 5. Property Type, by Demographic and Loan Characteristics
(Percentage Distribution)
Characteristics
Property Type
Single-Family
Respondent Age
35 Years or Younger
36 to 45
46 to 55
56 to 65
Older than 65
Race/Ethnicity
Non-Hispanic White
Hispanic and Non-White
Hispanic White
Asian
Black
Mixed and Other
Respondent Education
High School or Less
Some School
High School
Some College
Technical School
Partial College
College Degree
Postgraduate
Household Income
Less than $50,000
Less than $35,000
$35,000 to $49,999
$50,000 to $99,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 to $174,999
$175,000 or More
Household Type
Couple
Married
With Partner
Single
Male
Female
Military
Active Duty or Veteran
Active Duty
Veteran
No Military Service
Basic Training
Never Served
Townhouse
Mobile
Two-to-Four Unit
Condo
Other
Share of
All Loans
83.0
83.9
87.0
83.3
81.1
6.5
5.6
5.1
6.0
5.5
1.6
1.8
1.3
1.4
2.6
1.5
2.0
1.9
3.0
3.2
7.0
6.1
4.5
6.0
7.3
0.4
0.6
0.1
0.3
0.2
21.9
23.3
24.2
19.8
10.7
85.3
80.7
78.4
73.7
79.8
85.8
5.3
7.0
7.4
11.5
9.2
3.6
2.0
0.8
1.1
0.3
0.5
1.1
2.0
2.6
3.0
2.0
3.9
2.2
5.2
8.3
9.6
12.0
5.6
6.8
0.2
0.6
0.5
0.6
0.9
0.4
72.8
27.2
5.5
5.7
5.0
11.1
85.8
82.0
86.5
86.6
87.3
86.4
83.1
82.4
2.8
3.0
2.8
4.9
3.7
5.2
6.8
6.4
4.2
3.3
4.3
2.9
1.2
3.3
0.9
0.6
2.5
4.2
2.2
2.3
4.0
1.8
2.3
1.9
3.8
4.6
3.7
3.0
3.1
2.9
6.9
8.4
0.9
2.9
0.5
0.4
0.7
0.3
0.1
0.3
12.1
1.8
10.3
23.6
4.9
18.8
35.1
29.1
81.3
80.4
81.8
85.0
83.5
86.6
85.0
82.9
5.1
3.8
5.9
5.6
6.7
4.4
5.6
7.1
3.5
4.0
3.3
2.2
2.3
2.1
0.7
0.1
3.8
6.1
2.5
2.2
2.4
2.0
1.6
1.5
5.3
5.1
5.3
4.8
4.8
4.8
6.8
8.5
0.9
0.6
1.1
0.2
0.3
0.1
0.3
0.0
17.4
6.4
10.9
38.1
19.4
18.7
28.8
15.8
87.0
88.0
75.7
73.7
74.5
73.1
4.7
4.4
6.9
9.6
8.2
10.7
1.6
1.5
2.0
2.0
2.4
1.7
1.9
1.8
3.0
3.3
3.3
3.3
4.7
4.0
12.4
10.6
10.4
10.7
0.2
0.2
0.0
0.8
1.2
0.5
78.0
71.1
6.9
22.0
9.5
12.5
87.9
87.8
87.9
83.2
86.0
83.0
4.0
5.3
3.9
6.1
5.0
6.2
1.9
0.9
2.0
1.6
1.6
1.6
1.9
0.0
2.1
2.3
3.0
2.2
3.8
4.1
3.7
6.5
3.9
6.7
10
0.6
18.3
1.8
1.8
0.4
16.6
0.3
81.7
0.5
5.0
0.3
76.7
(Continued on the next page)
Table 5. Property Type, by Demographic and Loan Characteristics (Continued)
(Percentage Distribution)
Characteristics
Single-Family
Property Type
Mobile
Two-to-Four Unit
Townhouse
Condo
Other
Share of
All Loans
Employment
Full-Time
84.7
5.7
1.5
1.9
6.0
0.3
86.3
Couple, Both
86.3
5.0
1.4
1.9
5.1
0.2
41.6
Couple, One
88.5
4.0
1.5
1.4
4.4
0.2
27.7
Single
74.4
9.8
1.5
2.5
11.0
0.9
17.1
Not Full-Time
80.2
6.4
2.8
4.3
6.0
0.3
13.7
Couple, Neither
85.1
4.8
2.4
3.4
4.1
0.1
8.7
Single
71.5
9.1
3.6
6.0
9.2
0.6
4.9
Credit Score 1
Lower than 620
87.9
3.6
7.3
0.8
0.4
0.0
4.3
620 to 679
86.7
4.5
2.5
1.8
4.1
0.4
14.6
620 to 639
78.1
7.4
4.5
2.8
6.4
0.8
3.4
640 to 659
90.2
1.9
1.2
1.8
4.5
0.3
5.4
660 to 679
88.5
5.2
2.5
1.3
2.2
0.3
5.8
680 to 719
86.5
4.9
1.4
2.4
4.2
0.6
14.6
680 to 699
85.9
5.0
1.9
2.4
4.0
0.8
6.4
700 to 719
87.0
4.8
1.0
2.4
4.3
0.4
8.2
720 or Higher
82.7
6.4
1.2
2.3
7.2
0.3
66.5
720 to 739
85.0
5.1
1.4
1.3
6.4
0.7
9.6
740 or Higher
82.3
6.6
1.1
2.5
7.4
0.2
56.9
Loan Type
Purchase 2
81.8
6.6
2.0
2.0
7.0
0.6
38.8
First-Time Homeowner1
81.5
6.9
1.2
1.5
8.1
0.8
8.5
Repeat Homeowner
84.8
6.0
2.3
1.3
5.2
0.4
26.6
Seasonal Home
65.3
7.3
3.6
0.7
23.1
0.0
1.1
Relative Home
65.7
18.9
6.1
0.0
9.4
0.0
0.5
Investment Home
56.9
8.9
0.7
15.1
17.0
1.5
2.0
2
Refinance
85.5
5.2
1.4
2.3
5.4
0.2
61.2
Homeowner Cashout3
87.2
4.1
1.6
2.5
4.5
0.1
16.8
Homeowner Regular
86.7
5.3
1.4
1.4
5.1
0.2
39.7
Seasonal Home
73.8
5.8
1.5
1.4
17.5
0.0
0.8
Relative Home
78.3
5.0
1.6
6.7
8.4
0.0
0.5
Investment Home
66.6
10.5
0.7
12.0
9.9
0.2
3.4
Property Type
Single-family Detached House
100.0
0.0
0.0
0.0
0.0
0.0
84.0
Townhouse, Row House, or Villa
0.0
100.0
0.0
0.0
0.0
0.0
5.7
Mobile or Manufactured Home
0.0
0.0
100.0
0.0
0.0
0.0
1.7
Two-to-Four Unit Dwelling
0.0
0.0
0.0
100.0
0.0
0.0
2.2
Condo, Apartment House, or Co-op
0.0
0.0
0.0
0.0
100.0
0.0
6.0
Other
0.0
0.0
0.0
0.0
0.0
100.0
0.3
All Respondents
84.0
5.7
1.7
2.2
6.0
0.3
100.0
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Credit score, loan size, mortgage term to maturity, and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A
homebuyer is classified as first-time if neither the respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
2. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
3. If a refinance mortgage amount is higher than the prior mortgage amount or a if the mortgage is for a previously mortgage-free property, the mortgage is classified as a cashout refinance.
11
Table 6. Household Life Events, by Loan and Demographic Characteristics
(Percent Who Experienced Each Event in the Last Several Years)
Characteristics
Divorced or
Separated
Married or Had
a Partner
Death in
Household
Addition to
Household
Left
Household
Disability or
Illness
Disaster to
Home
Disaster to
Work or Job
Moved Less
than 50 Miles
Moved 50
Miles or More
Loan Type
Purchase 1
6.4
15.6
2.8
16.3
5.2
7.3
1.2
1.7
62.8
25.8
First-Time Homeowner2
5.9
20.1
2.6
13.6
3.5
3.8
0.7
1.2
74.3
22.8
Repeat Homeowner
7.2
15.6
2.9
18.7
5.5
8.6
1.4
2.0
66.5
29.3
Non-Occupant Owner
1.2
5.1
1.6
4.7
7.5
5.7
1.0
0.5
8.1
6.8
Refinance 1
4.9
6.6
3.4
11.8
9.8
9.4
2.0
3.0
5.4
3.2
Homeowner Cashout3
6.2
7.2
3.9
11.3
10.8
10.0
2.3
3.8
6.1
3.0
Homeowner Regular
4.4
6.1
3.2
11.7
9.2
9.2
1.8
2.8
3.9
2.4
Non-Occupant Owner
4.8
9.1
3.8
14.5
10.8
8.0
1.8
2.3
14.5
11.4
Loan Size
$50,000 or Less
7.4
3.9
6.3
7.1
8.1
10.8
2.5
1.8
22.8
6.7
$50,001 to $150,000
6.2
10.1
3.7
10.9
8.5
10.1
1.7
2.4
25.5
9.4
$150,001 to $300,000
5.4
11.1
2.7
15.1
7.8
7.8
1.6
2.7
29.2
13.9
More than $300,000
3.7
9.1
2.3
17.2
7.4
6.2
1.6
2.5
29.8
14.4
Credit Score 2
Lower than 620
7.8
12.6
5.5
17.0
10.1
11.2
2.9
6.3
27.3
12.2
620 to 679
6.0
12.6
3.6
16.4
8.4
9.5
2.6
3.4
34.4
10.8
680 to 719
6.6
10.6
3.8
14.2
9.7
11.0
1.3
2.9
29.1
11.8
720 or Higher
5.0
9.3
2.8
12.6
7.4
7.6
1.5
2.0
25.8
12.3
Respondent Age
35 Years or Younger
3.5
23.5
1.1
26.7
2.7
3.4
0.7
1.1
53.9
19.1
36 to 45
6.0
9.6
1.6
18.3
5.1
5.4
1.8
1.9
27.6
11.8
46 to 55
9.0
6.6
3.2
6.3
14.7
8.5
1.7
3.8
19.9
8.3
56 to 65
4.8
4.0
4.7
6.9
11.2
13.9
2.4
3.1
15.6
8.9
Older than 65
1.8
3.1
8.0
4.9
4.3
16.1
2.0
2.6
13.7
11.8
Race/Ethnicity
Non-Hispanic White
5.5
9.3
3.2
12.9
8.5
8.8
1.6
2.5
26.7
11.8
Hispanic and Non-White
5.4
12.4
3.2
15.2
6.6
8.0
1.7
2.5
30.1
12.4
Respondent Education
High School or Less
6.5
7.4
5.6
11.1
8.4
12.2
1.6
2.5
25.3
8.8
Some College
6.9
10.4
4.2
10.9
9.0
10.9
1.7
2.9
26.6
10.0
College Degree
5.6
11.3
2.3
15.1
7.4
7.4
1.6
2.6
29.5
11.9
Postgraduate
3.7
9.5
2.5
14.9
7.8
6.5
1.8
2.1
27.2
15.0
Household Income
Less than $50,000
9.4
7.0
6.4
11.0
7.2
13.6
1.6
4.0
31.8
11.6
$50,000 to $99,999
6.2
10.4
3.7
12.4
7.2
9.6
1.9
2.6
28.6
11.7
$100,000 to $174,999
3.8
12.3
1.6
16.2
8.6
6.2
1.6
2.0
25.7
12.8
$175,000 or More
2.6
8.9
1.2
14.3
9.7
4.6
1.3
1.7
24.2
11.2
Household Type
Couple
2.1
12.5
1.7
15.5
8.0
8.7
1.5
2.6
26.6
12.6
Single
17.5
1.8
8.3
6.7
7.9
8.2
2.2
2.3
31.3
9.6
All Respondents
5.5
10.1
3.2
13.5
8.0
8.6
1.7
2.5
27.6
12.0
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A homebuyer is classified as first-time if neither the
respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a cashout refinance.
12
About 48 percent of respondents were between the ages of 36 and 55 years, and nearly 20
percent were 56 to 65 years old (See Table 2). Twenty-two percent were 35 years old or younger
and 11 percent were older than 65. By race and ethnicity, 73 percent of respondents reported that
they were non-Hispanic white with almost six percent reporting they were Hispanic white.
Asians were nearly six percent of respondents, and Black or African Americans accounted for
five percent of respondents. Eleven percent indicated that they were mixed or other race.
More than three-quarters of households in the NSMO are couples with 71 percent reporting they
were married and seven percent reporting they were living with a partner. More than 20 percent
of respondents indicated they were single; with 10 percent reporting they were male and 13
percent reporting they were female. More than 86 percent of borrowers’ households included at
least one full-time worker. Less than one in five respondents reported that they were active duty
or veterans of the US military with 82 percent indicating they had no current or past military
service.
Comparing respondents to the NSMO with 2013 Survey of Consumer Finances (SCF) conducted
by the Federal Reserve, mortgage borrowers tend to have higher incomes than other households.
For example, about 17 percent of NSMO respondents had total annual family income of less than
$50,000, while an estimated 16 percent of borrowers in the NSMO reported annual income of
$175,000 or more. 3 By comparison, according to estimates from the 2013 SCF, 53 percent of all
families (including renters and homeowners that did not have a mortgage) had income less than
$50,000 and eight percent of all families had income of $175,000 or more. Considering only
families in the SCF who took out a mortgage or home-equity loan in 2013, 17 percent of these
had income less than $50,000 and 19 percent had annual income of at least $175,000.
Two-thirds of survey respondents had a credit score of 720 or higher, 29 percent had a credit
score between 620 and 719, and only four percent of respondents had a credit score below 620
(Table 3).
The majority of 2013 mortgage loans reported in the survey were for refinancing an existing
mortgage (Table 3). Sixty-one percent of survey respondents reported they refinanced an
existing mortgage while 39 percent reported they purchased a home. An estimated 17 percent
were refinances of the borrower’s primary residence and included borrowing additional money,
40 percent were refinances of the borrower’s primary residence without extracting equity and the
remainder were refinancing of investment properties (three percent), seasonal homes (one
percent), or a relative’s home (one percent). Investors, including owners of seasonal and relative
homes, represented eight percent of all mortgage borrowers in 2013. Owner occupants
represented 92 percent of mortgage borrowers, with 35 percent purchasing a home and 57
percent refinancing an existing mortgage. Single-family properties were the primary property
type used to collateralize the respondent’s mortgage (Table 5). Eighty-four percent of the
3
For more about the Survey of Consumer Finances including results from the 2013 SCF, see
http://www.federalreserve.gov/econresdata/scf/scfindex.htm
13
properties reported by survey respondents were single-family detached homes. Condominiums
and townhouses were each reported by about six percent of respondents, and the remaining four
percent of properties reported to be mobile homes and 2-, 3-, and 4-unit dwellings.
The estimates in Table 6 indicate that different life events had each affected about five percent of
all recent mortgage borrowers overall. For example, six percent of all respondents indicated that
they were divorced or separated in the last few years, and 10 percent indicated they had married
or obtained a new partner. Roughly nine percent reported experiencing a disability or major
illness and another three percent reported a disaster that affected either their job. Finally, 28
percent indicated that they moved less than 50 miles from their previous residence, and 12
percent indicated that they have moved 50 miles or more from their previous residence. In
general, each of the life events shown in Table 6 is common among most groups of borrowers.
4.0
The Search for a Mortgage
Mortgage shopping behavior differed significantly by borrower characteristics and by whether
the consumer was also shopping for a home at the same time as the mortgage. First-time home
buyers differed significantly from repeat home buyers in their mortgage search behavior and
repeat borrowers differed significantly in their mortgage search behavior depending on whether
they were refinancing or purchasing a home. Investors (non-owner occupants), both for home
purchasers and refinancers, differed from other mortgage borrowers.
Searching for a mortgage is often intertwined with the search for a home, and the mortgage
transaction can be heavily influenced by the housing transaction. Even when the consumer is
refinancing an existing mortgage, the mortgage search can be confusing and stressful and the
settlement process and expenses can influence the consumer’s search behavior for the mortgage.
Selecting a mortgage can be especially complicated for first-time borrowers. This section
examines how respondents searched for a mortgage, with an emphasis on those buying their first
property.
The survey asked about each respondent’s assessment of their prior knowledge about getting a
mortgage to gauge their familiarity with the basics of mortgage loan terms. Overall only 3 to 10
percent of respondents reported that they were not at all familiar with either the types of
mortgages available, the process, interest rate levels, down payment or income requirements or
the type of credit history that was expected (Table 7). First-time buyers were even less likely to
indicate that they were familiar with the process of taking out a mortgage, and the types of
mortgages, or interest rates available compared both to borrowers who had bought a home before
and to those who refinanced. First-time homebuyers were also much more likely compared to
other borrowers to indicate that they were not at all familiar with the income required for a
mortgage, credit history required, down payment, or the amount of money required at closing.
14
Table 7. Prior Knowledge About Getting a Mortgage and Concern About Qualifying, by Loan and Demographic Characteristics
Characteristics
Interest
Rates
Available
Prior Knowledge (Percent Not at All Familiar with Each Feature)
Mortgage
Process of Down Payment
Income
Credit
Types
Taking Out
to Qualify
Needed to
History or
Qualify
Score
Available
Mortgage
Money Needed
at Closing
Concerned About Qualifying
(Percentage Distribution)
Very
Somewhat
Not at All
Loan Type
Purchase 1
6.4
12.6
16.0
9.4
9.4
4.2
14.0
20.7
32.6
46.7
First-Time Homeowner2
12.7
23.7
35.6
18.1
18.9
8.3
27.5
24.4
39.3
36.3
Repeat Homeowner
5.0
10.1
11.3
7.6
6.9
3.2
10.9
21.6
31.6
46.8
Non-Occupant Owner
2.2
4.9
3.9
2.3
4.7
1.9
4.5
5.6
23.4
71.0
Refinance 1
1.3
5.8
2.8
7.4
5.7
2.0
7.3
11.7
27.9
60.4
Homeowner Cashout3
1.7
6.0
2.8
8.7
6.3
2.0
8.6
14.4
28.7
56.9
Homeowner Regular
1.1
5.9
2.9
6.8
5.5
2.0
6.9
11.0
27.5
61.5
Non-Occupant Owner
0.9
3.7
1.4
7.0
4.7
1.7
6.3
7.9
29.0
63.1
Loan Size
$50,000 or Less
6.8
13.8
9.5
11.5
10.4
5.4
13.7
17.5
33.8
48.7
$50,001 to $150,000
4.6
11.3
9.4
10.4
8.7
3.3
11.7
16.6
30.4
53.0
$150,001 to $300,000
2.6
7.3
7.2
7.4
6.6
2.7
8.6
15.3
28.3
56.3
More than $300,000
1.1
3.5
5.7
4.2
4.0
1.6
8.1
11.5
30.5
58.0
Credit Score 2
Lower than 620
5.2
20.8
15.8
19.2
11.2
8.3
21.9
41.7
36.0
22.3
620 to 679
5.3
10.2
10.0
10.9
8.7
4.4
12.3
27.0
41.0
32.1
680 to 719
5.9
11.1
10.9
11.1
9.9
3.1
12.6
21.1
36.7
42.2
720 or Higher
2.1
6.7
6.3
6.2
5.9
2.1
8.0
9.6
25.3
65.1
Respondent Age
35 Years or Younger
7.4
14.7
20.0
11.6
11.7
4.9
17.0
17.8
33.5
48.7
36 to 45
3.3
8.0
6.1
7.8
5.5
2.5
9.5
16.3
32.5
51.2
46 to 55
1.1
4.3
3.2
5.7
5.0
2.0
5.6
14.7
27.3
58.1
56 to 65
1.9
7.8
3.8
7.2
5.9
1.9
7.6
13.9
26.2
59.9
Older than 65
2.4
7.2
5.1
9.2
8.3
3.1
10.2
11.0
28.0
61.0
Race/Ethnicity
Non-Hispanic White
2.7
7.5
6.9
6.9
6.1
2.6
9.0
11.6
29.3
59.1
Hispanic and Non-White
4.8
11.0
10.5
11.5
9.7
3.4
12.3
24.8
30.8
44.3
Respondent Education
High School or Less
5.9
14.1
11.3
16.1
12.2
5.2
15.2
22.4
31.8
45.7
Some College
3.8
8.9
7.7
9.6
6.8
2.8
10.5
16.9
33.1
50.0
College Degree
3.5
8.3
8.3
7.5
7.4
3.1
9.4
13.9
30.7
55.4
Postgraduate
1.5
5.8
6.1
4.5
5.0
1.7
7.9
12.3
25.0
62.6
Household Income
Less than $50,000
7.4
16.9
15.5
17.2
13.6
5.8
18.5
26.5
39.3
34.2
$50,000 to $99,999
4.2
9.5
8.3
8.9
7.5
2.9
10.2
17.3
30.8
51.9
$100,000 to $174,999
1.0
4.9
4.7
4.7
4.6
1.7
6.9
10.4
27.3
62.4
$175,000 or More
0.7
3.0
4.4
2.7
3.6
1.7
5.2
6.4
21.2
72.4
Household Type
Couple
2.6
7.2
6.7
6.9
5.8
2.5
8.7
14.3
28.8
56.9
Single
5.5
12.9
12.1
12.8
11.9
4.1
14.2
18.4
33.0
48.6
All Respondents
3.3
8.4
7.9
8.2
7.1
2.8
9.9
15.2
29.7
55.1
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A homebuyer is classified as first-time if neither the
respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a cashout refinance.
15
One fifth of young borrowers 35 years old or younger indicated that they were not at all familiar
with the process of taking out a mortgage. Slightly more than 17 percent of households with less
than $50,000 in income indicated they were not at all familiar with the down payment required to
purchase a house or the amount of money needed at closing. For borrowers with credit scores
below 620, more than one-fifth reported that they were not at all familiar with the types of
mortgages available.
The percentage reporting they were not at all familiar with each of the facets of the mortgage
process generally declined as loan amount, education, credit score, and income increased. The
number of persons feeling unfamiliar with the process were also comparatively high among
Hispanic or non-white borrowers as well as for single-headed households.
These same patterns were true for the shares of borrowers that were concerned about qualifying
for a mortgage. For example, approximately 12 percent of non-Hispanic white borrowers
reported that they were very concerned with qualifying compared to nearly 25 percent of
Hispanic or non-white borrowers. The difference in borrowers concerned about qualifying for a
mortgage was starkest by credit score: 42 percent of those with scores below 620 were very
concerned about qualifying, whereas only 10 percent of borrowers with scores of at least 720
were reportedly very concerned.
A substantial proportion of borrowers that refinanced their mortgage or looked for investment
property had a firm idea about the type of mortgage they wanted (Table 8). The percentage of
borrowers who said they had a firm idea increased with age and credit score. Fourteen percent of
first-time buyers had little idea of what type of mortgage they wanted and slightly more than half
had some idea, while only 35 percent of first- time buyers had a firm idea of the mortgage they
wanted.
By the end of the process of getting their mortgage, greater than half of first-time buyers and
those that refinanced a mortgage felt they were somewhat able to explain the process of taking
out a mortgage and 40 percent felt they were very confident in their ability to explain the
mortgage process. For borrowers with $175,000 or more in income, nearly six out of 10 were
very confident in their ability to explain the process of taking out a mortgage, while fewer than
four out of 10 borrowers in the lowest income range (less than $50,000 in income), were very
confident in their ability to explain the process. Seven percent of households with incomes less
than $50,000 and nine percent of households in which the respondent had a high school
education or less were not at all confident about their ability to explain the process of taking out a
mortgage.
Slightly more than 40 percent of all respondents reported having a difficult time explaining the
difference between a prime and a subprime loan. This sizable share, however, might be expected
since there is not a single definition of a subprime loan. The share of borrowers that were not at
all confident in their ability to explain prime versus subprime loans exceeded 50 percent among
first-time buyers, borrowers 35 years old or younger, borrowers taking out loans of $50,000 or
16
Table 8. Knowledge About the Mortgage Borrower Wanted and the Mortgage Process, by Loan and Demographic Characteristics
Characteristics
Idea About the Mortgage Wanted
(Percentage Distribution)
Firm Idea
Some Idea
Little Idea
Ability to Explain Mortgage Process
(Percentage Distribution)
Very
Somewhat
Not at All
Mortgage Knowledge (Percent Not at All Able to Explain Each Feature)
Fixed Versus Prime Versus Interest Rate Amortization Consequence
Subprime
Versus
Adjustable
of
of
APR
Rate
Not Paying
Loan
Loan Type
Purchase 1
54.0
38.8
7.2
47.0
49.4
3.6
5.7
45.3
26.2
31.9
6.9
First-Time Homeowner2
34.9
51.0
14.0
40.5
56.4
3.0
7.8
57.7
31.4
44.7
9.8
Repeat Homeowner
57.8
36.4
5.8
47.3
48.8
3.9
5.5
43.4
25.7
29.8
6.3
Non-Occupant Owner
70.6
27.5
1.9
60.2
37.0
2.8
2.6
30.0
17.5
17.4
4.4
Refinance 1
72.0
25.3
2.7
46.7
49.3
4.1
3.7
37.9
23.6
24.2
6.2
Homeowner Cashout3
69.8
27.5
2.7
45.2
49.4
5.4
4.6
39.5
25.1
23.4
6.0
Homeowner Regular
72.9
24.4
2.7
45.7
50.8
3.6
3.5
38.2
23.8
25.7
6.4
Non-Occupant Owner
72.7
24.7
2.6
59.9
36.1
4.0
2.9
29.5
16.9
14.6
4.8
Loan Size
$50,000 or Less
60.5
31.6
7.9
36.8
56.2
7.0
10.4
51.3
35.1
43.2
10.1
$50,001 to $150,000
63.0
31.6
5.4
41.8
53.2
5.0
6.2
47.3
28.8
34.8
7.2
$150,001 to $300,000
65.3
30.3
4.4
49.1
47.6
3.4
3.7
39.0
22.7
23.3
6.1
More than $300,000
69.8
28.3
1.9
54.8
43.2
2.0
1.6
28.4
17.6
16.0
4.8
Credit Score 2
Lower than 620
52.3
40.6
7.2
37.0
56.5
6.4
5.8
50.1
36.3
41.6
9.4
620 to 679
55.1
37.0
7.9
42.6
51.9
5.4
7.2
47.6
28.5
34.8
8.6
680 to 719
60.5
33.7
5.7
42.9
52.2
4.8
6.8
42.6
28.4
33.4
6.8
720 or Higher
69.0
27.7
3.2
49.2
47.6
3.2
3.3
38.3
22.2
23.3
5.7
Respondent Age
35 Years or Younger
50.5
41.1
8.4
43.8
52.6
3.5
5.2
55.1
30.3
38.0
7.2
36 to 45
62.8
32.0
5.2
44.6
51.7
3.7
4.5
42.1
27.3
27.3
6.4
46 to 55
70.5
26.7
2.8
49.6
47.5
2.8
2.6
34.0
20.0
21.3
5.6
56 to 65
71.9
25.8
2.3
49.5
46.5
4.0
4.8
35.4
21.5
23.7
5.9
Older than 65
74.4
22.9
2.6
46.2
46.6
7.2
6.9
33.8
23.5
24.7
7.8
Race/Ethnicity
Non-Hispanic White
66.8
29.4
3.8
47.1
49.5
3.4
3.9
39.8
24.5
25.7
5.5
Hispanic and Non-White
60.2
33.5
6.2
46.0
48.9
5.1
6.1
43.2
24.9
31.2
8.9
Respondent Education
High School or Less
58.8
33.6
7.6
34.1
56.5
9.4
11.4
49.4
34.9
46.3
13.0
Some College
63.1
31.2
5.7
42.6
53.5
3.9
5.2
44.2
25.5
31.3
7.0
College Degree
64.5
31.4
4.1
49.0
47.8
3.2
3.4
40.3
24.2
24.4
5.3
Postgraduate
69.9
27.6
2.5
52.9
44.7
2.4
2.4
34.9
20.0
19.2
4.6
Household Income
Less than $50,000
54.8
36.3
8.9
36.9
54.5
8.7
9.7
55.3
36.6
45.6
10.4
$50,000 to $99,999
62.0
33.1
4.9
41.9
54.4
3.7
4.6
46.0
27.0
30.9
6.5
$100,000 to $174,999
70.0
27.1
2.9
51.6
45.7
2.7
3.1
34.7
20.5
20.1
5.6
$175,000 or More
74.5
24.3
1.2
60.7
38.0
1.3
1.0
23.1
13.1
11.0
3.6
Household Type
Couple
66.7
29.5
3.8
48.1
48.6
3.4
4.3
39.2
22.9
25.2
6.0
Single
59.2
33.9
6.9
42.4
51.9
5.8
5.2
46.2
30.6
34.3
7.9
All Respondents
65.0
30.5
4.5
46.8
49.3
3.9
4.5
40.8
24.6
27.2
6.4
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A homebuyer is classified as first-time if neither the
respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a cashout refinance.
17
less, borrowers with credit scores of less than 620, or borrowers with household income of less
than $50,000. Overall about one- quarter of borrowers reported that they could not explain
amortization or the difference between the interest rate and APR on a loan. The percentages that
reportedly were not able to explain these details of mortgages were generally highest among
borrowers with a high school diploma or less education, first-time buyers, those taking out loans
of $50,000 or less, those with credit scores below 620, those with household incomes below
$50,000, single households, and Hispanic or non-white borrowers.
5.0
Selecting a Mortgage
Selecting a mortgage requires the borrower to balance many features that affect the total cost of
owning a home. Table 9 shows that about two-thirds of respondents went directly to a lender for
their mortgage rather than to a mortgage broker. For the smallest loan size, $50,000 or less,
nearly 85 percent of borrowers went directly to the lender. Borrowers who obtained loans
greater than $300,000 and homeowners who were repeat buyers were relatively more likely than
other groups to use a broker, with more than 40 percent of borrowers in these groups reporting
they used a broker. Borrowers initiated contact with the lender or broker 69 percent of the time,
lenders initiated contact 16 percent, and a third party initiated contact for 15 percent of
respondents. The share of loans for which a third party initiated contact was more than double
(31 percent) for home purchase loans than for all respondents. Just13 percent of first-time
homebuyers and 4 percent of overall respondents used housing counselors or courses on home
ownership.
The survey asked the number of lenders a borrower seriously considered when selecting a
mortgage. Table 10 shows that more than half of all borrowers, 51 percent, considered applying
to only one lender. One-third, 34 percent, seriously considered two lenders and 15 percent
considered more than two lenders. The percentage of borrowers that considered just one lender
declined with their annual income, from nearly 60 percent for those with income of $50,000 or
less, to 44 percent for those with income of $175,000 or more. Nearly 52 percent of nonHispanic white borrowers seriously considered only one lender, while 47 percent non-white or
Hispanic borrowers did so.
When looking at actual mortgage applications, 81 percent of borrowers applied to just one
lender. First-time purchasers were the least likely to apply to just one lender at 68 percent. Not
quite one-quarter of first-time purchasers applied to two lenders compared with 15 percent for
borrowers as a whole. Borrowers aged 35 years old or younger, reported applying to two lenders
20 percent of the time. The overall rate of applicants who applied to three lenders was just three
percent and less than one percent reportedly applied to more than three lenders. The share of
non-Hispanic white borrowers who applied to only one lender was about five percentage points
higher than the share for non-white or Hispanic borrowers (82 percent and 78 percent,
respectively). While some consumers applied to multiple lenders to get better terms, others went
“shopping” because they got denied. It is difficult to know if younger borrowers, for example,
18
Table 9. Mortage Application Channel, First Contact, and Housing Counseling,
by Loan and Demographic Characteristics
Characteristics
Mortgage Application
(Percent Who Applied)
Directly
Through Broker
Contact Initiated by
(Percentage Distribution)
Borrower
Lender
Third Party
Housing Counseling
(Percent Who Received)
Loan Type
Purchase 1
58.9
39.9
63.4
5.7
30.9
6.7
First-Time Homeowner2
63.7
35.5
61.4
7.2
31.4
13.3
Repeat Homeowner
56.2
42.4
62.1
5.5
32.4
5.3
Non-Occupant Owner
68.0
32.0
78.2
3.8
18.1
1.2
Refinance 1
73.1
26.8
73.0
22.1
5.0
2.4
Homeowner Cashout3
70.2
29.8
77.9
16.7
5.4
3.7
Homeowner Regular
73.6
26.3
71.6
23.5
4.9
2.1
Non-Occupant Owner
80.0
20.0
66.5
29.1
4.4
0.5
Loan Size
$50,000 or Less
84.7
14.8
72.1
17.8
10.1
4.8
$50,001 to $150,000
73.1
26.6
68.4
17.5
14.2
5.1
$150,001 to $300,000
64.5
34.7
68.7
15.1
16.2
3.8
More than $300,000
59.2
40.5
71.9
12.8
15.4
2.4
Credit Score 2
Lower than 620
63.6
35.3
58.7
24.8
16.5
8.6
620 to 679
61.7
37.5
61.2
19.4
19.4
6.7
680 to 719
65.7
33.9
62.5
19.5
18.0
7.1
69.6
30.0
73.2
13.5
13.3
2.6
720 or Higher
Respondent Age
35 Years or Younger
62.0
37.2
67.0
7.8
25.2
7.7
36 to 45
65.0
34.6
69.2
15.8
14.9
4.1
46 to 55
67.9
31.8
72.0
17.5
10.4
2.9
56 to 65
72.7
26.8
69.2
19.5
11.3
2.6
Older than 65
74.9
24.8
67.8
20.6
11.6
2.3
Race/Ethnicity
Non-Hispanic White
69.0
30.7
71.4
14.9
13.7
3.1
Hispanic and Non-White
64.1
34.9
63.6
18.0
18.4
6.9
Respondent Education
High School or Less
69.1
30.4
65.2
21.0
13.9
6.3
Some College
68.1
31.4
65.6
17.8
16.6
5.5
College Degree
66.2
33.4
71.2
13.9
14.9
3.1
Postgraduate
68.4
31.1
71.6
14.0
14.4
3.3
Household Income
Less than $50,000
69.9
29.6
62.2
18.7
19.1
9.4
$50,000 to $99,999
68.6
30.9
68.2
16.9
14.9
4.3
$100,000 to $174,999
65.8
33.7
72.0
13.9
14.1
2.0
$175,000 or More
66.4
33.4
74.6
13.0
12.4
1.6
Household Type
Couple
67.4
32.1
70.3
15.1
14.6
3.5
Single
68.6
31.1
65.5
17.9
16.6
6.3
All Respondents
67.6
31.9
69.3
15.7
15.0
4.1
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to
850. A homebuyer is classified as first-time if neither the respondent nor the spouse is older than 54 years in age and there is no evidence of a prior
mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a
cashout refinance.
19
Table 10. Number of Lenders Considered and Applied to,
by Loan and Demographic Characteristics
Characteristics
Number of Lenders Seriously Considered
(Percentage Distribution)
1
2
3
4
5 or More
Number of Lenders Applied to
(Percentage Distribution)
2
3
4
5 or More
1
Loan Type
1
Purchase
46.3
38.4
12.9
1.5
0.9
75.1
19.8
4.2
0.6
0.3
First-Time Homeowner2
44.1
38.7
14.5
2.1
0.6
67.7
23.6
6.7
1.6
0.4
Repeat Homeowner
46.8
38.9
12.1
1.3
1.0
76.6
19.3
3.5
0.4
0.2
Non-Occupant Owner
48.2
34.2
15.0
1.6
1.0
82.0
13.9
3.7
0.0
0.5
Refinance 1
53.6
31.0
12.3
1.7
1.3
84.6
12.5
2.1
0.6
0.2
Homeowner Cashout3
52.3
33.0
11.5
1.9
1.4
84.1
13.2
1.8
0.6
0.3
Homeowner Regular
54.5
30.6
12.2
1.5
1.2
85.3
12.0
1.9
0.5
0.2
Non-Occupant Owner
50.8
27.8
16.4
2.4
2.6
80.7
13.6
4.2
1.5
0.0
Loan Size
$50,000 or Less
58.2
31.8
7.9
0.7
1.5
85.1
13.0
1.3
0.0
0.5
$50,001 to $150,000
56.9
29.4
11.4
1.3
1.0
82.3
13.9
3.1
0.6
0.2
$150,001 to $300,000
47.7
36.0
13.7
1.6
1.1
79.7
16.2
3.1
0.8
0.2
More than $300,000
42.6
39.8
13.5
2.4
1.6
80.0
16.9
2.3
0.4
0.4
Credit Score 2
Lower than 620
59.8
25.8
11.5
2.1
0.8
80.6
15.2
3.0
0.4
0.8
620 to 679
53.7
32.5
11.5
1.0
1.4
74.9
21.0
3.5
0.1
0.5
680 to 719
52.6
35.8
9.1
1.4
1.1
80.2
16.4
2.4
0.8
0.1
49.2
34.3
13.6
1.7
1.2
82.4
13.8
2.9
0.7
0.2
720 or Higher
Respondent Age
35 Years or Younger
47.4
35.9
14.0
1.6
1.2
74.2
20.3
4.2
1.0
0.2
36 to 45
48.6
37.1
12.3
1.1
1.0
79.8
16.5
2.8
0.6
0.2
46 to 55
49.7
34.0
13.2
1.6
1.6
83.1
13.8
2.4
0.5
0.2
56 to 65
53.6
31.1
11.5
2.4
1.4
84.2
12.8
2.2
0.5
0.3
Older than 65
59.5
27.9
10.8
1.4
0.3
86.1
10.4
2.8
0.5
0.2
Race/Ethnicity
Non-Hispanic White
52.4
32.7
12.4
1.4
1.2
82.2
14.7
2.5
0.6
0.2
Hispanic and Non-White
46.5
37.0
13.1
2.2
1.2
77.6
17.0
4.1
0.8
0.5
Respondent Education
High School or Less
63.9
27.7
5.9
1.7
0.8
82.4
15.2
1.5
0.6
0.4
Some College
54.4
32.3
11.3
1.0
1.0
81.8
14.6
2.9
0.6
0.1
College Degree
49.6
34.6
12.8
1.9
1.2
80.1
15.9
3.0
0.7
0.3
Postgraduate
43.8
37.0
16.1
1.7
1.4
80.6
15.2
3.3
0.6
0.2
Household Income
Less than $50,000
59.8
27.8
10.2
1.5
0.7
80.5
15.1
3.4
1.0
0.0
$50,000 to $99,999
51.4
33.9
11.9
1.5
1.3
80.4
15.7
3.0
0.5
0.4
$100,000 to $174,999
48.3
34.7
14.2
1.6
1.3
80.6
16.0
2.5
0.7
0.1
$175,000 or More
43.8
39.3
13.8
1.8
1.3
83.3
13.2
2.8
0.4
0.3
Household Type
Couple
49.5
34.7
12.9
1.7
1.2
81.0
15.6
2.6
0.6
0.3
Single
55.4
31.0
11.5
1.2
0.9
80.6
14.4
4.0
0.7
0.2
All Respondents
50.8
33.9
12.6
1.6
1.2
80.9
15.3
2.9
0.6
0.2
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to
850. A homebuyer is classified as first-time if neither the respondent nor the spouse is older than 54 years in age and there is no evidence of a prior
mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a
cashout refinance.
20
are savvier about shopping or just had to apply to more lenders before they found one to approve
them.
Borrowers were asked how important a variety of factors were in selecting a lender or broker.
Table 11 lists the responses to these questions. Borrowers indicated that the lender’s reputation,
the lenders’ location, and having an established banking relationship with a lender were
important considerations in choosing a lender or broker. In particular, the lender’s reputation
was very important to 40 percent and somewhat important to 27 percent of borrowers. Having a
local office or branch nearby was very important to 36 percent of borrowers and somewhat
important to 25 percent, and the banking relationship was very important to 46 percent of
borrowers and somewhat important to an additional 24 percent.
Borrowers also identified factors that were unimportant when selecting a lender. For example,
whether the lender spoke the borrower’s primary language (91 percent), was recommended by a
website (86 percent), or was a credit union (67 percent) were reported as not at all important by
borrowers. Home purchasers were nearly twice as likely (70 percent) as those who refinanced
(39 percent) to report that a lender used previously was unimportant, and purchasers were less
likely than those refinancing loans to say that an agent’s recommendation was unimportant (43
percent and 86 percent, respectively).
More than half of borrowers refinancing a mortgage reported that using a lender with an
established banking relationship was important (Table 12). More than three in 10 first-time
homebuyers and of borrowers aged 35 years or younger found recommendations from a friend,
relative, or co-worker important in selecting a lender or broker. Home purchasers were much
more likely than those refinancing an existing mortgage to report that recommendations from a
real estate agent or a home builder were important.
The NSMO asked how important a variety of mortgage terms or features were in the borrower’s
selecting a mortgage. A low interest rate was very important to 96 percent of borrowers and a
low Annual Percentage Rate (APR) was very important to 82 percent (Table 13). Low closing
fees were very important to 71 percent of borrowers and somewhat important for 24 percent
more. Only 50 percent overall reported that a low down payment was very important. However,
60 percent or more of first-time home buyers (60 percent), borrowers with income below
$50,000 (63 percent), borrowers with at most a high school education (67 percent), and
borrowers with low credit scores (68 percent) said a low down payment was very important in
choosing the mortgage (Table 14).
A low monthly payment was very important to 65 percent overall of borrowers. However, over
70 percent of borrowers with a high school education or less, and those with household income
below $50,000 as well as borrowers with credit scores below 620 reported that low monthly
payments were very important.
21
Table 11. Importance of Decision Factors in Choosing the Lender
(Percentage Distribution)
Importance of Factors
Somewhat
Factors
Very
All Mortgages
Established banking relationship
Local office
Used previously
Lender is a personal friend
Lender operates online
Lender is a credit union
Recommended by a friend/relative/co-worker
Recommended by an agent/home builder
Recommended by a website
Lender reputation
Spoke borrower's primary language (not English)
Purchases
Established banking relationship
Local office
Used previously
Lender is a personal friend
Lender operates online
Lender is a credit union
Recommended by a friend/relative/co-worker
Recommended by an agent/home builder
Recommended by a website
Lender reputation
Spoke borrower's primary language (not English)
Refinances
Established banking relationship
Local office
Used previously
Lender is a personal friend
Lender operates online
Lender is a credit union
Recommended by a friend/relative/co-worker
Recommended by an agent/home builder
Recommended by a website
Lender reputation
Spoke borrower's primary language (not English)
Source: National Survey of Mortgage Originations, 2013
Not at All
45.9
35.7
35.1
8.3
18.7
17.2
19.5
16.4
3.4
39.7
5.8
24.1
24.8
13.7
10.0
24.7
15.7
18.2
14.4
10.3
27.3
3.5
30.0
39.5
51.2
81.7
56.6
67.1
62.4
69.2
86.3
33.0
90.7
38.6
38.9
18.3
9.1
16.4
15.5
26.4
34.0
3.1
39.9
6.0
25.5
26.7
11.2
12.2
23.8
17.7
21.7
23.3
10.0
27.5
3.5
35.9
34.4
70.5
78.7
59.8
66.8
52.0
42.7
87.0
32.6
90.5
50.6
33.7
45.8
7.8
20.2
18.3
15.1
5.2
3.6
39.5
5.6
23.2
23.6
15.3
8.6
25.2
14.4
15.9
8.8
10.6
27.2
3.5
26.2
42.7
38.9
83.5
54.6
67.3
68.9
86.0
85.8
33.3
90.9
22
Table 12. Importance of Decision Factors in Choosing the Lender, by Loan and Demographic Characteristics
(Percentage Distribution)
Characteristics
Established Banking Relationship
Somewhat
Not at All
Very
Recommended by Friend/Relative/Co-worker
Very
Somewhat
Not at All
Recommended by Agent/Home Builder
Very
Somewhat
Not at All
Loan Type
Purchase 1
38.6
25.5
35.9
26.4
21.7
52.0
34.0
23.3
42.7
First-Time Homeowner2
37.7
26.8
35.5
34.8
25.6
39.6
36.4
22.5
41.1
Repeat Homeowner
38.0
25.3
36.6
25.3
20.7
54.1
35.4
23.4
41.2
Non-Occupant Owner
45.0
23.2
31.8
14.7
19.6
65.7
18.5
24.3
57.2
Refinance 1
50.6
23.2
26.2
15.1
15.9
68.9
5.2
8.8
86.0
Homeowner Cashout3
50.0
22.5
27.5
14.6
17.6
67.8
6.6
9.5
83.9
Homeowner Regular
50.8
23.2
26.0
16.0
15.7
68.3
4.6
8.8
86.6
Non-Occupant Owner
50.8
26.4
22.8
9.8
12.0
78.2
5.5
6.2
88.3
Loan Size
$50,000 or Less
58.6
21.2
20.2
11.5
11.6
76.9
10.0
9.6
80.5
$50,001 to $150,000
49.7
23.9
26.4
17.9
16.3
65.8
14.5
12.9
72.6
$150,001 to $300,000
42.8
24.7
32.5
20.1
19.4
60.5
18.5
15.1
66.3
More than $300,000
42.0
23.7
34.2
23.0
20.9
56.1
17.0
17.2
65.9
Credit Score 2
Lower than 620
44.1
22.2
33.7
20.3
12.8
66.8
14.9
9.6
75.5
620 to 679
39.9
26.3
33.8
19.7
19.2
61.2
23.9
14.9
61.2
680 to 719
44.8
27.1
28.1
21.5
18.7
59.8
19.1
14.6
66.3
720 or Higher
47.6
23.1
29.3
18.9
18.2
62.9
14.2
14.6
71.2
Respondent Age
35 Years or Younger
38.8
30.5
30.7
31.5
25.2
43.3
29.7
22.4
47.9
36 to 45
43.2
26.6
30.2
21.0
22.4
56.6
14.9
17.1
68.0
46 to 55
49.4
21.7
29.0
16.5
16.8
66.7
11.7
12.8
75.5
56 to 65
49.3
20.8
29.9
13.0
12.4
74.5
11.4
8.3
80.3
Older than 65
52.3
17.3
30.4
10.4
8.0
81.6
12.0
7.4
80.6
Race/Ethnicity
Non-Hispanic White
46.0
23.7
30.3
18.3
16.7
65.0
15.6
12.7
71.6
Hispanic and Non-White
45.7
25.1
29.2
22.7
22.0
55.3
18.4
18.9
62.7
Respondent Education
High School or Less
52.3
24.0
23.7
16.6
11.5
71.8
13.9
10.7
75.4
Some College
46.7
22.9
30.4
16.3
16.6
67.1
16.3
13.3
70.4
College Degree
44.2
25.5
30.3
22.5
20.2
57.3
16.6
15.5
67.9
Postgraduate
44.7
23.4
31.9
19.6
19.7
60.6
17.2
15.5
67.3
Household Income
Less than $50,000
49.4
23.7
26.9
19.8
17.0
63.2
18.7
14.9
66.4
$50,000 to $99,999
47.0
24.0
29.0
19.1
17.7
63.2
16.0
13.4
70.6
$100,000 to $174,999
42.9
24.8
32.3
19.5
18.4
62.1
16.4
14.7
68.9
$175,000 or More
45.1
23.6
31.3
20.0
20.2
59.8
14.7
15.8
69.4
Household Type
Couple
45.6
24.2
30.1
19.2
18.3
62.5
16.0
14.4
69.5
Single
47.0
23.6
29.4
20.3
17.8
61.9
17.5
14.4
68.1
All Respondents
45.9
24.1
30.0
19.5
18.2
62.4
16.4
14.4
69.2
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A homebuyer is classified as first-time if neither the
respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a cashout refinance.
23
Table 13. Importance of Decision Factors in Choosing the Mortgage
(Percentage Distribution)
Importance of Factors
Somewhat
Factors
Very
All Mortgages
Low interest rate
Low APR
Low closing fees
Low down payment
Low monthly payment
Fixed interest rate
Term less than 30 years
No mortgage insurance
Purchases
Low interest rate
Low APR
Low closing fees
Low down payment
Low monthly payment
Fixed interest rate
Term less than 30 years
No mortgage insurance
Refinances
Low interest rate
Low APR
Low closing fees
Low down payment
Low monthly payment
Fixed interest rate
Term less than 30 years
No mortgage insurance
Source: National Survey of Mortgage Originations, 2013
Not at All
95.6
82.1
70.6
49.8
65.1
87.4
34.6
40.3
3.9
11.6
24.2
22.9
24.5
7.8
24.1
23.9
0.5
6.3
5.2
27.3
10.4
4.7
41.4
35.8
92.7
78.5
63.0
47.7
59.4
85.2
21.8
34.0
6.4
14.7
30.4
28.6
29.1
10.1
27.3
26.8
0.9
6.7
6.7
23.7
11.5
4.8
50.8
39.1
97.4
84.3
75.4
51.1
68.7
88.8
42.6
44.2
2.3
9.6
20.4
19.3
21.6
6.4
22.0
22.1
0.3
6.1
4.2
29.5
9.7
4.7
35.4
33.7
24
Table 14. Importance of Decision Factors in Choosing the Mortgage, by Loan and Demographic Characteristics
(Percentage Distribution)
Characteristics
Very
Low Down Payment
Somewhat
Not at All
Very
Low Monthly Payment
Somewhat
Not at All
Very
No Mortgage Insurance
Somewhat
Not at All
Loan Type
Purchase 1
47.7
28.6
23.7
59.4
29.1
11.5
34.0
26.8
39.1
First-Time Homeowner2
59.9
25.6
14.6
65.8
27.1
7.0
28.5
28.1
43.4
Repeat Homeowner
46.3
28.1
25.7
59.4
28.2
12.4
34.4
26.8
38.8
Non-Occupant Owner
29.6
39.2
31.2
44.0
40.6
15.3
44.6
24.2
31.2
Refinance 1
51.1
19.3
29.5
68.7
21.6
9.7
44.2
22.1
33.7
Homeowner Cashout3
52.3
18.0
29.7
68.2
21.6
10.2
43.9
22.5
33.6
Homeowner Regular
51.1
19.8
29.0
69.3
21.3
9.4
43.9
21.8
34.3
Non-Occupant Owner
46.9
19.9
33.2
65.1
24.1
10.8
48.3
22.6
29.0
Loan Size
$50,000 or Less
54.7
20.7
24.6
69.7
17.5
12.8
36.5
20.8
42.7
$50,001 to $150,000
55.2
20.1
24.7
69.4
22.1
8.5
39.0
23.0
38.0
$150,001 to $300,000
50.6
23.9
25.4
64.9
25.5
9.6
41.2
26.2
32.6
More than $300,000
35.3
27.3
37.4
55.2
28.7
16.1
41.8
21.6
36.6
Credit Score 2
Lower than 620
68.4
14.5
17.2
78.2
15.1
6.8
32.5
22.2
45.3
620 to 679
67.3
17.1
15.6
75.6
18.2
6.2
33.6
28.3
38.2
680 to 719
61.7
21.3
17.0
72.3
20.7
7.0
35.2
25.2
39.6
720 or Higher
42.2
25.1
32.8
60.4
27.3
12.3
43.4
22.8
33.8
Respondent Age
35 Years or Younger
55.2
27.1
17.7
66.0
25.7
8.3
32.6
28.1
39.2
36 to 45
51.1
25.7
23.1
62.2
26.7
11.1
39.8
25.6
34.7
46 to 55
48.6
22.5
28.9
62.8
27.2
10.1
44.5
23.8
31.7
56 to 65
48.1
18.3
33.6
68.2
20.3
11.5
44.6
20.1
35.2
Older than 65
41.7
17.7
40.7
68.8
19.0
12.1
39.4
19.2
41.4
Race/Ethnicity
Non-Hispanic White
47.5
22.9
29.6
63.9
25.4
10.8
40.5
23.4
36.1
Hispanic and Non-White
56.0
23.0
21.0
68.3
22.2
9.5
39.6
25.4
35.0
Respondent Education
High School or Less
66.7
15.9
17.4
77.0
15.5
7.6
39.7
19.5
40.9
Some College
55.8
21.1
23.1
71.4
21.1
7.5
38.8
24.2
37.0
College Degree
48.9
23.1
28.0
63.4
25.6
10.9
40.6
24.9
34.5
Postgraduate
39.0
27.1
33.9
57.0
29.6
13.4
41.3
24.4
34.3
Household Income
Less than $50,000
63.1
17.9
19.0
78.4
16.2
5.4
32.7
24.0
43.2
$50,000 to $99,999
56.3
20.5
23.2
69.9
22.2
7.9
39.0
25.0
36.0
$100,000 to $174,999
43.5
27.1
29.4
60.1
28.3
11.6
44.3
24.2
31.5
$175,000 or More
30.9
26.6
42.6
47.8
32.2
20.0
44.5
20.7
34.8
Household Type
Couple
48.2
23.6
28.2
63.5
25.2
11.2
41.2
23.7
35.1
Single
55.6
20.5
23.9
70.5
21.9
7.6
37.2
24.6
38.2
All Respondents
49.8
22.9
27.3
65.1
24.5
10.4
40.3
23.9
35.8
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A homebuyer is classified as first-time if neither the
respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a cashout refinance.
25
6.0
During the Application Process
The NSMO found that many lenders requested that the borrower provide additional information
or perform additional steps after the initial loan application. Less than one-fifth of respondents
were asked to add another cosigner to the mortgage in order to qualify (Table 15). This
estimated percentage did not vary substantially across most demographic and loan-characteristic
groups, ranging from about 14 percent to 23 percent for most borrowers. An exception was
single households, who were much less likely to be asked to add a co-signer. For single
households, only three percent were asked to add a cosigner. By contrast, 23 percent of couples
were asked to add a co-signer, which might have included the spouse or partner when only one
party had applied for the mortgage.
Nearly 18 percent of borrowers reported being asked to resolve problems that appeared on a
credit report. The share of borrowers that fixed problems with their credit reports differed
sharply by credit score: about one third of borrowers with credit scores of 679 or lower addressed
an issue, compared with 11 percent of borrowers with scores 720 or greater. The share of
borrowers that resolved credit-report issues also declined with education, falling from about 22
percent among borrowers in high school or less and some college to 14 percent among those in
the postgraduate group.
Roughly one in five borrowers had to delay their closing date. Delays were somewhat more
common for purchase mortgages than for refinances. The fraction that reported the closing date
had been delayed ranged from 25 to 28 percent across the three groups of purchasers compared
with a range of 16 to 22 percent for borrowers in the refinance groups.
Delays in closing may have arisen from needing to answer follow-up questions, having to redo
paperwork, or needing an additional appraisal. Almost 60 percent of respondents reported
answering follow-up requests for more information, but only one-fifth reported having to redo
paperwork during the application process. The fraction of borrowers that redid paperwork was
fairly steady across groups defined by demographics and loan characteristics. In contrast, the
estimated fraction that answered follow-up questions varied more noticeably. Nearly two- thirds
of borrowers with loans of more than $300,000 had to answer follow-up requests, for example,
while just 53 percent of loans of less than $50,000 involved such requests. The percentage of
borrowers that responded to follow-up requests also rose with income and education, but the
percentage fell with credit score. Purchasers were also more likely to have answered follow-up
questions than those who refinanced.
Very few borrowers—just seven percent—reported needing multiple appraisals. The percentage
of borrowers that required multiple appraisals was somewhat higher for homebuyers with the
lowest credit score and for those with loans for more than $300,000.
26
Table 15. Additional Steps Taken in the Mortgage Process, by Loan and Demographic Characteristics
(Percent Who Took Each Step)
Characteristics
Had to Add
Co-Signer
to Qualify
Resolved
Credit Report
Issues
Answered
Follow-up
Requests
Had
Multiple
Appraisals
Redid
Paperwork
Due to Delays
Delayed
Closing
Date
Loan Type
Purchase 1
17.0
23.4
68.8
9.2
21.6
25.8
First-Time Homeowner2
20.6
24.5
69.3
9.8
23.0
28.4
Repeat Homeowner
16.2
24.9
68.8
9.2
21.4
24.7
Non-Occupant Owner
14.3
10.2
67.3
7.1
20.5
27.9
Refinance 1
19.2
14.3
53.2
5.3
19.1
17.2
Homeowner Cashout3
21.2
18.1
56.0
6.5
18.5
17.5
Homeowner Regular
18.9
13.1
50.9
4.7
19.0
16.4
Non-Occupant Owner
15.4
11.4
61.9
5.7
22.5
22.1
Loan Size
$50,000 or Less
19.7
14.9
52.7
3.9
19.4
19.1
$50,001 to $150,000
16.8
18.4
54.9
6.6
18.6
19.9
$150,001 to $300,000
19.5
18.7
60.9
6.3
20.7
19.7
More than $300,000
19.1
15.5
66.2
8.9
22.2
23.8
Credit Score 2
Lower than 620
18.1
37.2
63.0
9.3
17.7
22.4
620 to 679
17.6
32.7
60.5
6.4
22.4
26.5
680 to 719
19.1
26.7
61.5
8.0
20.5
21.7
18.4
11.4
58.2
6.4
19.7
18.8
720 or Higher
Respondent Age
35 Years or Younger
19.1
20.5
62.7
8.4
20.6
23.9
36 to 45
19.3
17.7
61.5
7.6
19.5
20.7
46 to 55
18.0
16.0
55.3
5.6
20.9
20.5
56 to 65
16.8
15.9
58.1
5.8
20.4
18.8
Older than 65
18.4
20.4
58.1
6.1
18.3
16.3
Race/Ethnicity
Non-Hispanic White
17.2
16.0
58.0
5.9
18.8
18.7
Hispanic and Non-White
21.4
22.7
62.5
9.2
23.7
25.3
Respondent Education
High School or Less
18.4
22.1
50.5
6.7
19.4
20.3
Some College
18.2
22.0
57.4
7.2
20.4
20.5
College Degree
18.2
16.8
59.8
5.8
20.1
19.8
Postgraduate
18.7
14.0
63.5
7.6
20.2
21.4
Household Income
Less than $50,000
14.3
22.3
57.4
8.7
21.3
21.8
$50,000 to $99,999
19.1
19.9
58.8
6.4
19.9
20.1
$100,000 to $174,999
20.8
15.2
59.4
6.1
19.3
19.5
$175,000 or More
16.7
12.9
61.8
6.9
20.8
22.0
Household Type
Couple
22.7
17.8
59.8
7.0
20.5
21.0
Single
3.2
18.0
57.2
6.1
18.8
18.7
All Respondents
18.4
17.8
59.2
6.8
20.1
20.5
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to
850. A homebuyer is classified as first-time if neither the respondent nor the spouse is older than 54 years in age and there is no evidence of a prior
mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a
cashout refinance.
27
7.0
Closing on a Mortgage
Closing on a mortgage is a complex process that involves substantial paperwork and a range of
costs and services associated with the loan. This section examines the NSMO questions about
the closing process, including locking the interest rate, the sources of information used by
borrowers about their closing, funding the closing costs, finding a settlement agent, title
insurance, and other features of the mortgage. Table 16 presents the response to these questions.
More than 90 percent of respondents indicated they were offered the option to lock in the
mortgage interest rate on the loans, but just 47 percent locked their rate when they applied for the
loan, 43 percent locked their rate between the application and closing date, and 10 percent waited
for the closing date to lock their interest rate.
More than 60 percent of borrowers reported seeking input on the closing from the lender or
broker. Twenty-four percent of all borrowers and more than 60 percent of first-time homebuyers
asked their real estate agent for input about their closing documents. Only 12 to 18 percent of
borrowers reportedly sought input from the settlement agent, an attorney, the title agent, or a
trusted friend, and less than one percent turned to a housing counselor for input on the mortgage
closing.
The survey asked the borrower to report who paid any of the closing costs. Because costs could
be funded through multiple sources, the shares do not add up to 100 percent. The borrower paid
at least some of the costs of closing the loan on 59 percent of loans (Table 17). In purchase
transactions, more than 80 percent of borrowers paid their own closing costs. The lender and
seller were less likely to have paid some or all of the closing costs (17 percent and 14 percent of
loans, respectively). Closing costs were added to the mortgage amount for 38 percent of loans.
Respondents were also asked about their search for a settlement agent and the features present in
the mortgage they obtained. Table 18 lists the responses to these questions. Two-thirds of
respondents indicated that the lender recommended the settlement agent. More than one-fifth of
borrowers overall indicated they selected an agent they had used previously, with slightly greater
shares for investors and those that refinanced. Twelve percent of borrowers shopped around for
a settlement agent to handle their closing.
Borrowers reported that nearly 80 percent of their mortgages included an escrow account for
taxes or homeowner insurance. Among mortgage features reported, only three percent of all
loans included a pre-payment penalty, and just two percent included a balloon payment feature.
About five percent of mortgages reportedly included credit life, debt suspension, or debt
cancelation insurance. These types of insurance were more common among first-time
homebuyers and borrowers with credit scores less than 620, incomes less than $50,000, or high
school or less education.
28
Table 16. Option and Timing of Interest Rate Lock and Sources of Input About Closing Documents, by Loan and Demographic Characteristics
Characteristics
Option to Lock
or Set Interest Rate
(Percent with Option)
Locked or Set Interest Rate
(Percentage Distribution)
At
Between Application
Around
Application
and Closing
Closing
Lender or
Broker
Sources of Input About Closing Documents
(Percentage Who Sought Input from Each Source)
Attorney Real Estate Settlement Title Agent
Trusted
Agent
Agent
Friend
Housing
Counselor
Loan Type
Purchase 1
91.6
36.3
51.1
12.6
69.2
19.7
54.5
19.5
17.3
26.3
1.3
First-Time Homeowner2
91.6
29.9
56.7
13.4
73.7
18.6
62.5
20.6
17.6
44.8
1.3
Repeat Homeowner
91.6
36.7
50.2
13.1
68.3
19.4
53.4
18.9
17.3
22.6
1.2
Non-Occupant Owner
92.1
48.5
45.1
6.4
65.3
24.9
44.1
20.7
15.7
9.7
1.7
Refinance 1
92.4
53.2
39.0
7.7
57.4
15.2
5.3
7.4
8.9
13.3
0.5
Homeowner Cashout3
90.7
50.9
40.5
8.6
54.3
15.0
7.3
7.5
9.5
12.9
0.8
Homeowner Regular
93.4
54.5
38.2
7.3
59.2
14.6
4.7
7.2
8.6
14.1
0.4
Non-Occupant Owner
90.3
50.7
40.6
8.7
53.1
21.0
3.4
8.1
9.1
8.1
0.5
Loan Size
$50,000 or Less
86.7
61.2
32.1
6.7
61.7
16.5
17.3
8.0
8.0
13.5
1.3
$50,001 to $150,000
90.6
49.2
40.2
10.6
60.2
15.0
23.1
10.8
12.0
18.7
1.3
$150,001 to $300,000
93.0
44.2
46.2
9.6
61.9
17.3
26.2
12.7
12.8
19.6
0.4
More than $300,000
94.4
43.9
48.0
8.0
66.0
20.6
24.6
14.2
11.7
15.9
0.3
Credit Score 2
Lower than 620
86.9
49.2
38.7
12.0
55.9
16.8
19.2
12.7
9.8
18.9
2.6
620 to 679
87.5
41.5
44.5
14.0
62.4
15.4
30.1
10.1
14.8
21.3
2.2
680 to 719
90.9
47.1
43.1
9.8
64.6
15.1
25.4
10.5
11.2
18.3
0.8
720 or Higher
93.7
47.6
44.0
8.5
61.7
17.7
23.2
12.8
11.9
17.7
0.4
Respondent Age
35 Years or Younger
92.5
36.5
51.1
12.4
69.5
16.3
46.8
16.8
15.6
40.8
1.4
36 to 45
92.0
44.7
45.3
9.9
60.9
15.6
23.6
12.6
11.6
18.1
0.7
46 to 55
92.3
47.6
43.6
8.8
59.4
17.0
15.7
10.2
11.1
10.6
0.4
56 to 65
91.3
52.6
39.3
8.1
59.7
18.4
15.7
9.6
11.4
9.5
0.8
Older than 65
92.4
58.6
33.5
7.9
59.1
18.6
16.0
10.0
9.8
6.9
0.5
Race/Ethnicity
Non-Hispanic White
93.1
47.6
43.4
8.9
61.8
16.4
22.7
12.4
11.5
18.3
0.5
Hispanic and Non-White
89.5
44.1
44.4
11.5
62.6
18.4
28.9
11.3
13.9
18.4
1.6
Respondent Education
High School or Less
87.8
52.3
34.9
12.8
58.3
12.6
20.1
9.1
12.2
14.5
1.7
Some College
90.6
47.4
42.4
10.3
58.7
14.9
22.5
9.9
12.1
16.0
1.0
College Degree
93.0
44.1
46.7
9.3
63.6
17.5
25.6
12.1
12.1
20.1
0.8
Postgraduate
94.1
46.9
44.9
8.2
64.2
19.8
26.3
15.1
12.2
19.7
0.2
Household Income
Less than $50,000
87.5
47.2
38.0
14.9
61.6
15.7
26.9
11.5
13.4
21.9
2.4
$50,000 to $99,999
92.2
47.0
43.6
9.4
62.6
15.9
25.6
10.4
12.6
19.8
0.8
$100,000 to $174,999
93.1
45.3
46.4
8.4
62.3
17.6
23.6
12.8
11.3
17.8
0.2
$175,000 or More
95.0
47.9
45.5
6.5
60.3
19.9
20.1
15.5
11.2
11.8
0.2
Household Type
Couple
92.5
46.8
43.6
9.6
61.5
17.2
23.7
12.1
12.2
17.1
0.8
Single
90.6
46.1
44.1
9.8
63.7
16.0
26.9
12.0
12.0
22.8
1.0
All Respondents
92.1
46.7
43.7
9.6
62.0
17.0
24.4
12.1
12.1
18.3
0.8
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A homebuyer is classified as first-time if neither the
respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a cashout refinance.
29
Table 17. Source of Funding for the Closing Costs, by Loan and Demographic Characteristics
(Percent Who Reported Each Source)
Characteristics
By
Borrower
Closing Costs Paid
By
By
Lender
Seller
By Adding to
Mortgage
Loan Type
Purchase 1
81.2
9.2
32.8
15.4
First-Time Homeowner2
80.1
9.4
42.7
16.3
Repeat Homeowner
80.6
9.6
31.9
15.1
Non-Occupant Owner
88.8
5.1
16.3
15.6
Refinance 1
44.9
21.7
1.5
51.6
Homeowner Cashout3
39.6
15.7
3.1
64.2
Homeowner Regular
46.9
24.7
0.9
45.8
Non-Occupant Owner
47.1
17.6
1.1
54.9
Loan Size
$50,000 or Less
49.9
20.7
9.0
37.0
$50,001 to $150,000
56.5
13.6
13.6
38.9
$150,001 to $300,000
59.5
17.3
16.3
38.7
More than $300,000
65.1
22.2
9.0
32.1
Credit Score 2
Lower than 620
40.1
19.7
13.1
38.5
620 to 679
52.1
17.3
21.3
42.0
680 to 719
52.8
16.2
16.8
41.8
63.1
16.7
11.3
35.6
720 or Higher
Respondent Age
35 Years or Younger
73.5
12.5
29.9
26.1
36 to 45
59.1
15.5
13.6
37.7
46 to 55
54.4
19.3
8.1
43.7
56 to 65
54.6
18.3
6.3
40.9
Older than 65
47.5
20.3
6.6
40.4
Race/Ethnicity
Non-Hispanic White
57.8
16.8
13.2
39.1
Hispanic and Non-White
62.1
16.9
14.9
33.4
Respondent Education
High School or Less
47.5
15.7
12.4
40.9
Some College
55.1
15.4
14.2
39.0
College Degree
61.1
16.6
14.4
37.8
Postgraduate
64.4
18.9
12.9
34.5
Household Income
Less than $50,000
53.1
15.4
16.5
39.2
$50,000 to $99,999
57.4
15.7
14.8
39.0
$100,000 to $174,999
60.9
17.6
13.0
37.3
$175,000 or More
65.7
19.7
8.9
32.6
Household Type
Couple
58.5
17.0
13.7
37.7
Single
60.8
16.4
13.6
36.9
All Respondents
59.0
16.8
13.7
37.5
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to
850. A homebuyer is classified as first-time if neither the respondent nor the spouse is older than 54 years in age and there is no evidence of a prior
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a
30
Table 18. Settlement Agent Selection and Mortgage Features, by Loan and Demographic Characteristics
Characteristics
Settlement Agent Selection
(Percent Who Used Each Method)
Shopped
Lender
Previous
Around
Recommended
Agent
Prepayment
Penalty
Mortgage Features
(Percent with Each Feature)
Escrow
Balloon
Interest-Only
Account
Payment
Payment
Credit/Debt
Insurance
Loan Type
Purchase 1
65.8
19.0
15.4
4.0
85.9
3.2
4.9
6.9
First-Time Homeowner2
67.8
9.5
18.1
5.6
90.9
2.8
6.5
9.5
Repeat Homeowner
66.4
19.8
14.8
3.4
85.8
2.7
4.5
6.8
Non-Occupant Owner
56.7
36.0
13.4
4.5
74.9
8.0
3.9
2.2
Refinance 1
66.8
23.4
10.6
2.3
75.4
1.6
3.8
3.1
Homeowner Cashout3
64.8
26.6
11.8
2.5
76.3
2.1
4.9
3.1
Homeowner Regular
67.5
22.2
10.0
2.1
74.8
1.2
3.4
3.4
Non-Occupant Owner
68.0
22.3
10.6
3.6
76.2
3.8
2.8
1.2
Loan Size
$50,000 or Less
59.1
21.1
12.9
4.6
60.0
6.4
5.9
5.5
$50,001 to $150,000
65.7
20.4
11.4
3.0
81.6
2.2
4.3
5.7
$150,001 to $300,000
67.0
22.0
13.2
2.5
84.1
1.8
3.6
4.7
More than $300,000
68.2
24.1
13.0
3.5
68.1
2.5
5.0
1.7
Credit Score 2
Lower than 620
72.7
15.1
13.8
2.8
87.8
1.2
4.5
11.2
620 to 679
68.0
19.8
11.5
3.2
89.7
1.9
5.4
7.5
680 to 719
66.6
21.1
12.8
3.1
86.6
2.9
5.6
5.9
720 or Higher
65.7
22.7
12.5
2.9
75.1
2.3
3.6
3.3
Respondent Age
35 Years or Younger
69.5
17.0
16.0
4.1
90.4
2.7
4.4
8.1
36 to 45
66.6
22.7
12.4
3.2
80.6
2.0
4.0
4.0
46 to 55
64.8
23.5
12.0
1.8
78.4
2.2
4.4
4.6
56 to 65
64.8
21.8
11.6
2.8
73.6
1.8
4.2
2.7
Older than 65
66.6
24.9
7.7
3.1
67.8
2.5
3.9
2.6
Race/Ethnicity
Non-Hispanic White
67.1
22.5
10.6
2.8
79.8
2.2
3.6
4.4
Hispanic and Non-White
64.8
19.5
17.3
3.5
78.5
2.3
5.8
5.2
Respondent Education
High School or Less
59.2
25.9
12.8
3.4
81.2
2.4
7.1
5.7
Some College
67.2
22.1
11.8
3.1
80.6
2.3
4.5
6.2
College Degree
66.0
21.7
13.0
3.0
80.4
1.9
3.4
4.6
Postgraduate
69.4
19.7
12.2
2.5
76.6
2.6
3.7
2.9
Household Income
Less than $50,000
63.8
20.0
12.3
4.2
83.6
2.2
6.8
8.5
$50,000 to $99,999
65.7
21.9
13.1
2.8
81.5
1.8
3.8
5.0
$100,000 to $174,999
67.0
20.3
13.0
2.6
79.7
2.1
3.2
3.3
$175,000 or More
69.9
25.7
10.0
2.7
69.5
3.6
4.3
1.9
Household Type
Couple
66.5
22.0
12.5
3.0
78.8
2.4
4.3
4.4
Single
66.3
20.6
12.2
3.0
81.6
1.7
3.8
5.4
All Respondents
66.4
21.7
12.4
3.0
79.5
2.2
4.2
4.6
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A homebuyer is classified as first-time if neither the
respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a cashout refinance.
31
8.0
Satisfaction with Mortgage Terms, Mortgage Process and Information
Table 19 presents mortgage borrowers’ satisfaction with the terms, interest rate, and closing costs
received on their most recent mortgages. Eighty percent indicated that they were very satisfied
with the general terms of their mortgage, and 18 percent more indicated that they were somewhat
satisfied. Only two percent of respondents indicated that they were not at all satisfied with their
mortgage terms. There was little variation in reported satisfaction across groups of borrowers.
Borrowers were slightly less satisfied with the interest rate received on their mortgage. More
than three-quarters of respondents indicated that they were very satisfied with their interest rate.
Overall, four percent of borrowers were not satisfied with their interest rate. Borrowers with
credit scores less than 620 (eight percent), those with household incomes of less than $50,000
(seven percent), and those with a high school education (eight percent) were more likely to report
being dissatisfied with their interest rate.
Respondents were notably less likely to report that they were very satisfied with closing costs
than they were with terms and interest rates. Approximately 58 percent were very satisfied and
33 percent were somewhat satisfied that they received the lowest closing costs. Nine percent
were not at all satisfied with their closing costs. Borrowers with household incomes of less than
$50,000 (13 percent), borrowers with a high school education or less (11 percent), Hispanic or
non-white borrowers (11 percent), and borrowers with small balance mortgages (11 percent)
were more likely to be dissatisfied with their closing costs.
Table 20 presents the overall satisfaction with the lender or broker used by the borrower, the
mortgage application process, and the loan closing process. More than 95 percent of all
respondents indicated that they were very or somewhat satisfied with the lender or broker they
used. Three out of four respondents were reportedly very satisfied with their lender; only four
percent were dissatisfied with their lender. There was generally little variation across borrower
groups, although borrowers with credit scores less than 620 or income of $50,000 or less were
more likely to be dissatisfied with their lender.
Overall, nearly 90 percent of respondents reported that they were very or somewhat satisfied
with the mortgage application process. Slightly more than 60 percent reported they were very
satisfied, and an additional 29 percent were somewhat satisfied. Nearly 8 percent were not at all
satisfied. There was little variation in the estimated shares of borrowers who reported they were
satisfied with the process. Investors who purchased a house or refinanced a mortgage (14 and 10
percent, respectively) and respondents in the highest income group (11 percent) were most likely
to be dissatisfied with the application process.
Similarly, all but eight percent of respondents reported that they were very or somewhat satisfied
with the mortgage closing process; 66 percent reported that they were very satisfied and 27
percent reported that they were somewhat satisfied. Among those borrowers who were more
likely to be dissatisfied with the closing process were investors who purchased a house (10
32
Table 19. Satisfaction that Mortgage Was the Loan with the Best Features, by Loan and Demographic Characteristics
(Percentage Distribution)
Characteristics
Terms
Somewhat
Not at All
33
Very
Interest Rate
Somewhat
Not at All
Very
Closing Costs
Somewhat
Not at All
Loan Type
1
Purchase
77.4
20.8
1.9
73.1
22.0
4.9
53.3
37.9
8.8
First-Time Homeowner2
77.4
22.0
0.6
70.6
25.3
4.1
56.4
35.6
7.9
Repeat Homeowner
77.5
20.2
2.3
74.8
20.2
5.0
53.9
37.0
9.1
Non-Occupant Owner
76.2
22.2
1.6
66.6
28.0
5.3
41.4
49.5
9.0
Refinance 1
81.6
16.6
1.8
78.1
18.1
3.8
61.6
30.0
8.4
Homeowner Cashout3
80.0
17.3
2.7
77.1
19.0
3.9
55.7
33.7
10.7
Homeowner Regular
83.1
15.7
1.1
79.5
17.0
3.4
64.9
28.2
6.9
Non-Occupant Owner
74.9
21.1
4.1
69.5
24.1
6.3
54.2
32.1
13.7
Loan Size
$50,000 or Less
83.7
13.8
2.5
78.2
16.3
5.5
66.5
23.0
10.5
$50,001 to $150,000
80.8
17.6
1.7
76.1
19.1
4.8
60.7
30.3
9.0
$150,001 to $300,000
77.8
20.2
2.0
75.3
20.9
3.9
58.7
33.9
7.4
More than $300,000
82.2
16.0
1.7
77.8
18.8
3.4
51.1
39.0
9.9
Credit Score 2
Lower than 620
75.0
22.3
2.7
73.9
18.6
7.5
64.5
25.5
10.0
620 to 679
74.0
22.2
3.8
73.5
21.5
5.0
60.1
29.1
10.8
680 to 719
78.7
19.4
1.9
76.5
20.1
3.4
62.6
29.4
8.0
720 or Higher
81.9
16.8
1.3
76.8
19.2
4.0
56.7
35.2
8.1
Respondent Age
35 Years or Younger
76.2
23.0
0.8
74.1
22.6
3.3
56.2
36.2
7.5
36 to 45
78.8
19.6
1.5
75.2
21.5
3.3
55.6
36.4
8.1
46 to 55
81.3
16.6
2.0
78.4
17.6
3.9
60.1
30.6
9.3
56 to 65
82.0
15.8
2.2
76.3
17.8
5.8
61.0
30.4
8.7
Older than 65
83.4
13.2
3.3
77.0
17.4
5.5
60.0
29.8
10.1
Race/Ethnicity
Non-Hispanic White
82.1
16.6
1.3
78.1
18.1
3.7
59.9
32.6
7.6
Hispanic and Non-White
74.3
22.3
3.4
70.9
23.7
5.4
54.3
34.4
11.3
Respondent Education
High School or Less
80.8
16.5
2.7
76.5
15.5
8.0
65.3
23.5
11.2
Some College
79.9
17.7
2.3
77.0
18.5
4.5
61.8
30.1
8.1
College Degree
79.3
19.2
1.5
75.6
21.3
3.1
57.7
34.0
8.3
Postgraduate
80.5
18.1
1.5
76.0
20.3
3.6
53.5
38.3
8.2
Household Income
Less than $50,000
76.3
19.8
3.9
74.5
19.0
6.5
58.6
28.7
12.7
$50,000 to $99,999
79.2
19.5
1.3
75.2
21.0
3.8
60.9
31.3
7.9
$100,000 to $174,999
81.1
17.2
1.7
77.4
19.5
3.1
57.1
35.8
7.2
$175,000 or More
84.0
15.0
1.0
78.2
17.4
4.4
54.4
37.2
8.4
Household Type
Couple
80.1
18.1
1.8
76.4
19.6
4.0
58.2
33.1
8.7
Single
79.6
18.5
1.9
75.4
19.8
4.8
58.9
32.9
8.2
All Respondents
80.0
18.2
1.8
76.2
19.6
4.2
58.4
33.1
8.6
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A homebuyer is classified as first-time if neither the
respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a cashout refinance.
Very
Table 20. Satisfaction with the Mortgage Process, by Loan and Demographic Characteristics
(Percentage Distribution)
Characteristics
Lender or Broker
Somewhat
Not at All
34
Very
Application
Somewhat
Not at All
Very
Closing
Somewhat
Not at All
Loan Type
1
Purchase
74.0
20.8
5.2
60.4
31.4
8.1
61.9
28.9
9.1
First-Time Homeowner2
72.5
23.2
4.4
61.3
31.6
7.1
60.4
29.9
9.7
Repeat Homeowner
74.7
19.8
5.5
60.3
31.9
7.7
62.6
28.6
8.8
Non-Occupant Owner
72.1
22.5
5.3
59.0
27.2
13.8
61.1
28.9
10.0
Refinance 1
75.7
20.6
3.7
64.3
28.0
7.6
68.0
24.9
7.1
Homeowner Cashout3
75.9
20.7
3.4
63.6
28.8
7.6
66.9
26.5
6.6
Homeowner Regular
76.6
19.6
3.8
64.8
27.8
7.4
68.8
24.2
7.0
Non-Occupant Owner
67.7
27.7
4.6
63.1
27.0
9.9
64.6
25.4
9.9
Loan Size
$50,000 or Less
80.9
14.2
4.9
68.0
25.4
6.6
71.8
23.2
5.0
$50,001 to $150,000
75.7
20.3
4.0
65.6
27.4
7.0
67.6
24.7
7.7
$150,001 to $300,000
74.4
21.0
4.6
62.8
29.5
7.8
65.1
27.0
7.9
More than $300,000
73.8
21.8
4.4
56.0
34.1
9.9
61.5
29.7
8.8
Credit Score 2
Lower than 620
72.7
21.2
6.1
65.6
27.8
6.7
69.5
22.4
8.1
620 to 679
74.4
19.7
6.0
64.6
25.3
10.1
67.3
23.2
9.5
680 to 719
78.2
18.1
3.7
67.0
26.8
6.2
68.7
24.7
6.5
720 or Higher
74.6
21.4
4.0
61.3
30.9
7.8
64.3
27.8
7.8
Respondent Age
35 Years or Younger
74.8
21.1
4.2
60.7
32.6
6.7
60.7
31.0
8.3
36 to 45
73.7
21.6
4.7
59.7
31.8
8.5
63.1
27.9
9.0
46 to 55
74.8
20.9
4.3
63.8
28.1
8.1
67.6
25.0
7.4
56 to 65
74.3
21.3
4.3
65.8
26.5
7.8
68.9
23.7
7.4
Older than 65
80.4
15.7
4.0
66.1
25.5
8.4
70.6
22.6
6.7
Race/Ethnicity
Non-Hispanic White
76.6
19.2
4.1
64.1
28.0
7.9
67.2
25.2
7.6
Hispanic and Non-White
70.7
24.4
4.8
59.4
33.0
7.6
61.5
29.8
8.7
Respondent Education
High School or Less
78.5
17.8
3.7
68.9
25.3
5.9
71.3
23.5
5.2
Some College
77.2
17.9
4.9
65.4
28.7
5.9
68.1
23.1
8.8
College Degree
73.5
22.5
4.0
62.5
29.2
8.3
64.3
27.4
8.3
Postgraduate
73.7
21.8
4.5
58.6
31.7
9.7
62.9
29.3
7.8
Household Income
Less than $50,000
74.5
19.8
5.7
62.8
30.0
7.2
63.3
27.9
8.8
$50,000 to $99,999
75.8
20.6
3.7
65.3
27.5
7.2
67.9
24.3
7.8
$100,000 to $174,999
75.2
20.5
4.3
62.0
30.5
7.4
65.2
27.1
7.8
$175,000 or More
73.5
22.1
4.4
58.4
30.9
10.7
63.6
28.9
7.5
Household Type
Couple
74.8
20.7
4.5
62.4
29.4
8.3
65.5
26.7
7.8
Single
75.7
20.6
3.8
64.5
29.2
6.3
66.1
25.7
8.2
All Respondents
75.0
20.6
4.3
62.8
29.3
7.8
65.6
26.5
7.9
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A homebuyer is classified as first-time if neither the
respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a cashout refinance.
Very
percent), borrowers with credit scores between 620 and 679 (10 percent), non-white borrowers
(10 percent), and borrowers who earn $50,000 or less per year (nine percent).
Table 21 presents the overall satisfaction of 2013 borrowers with the information in mortgage
disclosure documents, the timeliness of the mortgage disclosure documents, and their settlement
agent. The vast majority of respondents indicated they were very or somewhat satisfied with the
information (95 percent), timeliness of the mortgage disclosure process (92 percent), and with
their settlement agent (95 percent). Investors and borrowers in the lowest income and creditscore groups were somewhat more likely to report that they were not at all satisfied with the
disclosures, timeliness, or settlement agent, and borrowers older than 65 tended to be more likely
to report they were very satisfied with these aspects of the mortgage process
9.0
Opinions on Financial Responsibility
The survey asked borrowers whether they agreed or disagreed with statements about financial
responsibility. Table 22 presents the shares of borrowers who agreed with each of these
statements. For example, about 95 percent of respondents agreed that owning a home is a good
financial investment and the share that agreed exceeded 90 percent for all groups of borrowers.
In general, respondents believe that mortgage lenders treat borrowers well. Slightly more than
75 percent of respondents agreed that lenders treat borrowers well. The percentage of
respondents that reported they felt lenders treat borrowers well declined with education and loan
size. Seventy-eight percent of non-Hispanic white borrowers stated that they believe lenders treat
borrowers well, compared with 70 percent of Hispanics or non- whites.
Borrowers were also asked whether late payment of their mortgage would lower their credit
ratings. More than nine out of 10 respondents agreed that late payments would lower their credit
ratings. The estimated shares within groups varied little, ranging from 96 percent for investors
who purchased a property to 87 percent for respondents with at most a high school education. In
contrast, just 14 percent of respondents agreed with the statement that lenders should not care
about late payments, only whether loans are fully repaid. This share that reportedly agreed with
this statement differed widely across groups, from 10 percent for borrowers in the highest
income category to about 20 percent among those who borrowed $50,000 or less and about 21
percent for borrowers who had a credit score between 621 and 680. The shares decreased across
the loan size, education, and income categories but increased across age categories.
Respondents were far less likely to agree with the statement that it is okay to default or stop
paying if it is in the borrower’s financial interest. An estimated seven percent of respondents
agreed with this statement, with those older than 65 (five percent), non-Hispanic white
respondents (six percent), and those respondents with low balance mortgages (five percent) least
likely to agree with this statement. Hispanic or non-white borrowers (nine percent), investors
(eight percent), respondents with postgraduate degrees (nine percent), and borrowers with large
35
Table 21. Satisfaction with Information During the Mortgage Process, by Loan and Demographic Characteristics
(Percentage Distribution)
Characteristics
Disclosures
Somewhat
Not at All
36
Very
Timeliness
Somewhat
Not at All
Very
Settlement Agent
Somewhat
Not at All
Loan Type
1
Purchase
60.8
33.9
5.3
61.0
31.2
7.8
67.7
26.8
5.6
First-Time Homeowner2
59.1
35.4
5.6
59.3
32.3
8.4
62.9
29.9
7.1
Repeat Homeowner
61.2
33.7
5.1
61.4
31.0
7.5
68.9
26.2
4.9
Non-Occupant Owner
62.4
31.4
6.2
61.8
29.9
8.3
69.9
23.2
6.9
Refinance 1
64.7
30.4
4.9
64.5
27.9
7.6
69.2
25.8
5.0
Homeowner Cashout3
66.1
29.7
4.2
65.1
28.9
6.0
71.4
24.7
4.0
Homeowner Regular
64.9
30.2
4.8
64.5
27.6
7.9
68.7
26.0
5.2
Non-Occupant Owner
58.0
34.2
7.9
61.8
27.5
10.8
65.5
28.3
6.2
Loan Size
$50,000 or Less
69.6
27.4
3.0
66.0
24.8
9.2
68.3
25.0
6.7
$50,001 to $150,000
65.5
29.5
5.1
64.0
28.4
7.6
70.6
24.1
5.2
$150,001 to $300,000
63.2
32.1
4.7
63.5
29.1
7.4
68.6
26.3
5.1
More than $300,000
57.1
36.7
6.2
59.8
32.1
8.1
64.2
30.8
5.0
Credit Score 2
Lower than 620
64.9
26.0
9.0
66.8
23.2
10.0
69.2
24.9
5.9
620 to 679
65.0
29.9
5.1
63.3
28.1
8.6
70.5
23.4
6.1
680 to 719
67.4
28.8
3.8
63.6
30.2
6.2
72.1
23.5
4.4
720 or Higher
61.8
33.1
5.1
62.7
29.6
7.6
67.4
27.5
5.1
Respondent Age
35 Years or Younger
58.3
37.0
4.7
59.1
33.3
7.6
64.6
31.1
4.3
36 to 45
60.3
33.7
6.0
61.0
31.2
7.8
66.7
27.5
5.8
46 to 55
63.9
30.9
5.2
64.0
27.5
8.5
69.2
25.2
5.6
56 to 65
66.9
28.6
4.5
65.9
26.9
7.1
71.1
24.6
4.3
Older than 65
71.1
24.3
4.5
68.9
24.4
6.7
74.9
18.7
6.4
Race/Ethnicity
Non-Hispanic White
65.0
30.2
4.8
65.0
27.4
7.6
71.4
23.6
5.0
Hispanic and Non-White
58.4
35.9
5.7
58.2
34.0
7.8
61.2
33.1
5.7
Respondent Education
High School or Less
68.2
27.2
4.6
67.0
26.0
7.0
73.7
21.3
5.0
Some College
68.3
27.5
4.2
64.5
28.0
7.4
69.8
24.2
6.0
College Degree
61.9
32.8
5.3
62.0
30.1
7.8
67.4
27.1
5.5
Postgraduate
58.6
35.8
5.6
61.7
30.4
7.9
67.0
28.7
4.3
Household Income
Less than $50,000
63.2
29.3
7.4
61.6
29.0
9.4
67.1
25.8
7.2
$50,000 to $99,999
65.4
30.8
3.8
64.5
28.7
6.8
70.8
24.9
4.3
$100,000 to $174,999
62.0
33.4
4.6
62.7
29.6
7.7
66.8
28.1
5.1
$175,000 or More
60.1
33.6
6.3
62.2
30.0
7.8
68.4
26.4
5.3
Household Type
Couple
62.8
32.3
4.9
63.1
29.2
7.8
68.9
26.1
5.0
Single
64.8
29.6
5.6
63.3
29.3
7.3
67.7
26.4
5.9
All Respondents
63.2
31.7
5.1
63.1
29.2
7.7
68.6
26.2
5.2
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A homebuyer is classified as first-time if neither the
respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a cashout refinance.
Very
Table 22. Opinions on Homeownership, Lenders, and Mortgage Payments, by Loan and Demographic Characteristics
(Percent Who Agreed with Each Statement)
Characteristics
Owning a Home
Is a Good Financial
Investment
Mortgage Lenders
Generally Treat
Borrowers Well
Late Payments
Will Lower
Credit Rating
Lenders Should Not Care
About Late Payments,
Only Whether Loans Fully Repaid
It Is Okay to Default
If It Is in the Borrower's
Financial Interest
Loan Type
Purchase 1
95.3
78.7
92.4
13.3
6.9
First-Time Homeowner2
94.4
78.6
90.8
11.4
7.9
Repeat Homeowner
95.5
79.3
92.4
14.1
6.4
Non-Occupant Owner
95.9
74.8
96.2
12.4
7.9
Refinance 1
94.3
74.3
91.8
13.8
7.1
Homeowner Cashout3
95.1
75.2
89.6
15.6
5.9
Homeowner Regular
93.9
74.1
92.5
13.0
7.6
Non-Occupant Owner
94.0
72.6
93.3
14.2
7.0
Loan Size
$50,000 or Less
97.0
84.0
90.4
20.4
4.7
$50,001 to $150,000
94.5
79.3
91.1
13.9
5.9
$150,001 to $300,000
94.8
73.6
91.9
13.8
7.6
More than $300,000
94.2
72.4
94.7
11.5
8.5
Credit Score 2
Lower than 620
97.6
71.0
89.7
17.5
8.9
620 to 679
94.6
76.5
91.4
20.7
5.4
680 to 719
94.7
75.1
90.4
15.5
6.6
720 or Higher
94.5
76.4
92.7
11.4
7.3
Respondent Age
35 Years or Younger
94.2
77.9
93.4
10.4
8.0
36 to 45
93.9
74.3
94.0
13.1
8.9
46 to 55
95.1
76.5
90.0
14.1
6.0
56 to 65
94.8
74.4
91.6
16.2
5.6
Older than 65
95.8
77.5
90.4
15.5
5.4
Race/Ethnicity
Non-Hispanic White
94.3
78.1
92.6
11.8
6.3
Hispanic and Non-White
95.5
70.4
90.5
18.5
8.9
Respondent Education
High School or Less
96.2
80.2
86.9
19.2
6.9
Some College
95.4
79.2
90.5
16.6
5.5
College Degree
94.2
77.5
92.7
12.4
6.7
Postgraduate
93.9
69.8
94.5
10.4
8.7
Household Income
Less than $50,000
94.3
76.1
89.5
19.0
7.2
$50,000 to $99,999
94.8
77.8
90.9
14.7
6.0
$100,000 to $174,999
95.1
74.6
94.4
11.0
7.6
$175,000 or More
93.8
74.0
93.2
9.9
8.0
Household Type
Couple
94.9
76.2
92.6
12.6
7.0
Single
93.6
75.3
89.9
17.3
6.9
All Respondents
94.6
76.0
92.0
13.6
7.0
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A homebuyer is classified as first-time if neither the
respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a cashout refinance.
37
balance mortgages (nine percent) were more likely to agree that it is okay to default when it is in
the borrower’s financial interest.
10.0
Recent Changes in Neighborhood Housing
Tables 23 and 24 present respondents’ opinions on changes to the neighborhoods where homes
were located for which they had most recently acquired a mortgage. New borrowers in 2013
were asked if the number of homes in the neighborhood for sale, for rent, that were vacant, and
that were foreclosed/sold as a short sale had significantly increased, experienced little or no
change, or had significantly decreased over the last couple of years. They were also asked their
opinion on changes to house prices and the overall desirability of living in the neighborhood.
Two out of three indicated that the number of homes available for sale in their neighborhood
experienced little or no change, while slightly more than a quarter reported that the number for
sale had increased significantly. Less than six percent of respondents reported the number of
homes for sale declined significantly in their neighborhood. There was little variation across
borrower groups, for either significant increase or significant decrease. Borrowers with large
loans (nine percent) and borrowers with high incomes (eight percent) reported a decrease in
available homes for sale, slightly more than what other borrowers reported.
Different borrower groups varied sharply in their descriptions of changes in the number of vacant
homes in the neighborhood and clearly described distinctly different neighborhoods. Overall,
one out of eight respondents indicated that the number of vacant homes increased significantly,
nearly 80 percent indicated that there was little or no change, and almost eight percent reported
that the number of vacant homes had declined significantly. Borrowers with a high school
education or less (17 percent), borrowers with lower household income (17 percent), borrowers
with very low to moderately low credit scores (15 percent), and respondents with mortgages less
than $50,000 (22 percent) reported a significant increase in vacant homes in their neighborhood
over the last two years. By contrast, respondents with very high income (seven percent) and
borrowers with larger mortgages (six percent) were less likely to report a significant increase in
vacant homes.
Different borrower groups also varied in their responses about the changes in the number of
houses for rent in their neighborhood. Overall, slightly more than 12 percent of respondents
reported a significant increase in rental housing, slightly more than 80 percent of borrowers
reported little or no change, and only five percent reported a significant decrease in the number
of rental homes. Borrowers who took out a smaller mortgage (18 percent), or who had very low
credit scores (17 percent), respondents with a high school education or less (15 percent), and low
income borrowers (16 percent) were more likely to report a significant increase in the number of
rental properties in their neighborhoods than were other borrowers.
Nearly three-quarters of respondents indicated that the number of foreclosures and short sales in
their neighborhood had little or no change over the last couple of years (Table 24). Fifteen
38
Table 23. Changes in Housing Availability in Neighborhood over Last Couple Years, by Loan and Demographic Characteristics
(Percentage Distribution)
Characteristics
Number of Homes for Sale
Significantly
Little or No
Significantly
Increase
Change
Decrease
Number of Vacant Homes
Significantly
Little or No
Significantly
Increase
Change
Decrease
Number of Homes for Rent
Significantly
Little or No
Significantly
Increase
Change
Decrease
Loan Type
Purchase 1
26.4
68.5
5.1
10.6
80.5
8.9
11.1
83.0
5.9
First-Time Homeowner2
25.7
69.7
4.7
8.1
85.1
6.8
8.5
85.6
5.9
Repeat Homeowner
27.1
67.8
5.1
11.4
79.1
9.5
11.6
82.0
6.4
Non-Occupant Owner
23.6
70.4
5.9
10.3
80.5
9.2
13.2
83.9
2.9
Refinance 1
27.3
66.6
6.1
13.8
79.1
7.1
13.0
81.9
5.1
Homeowner Cashout3
28.4
65.3
6.4
14.5
79.1
6.4
13.6
80.9
5.5
Homeowner Regular
27.2
67.0
5.8
13.6
78.9
7.5
12.9
81.9
5.2
Non-Occupant Owner
23.6
68.9
7.5
13.5
80.2
6.3
12.1
85.3
2.6
Loan Size
$50,000 or Less
25.9
71.9
2.2
22.1
74.3
3.5
18.2
78.5
3.3
$50,001 to $150,000
26.3
69.4
4.3
15.8
78.3
5.9
13.7
81.2
5.1
$150,001 to $300,000
28.7
65.2
6.1
11.7
80.2
8.1
12.4
82.3
5.3
More than $300,000
24.8
66.5
8.8
5.6
82.3
12.1
7.9
85.4
6.7
Credit Score 2
Lower than 620
26.3
67.8
5.9
15.5
77.1
7.4
16.9
75.1
8.0
620 to 679
27.7
66.7
5.6
15.3
76.7
8.0
13.9
79.0
7.1
680 to 719
28.5
65.2
6.3
14.5
78.1
7.4
14.1
79.7
6.2
720 or Higher
26.5
67.9
5.6
11.3
80.8
7.9
11.2
84.1
4.7
Respondent Age
35 Years or Younger
27.8
66.8
5.4
10.8
80.9
8.3
11.9
83.3
4.8
36 to 45
28.4
65.2
6.4
11.2
79.9
8.9
12.7
82.5
4.8
46 to 55
26.3
67.8
5.9
13.2
79.1
7.7
11.9
82.1
6.0
56 to 65
25.9
68.5
5.6
15.5
78.3
6.1
13.2
81.6
5.2
Older than 65
25.4
69.8
4.8
12.1
80.1
7.8
11.5
81.7
6.8
Race/Ethnicity
Non-Hispanic White
25.5
69.3
5.2
12.5
80.7
6.8
11.1
83.9
5.1
Hispanic and Non-White
30.8
62.1
7.1
12.6
76.9
10.5
15.5
78.2
6.3
Respondent Education
High School or Less
26.9
67.6
5.5
16.5
76.2
7.2
15.1
76.8
8.1
Some College
27.0
68.3
4.7
15.0
77.8
7.2
14.8
79.8
5.4
College Degree
27.7
66.5
5.7
11.6
79.8
8.7
11.8
83.2
4.9
Postgraduate
25.9
67.4
6.6
10.1
82.4
7.5
9.6
85.5
4.8
Household Income
Less than $50,000
27.8
67.1
5.1
17.2
76.0
6.8
15.6
77.5
6.9
$50,000 to $99,999
26.9
68.5
4.6
14.1
79.3
6.6
14.4
81.0
4.6
$100,000 to $174,999
28.4
65.2
6.4
10.9
79.7
9.4
10.2
84.9
4.9
$175,000 or More
23.4
68.6
8.0
6.7
84.4
8.9
7.4
86.1
6.5
Household Type
Couple
26.7
67.7
5.6
11.8
80.4
7.8
11.6
83.4
5.1
Single
27.7
66.1
6.2
15.1
77.0
7.9
14.8
78.6
6.6
All Respondents
26.9
67.3
5.7
12.6
79.6
7.8
12.3
82.3
5.4
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A homebuyer is classified as first-time if neither the
respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a cashout refinance.
39
Table 24. Changes in Neighborhood Desireability over Last Couple Years, by Loan and Demographic Characteristics
(Percentage Distribution)
Characteristics
Number of Foreclosures or Short Sales
Significantly
Little or No
Significantly
Increase
Change
Decrease
Significantly
Increase
House Prices
Little or No
Change
Significantly
Decrease
Overall Desireablity of Living There
Significantly
Little or No
Significantly
Increase
Change
Decrease
Loan Type
Purchase 1
12.5
77.4
10.1
28.7
62.9
8.3
23.3
72.9
3.7
First-Time Homeowner2
10.9
79.1
10.0
26.6
68.9
4.5
22.7
74.1
3.2
Repeat Homeowner
12.8
76.6
10.7
29.3
61.1
9.6
24.1
71.8
4.1
Non-Occupant Owner
14.1
80.0
6.0
29.3
62.1
8.6
19.2
78.4
2.5
Refinance 1
16.8
74.0
9.2
25.3
54.1
20.6
19.0
75.5
5.5
Homeowner Cashout3
17.3
73.9
8.8
27.3
54.7
18.0
20.5
74.2
5.2
Homeowner Regular
16.2
74.3
9.5
24.3
54.5
21.2
18.6
76.1
5.3
Non-Occupant Owner
20.3
72.1
7.6
26.9
48.1
25.1
16.9
75.2
7.9
Loan Size
$50,000 or Less
21.0
72.8
6.1
17.5
64.1
18.3
15.1
78.7
6.3
$50,001 to $150,000
17.8
74.8
7.4
18.4
63.0
18.7
15.0
77.8
7.2
$150,001 to $300,000
14.2
76.2
9.6
28.2
56.2
15.5
22.0
74.7
3.3
More than $300,000
10.1
75.1
14.8
42.9
47.0
10.1
31.2
66.3
2.5
Credit Score 2
Lower than 620
17.6
72.8
9.6
22.7
61.0
16.3
19.0
72.7
8.3
620 to 679
16.6
74.0
9.4
24.4
59.3
16.3
19.6
73.9
6.5
680 to 719
16.7
74.1
9.2
24.9
58.1
17.0
22.0
73.2
4.8
720 or Higher
14.3
76.1
9.6
27.7
56.8
15.5
20.7
75.1
4.2
Respondent Age
35 Years or Younger
12.5
77.9
9.6
28.1
63.0
8.9
22.9
72.4
4.8
36 to 45
14.2
74.2
11.6
32.3
52.9
14.7
24.6
70.1
5.3
46 to 55
17.3
73.5
9.2
24.1
57.7
18.1
18.1
77.0
4.9
56 to 65
16.4
75.4
8.2
23.6
56.3
20.1
17.9
77.5
4.6
Older than 65
15.1
76.6
8.3
22.4
58.0
19.6
18.6
77.3
4.1
Race/Ethnicity
Non-Hispanic White
15.5
76.5
8.0
24.0
59.1
16.9
19.0
76.6
4.4
Hispanic and Non-White
14.1
72.2
13.7
33.7
53.2
13.1
25.0
69.0
5.9
Respondent Education
High School or Less
19.0
71.7
9.4
19.9
60.7
19.4
13.0
78.7
8.2
Some College
17.4
73.7
8.8
23.7
58.4
18.0
19.8
75.0
5.2
College Degree
15.0
74.9
10.1
27.4
57.3
15.3
21.8
73.1
5.1
Postgraduate
11.7
78.7
9.6
30.8
55.8
13.4
23.1
74.2
2.7
Household Income
Less than $50,000
18.1
74.2
7.8
19.9
61.9
18.2
16.7
75.3
8.0
$50,000 to $99,999
16.9
74.0
9.1
22.9
59.9
17.2
18.4
76.2
5.5
$100,000 to $174,999
13.6
76.9
9.5
29.7
55.1
15.2
23.8
73.2
3.0
$175,000 or More
10.4
77.0
12.6
37.3
51.2
11.5
24.9
72.1
3.0
Household Type
Couple
14.4
76.2
9.4
27.4
57.1
15.5
20.5
75.2
4.2
Single
17.8
72.3
9.9
23.8
59.1
17.1
21.2
72.0
6.8
All Respondents
15.1
75.3
9.5
26.6
57.5
15.9
20.7
74.5
4.8
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to 850. A homebuyer is classified as first-time if neither the
respondent nor the spouse is older than 54 years in age and there is no evidence of a prior mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a cashout refinance.
40
percent of respondents reported a significant increase and 10 percent reported a significant
decrease. Borrowers who took out small mortgages (21 percent), had low credit scores (18
percent), and have a high school education or less (19 percent) reported a larger increase in the
number of foreclosures.
Fifty-eight percent of respondents reported that there was little or no change to house prices in
their neighborhood over the last couple of years, while 27 percent reported a significant increase
in prices and 16 percent of respondents reported significant decline in house prices in their
neighborhood. However, respondents who took out large mortgages (43 percent), high income
borrowers (37 percent), and borrowers with postgraduate degrees (31 percent) were far more
likely to report a significant increase in house price over the last couple years than were other
respondents. Individuals, who purchased a home, including investors and first-time buyers, were
far less likely to report a significant decline in house price (eight percent) than were respondents
who refinanced a mortgage (21 percent).
Borrowers were asked if the overall desirability of living in their neighborhood had changed over
the last couple of years. Nearly three out of four indicated that there had been little or no change
in desirability, 21 percent reported a significant increase in desirability and only five percent
reported a significant decline. There was little to no variation across borrower groups.
11.0
Expectations on Neighborhood House Prices and Neighborhood Desirability
Respondents were asked what they think will happen to prices of homes in their neighborhood
over the next couple of years. Nearly 77 percent of all respondents expect house prices to
increase, with 62 percent expecting that prices will increase a little and 15 percent expecting that
prices will increase a lot (Table 25). Nearly 19 percent of respondents indicated that prices
would remain about the same over the next couple of years and just four percent of respondents
expect prices to decrease. The percentage of borrowers who reportedly expect price increases
generally rose with loan size and borrower income, and both the share expecting home prices to
remain about the same and the share expecting price declines decreased with loan size and
income. There was generally little variation across other groups of borrowers in expectations on
neighborhood house prices.
Borrowers were also asked whether they expect the overall desirability of living in their
neighborhood to change in the next couple of years (Table 26). About 74 percent of respondents
indicated that they expected overall desirability of their neighborhood to stay about the same, 23
percent of respondents expected neighborhood desirability to increase, and 3 percent of
respondents expected neighborhood desirability to decrease. Borrowers with loans for less than
$150,000, borrowers with credit scores of 679 or less, borrowers with at most a high school
education, and borrowers with household income of less than $50,000 were more likely than
other groups of borrowers to expect that neighborhood desirability would decrease.
41
Table 25. Expectations for House Prices in Neighborhood over Next Couple of Years,
by Loan and Demographic Characteristics
(Percentage Distribution)
Prices of Similar Homes in Neighborhood Will
Increase
Remain About
Decrease
a Little
the Same
a Little
Characteristics
Increase
a Lot
Decrease
a Lot
Loan Type
Purchase 1
18.1
62.4
16.7
2.3
0.5
First-Time Homeowner2
21.7
55.0
21.0
2.1
0.3
Repeat Homeowner
17.1
64.1
15.7
2.4
0.7
Non-Occupant Owner
17.3
66.5
14.1
2.1
0.0
Refinance 1
12.7
62.0
20.6
3.5
1.2
Homeowner Cashout3
14.3
60.5
20.7
3.3
1.2
Homeowner Regular
11.7
62.1
21.3
3.7
1.2
Non-Occupant Owner
15.5
66.4
13.6
3.4
1.1
Loan Size
$50,000 or Less
10.0
51.9
32.2
5.4
0.4
$50,001 to $150,000
10.2
59.0
24.6
4.6
1.5
$150,001 to $300,000
16.4
65.3
15.4
2.2
0.7
More than $300,000
22.2
64.0
12.4
1.0
0.5
Credit Score 2
Lower than 620
18.5
48.4
28.0
3.5
1.6
620 to 679
16.1
56.9
21.7
3.7
1.5
680 to 719
17.8
58.6
18.9
3.3
1.4
720 or Higher
13.6
64.9
18.0
2.8
0.7
Respondent Age
35 Years or Younger
16.2
61.9
18.8
2.3
0.7
36 to 45
15.5
61.3
19.0
3.1
1.1
46 to 55
14.3
62.1
19.2
3.8
0.6
56 to 65
13.4
63.1
18.7
3.2
1.5
Older than 65
14.1
62.6
20.2
2.3
0.8
Race/Ethnicity
Non-Hispanic White
12.9
63.5
19.9
3.0
0.7
Hispanic and Non-White
19.8
58.6
16.8
3.3
1.6
Respondent Education
High School or Less
13.4
53.5
26.0
5.7
1.3
Some College
15.0
59.0
21.2
3.5
1.3
College Degree
15.6
63.1
17.6
2.9
0.8
Postgraduate
14.2
67.1
16.3
1.7
0.7
Household Income
Less than $50,000
11.8
53.3
27.3
5.5
2.0
$50,000 to $99,999
13.9
61.1
20.9
3.0
1.0
$100,000 to $174,999
15.9
65.9
15.3
2.6
0.3
$175,000 or More
18.0
67.6
12.4
1.3
0.7
Household Type
Couple
14.5
63.2
18.5
3.0
0.7
Single
15.7
58.4
21.0
3.2
1.7
All Respondents
14.8
62.1
19.1
3.1
0.9
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to
850. A homebuyer is classified as first-time if neither the respondent nor the spouse is older than 54 years in age and there is no evidence of a prior
mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a
cashout refinance.
42
Table 26. Expectations for Neighborhood Desirability over Next Couple of Years,
by Loan and Demographic Characteristics
(Percentage Distribution)
Characteristics
Living in the Neighborhood Will
Become More Desireable
Stay About The Same
Become Less Desirable
Loan Type
Purchase 1
28.1
70.6
1.3
First-Time Homeowner2
30.6
68.1
1.4
Repeat Homeowner
27.8
70.9
1.3
Non-Occupant Owner
24.4
74.4
1.3
Refinance 1
19.9
76.7
3.4
Homeowner Cashout3
20.2
76.4
3.4
Homeowner Regular
19.9
76.9
3.3
Non-Occupant Owner
18.9
76.4
4.7
Loan Size
$50,000 or Less
12.2
84.5
3.3
$50,001 to $150,000
17.2
78.9
3.8
$150,001 to $300,000
25.0
72.7
2.3
More than $300,000
33.7
65.9
0.4
Credit Score 2
Lower than 620
26.2
70.5
3.3
620 to 679
23.0
72.9
4.1
680 to 719
24.2
72.3
3.5
22.7
75.3
2.0
720 or Higher
Respondent Age
35 Years or Younger
27.5
70.4
2.1
36 to 45
26.6
70.3
3.1
46 to 55
20.1
77.1
2.8
56 to 65
20.4
76.9
2.7
Older than 65
17.9
80.1
2.0
Race/Ethnicity
Non-Hispanic White
21.0
76.6
2.4
Hispanic and Non-White
28.7
68.2
3.1
Respondent Education
High School or Less
17.7
78.4
3.9
Some College
21.4
75.2
3.4
College Degree
24.4
73.0
2.6
Postgraduate
25.0
73.5
1.5
Household Income
Less than $50,000
17.8
78.0
4.2
$50,000 to $99,999
20.9
75.7
3.3
$100,000 to $174,999
25.7
73.0
1.3
$175,000 or More
29.3
69.3
1.4
Household Type
Couple
23.1
74.7
2.2
Single
23.1
73.0
3.9
All Respondents
23.1
74.3
2.6
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to
850. A homebuyer is classified as first-time if neither the respondent nor the spouse is older than 54 years in age and there is no evidence of a prior
mortgage in the credit files.
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a
cashout refinance.
43
12.0
Financial Expectations
The NSMO survey asked borrowers how likely they were to encounter events in the next couple
of years that might constrain their household finances. Specifically, the survey asked the
likelihood over the next couple of years that the respondent would: retire; be laid off, become
unemployed, or be forced to reduce hours of work; have difficulties making their mortgage
payments; or experience some other personal financial crisis.
Twenty-three percent of respondents indicated they were likely to retire in the next couple of
years (Table 27). Not surprisingly, this fraction was about twice as high for respondents who
were older than 56 than those aged 46 to 55 years old, while six percent of respondents aged 36
to 45 years old and three percent of respondents aged 35 years or younger indicated they would
retire in the next couple of years. Only three percent of first-time homebuyers indicated they
were likely to retire in the next couple of years, while 33 percent of investors purchasing a home
expressed the expectation of retiring in the near term.
Fifteen percent of respondents expected to have difficulties in making their mortgage payments
in the next couple of years. Respondents with very low credit scores (30 percent), high school
education or less (23 percent), or household income less than $50,000 a year (28 percent) were
more likely to believe they will have difficulties than other respondents. Conversely,
respondents with very high credit scores (13 percent), postgraduate degrees (11 percent), or
household income $175,000 or more (seven percent) were less likely to believe they will have
difficulties in paying their mortgage in the next couple of years.
Nearly one out of five respondents indicated that it is likely they might experience a layoff,
unemployment, or forced reduction in hours over the next couple of years. This fraction was
generally similar across groups, although respondents with a high school education at most (21
percent), borrowers with low credit scores (24 percent), and those earning $50,000 or less (22
percent) were somewhat more likely to believe they are at risk than were other respondents.
Twenty-two percent of all respondents indicated that it was likely that they would face some
other personal financial crisis in the next couple of years. Respondents with household income
of less than $50,000 (33 percent), respondents with credit scores below 620 (35 percent),
respondents older that 65 (25 percent), and respondents with only a high school education (27
percent) felt that they were most at risk of a personal financial crisis.
Nearly 85 percent of respondents indicated they had the ability to pay their bills for the next
three months without borrowing (Table 28). Respondents with household income $175,000 or
more (94 percent) and respondents with loans more than $300,000 (91 percent) were more likely
than other respondents to indicate they had the ability to weather an adverse financial shock.
Respondents with household income less than $50,000 (76 percent) and respondents with only a
high school education (76 percent) report that they were less able to weather a financial shock.
44
Table 27. Expectations About Future Financial Situation, by Loan and Demographic Characteristics
(Percent Very or Somewhat Likely to Face Each Situation in the Next Couple of Years)
Characteristics
Retirement
Difficulties
Making Mortgage
Payments
Unemployment,
Layoff, or Forced
Hour Reduction
Some Other
Personal
Financial Crisis
Loan Type
Purchase 1
15.2
10.9
15.8
17.7
First-Time Homeowner2
3.3
10.4
16.5
14.9
Repeat Homeowner
16.5
12.0
15.9
19.0
Non-Occupant Owner
33.6
4.3
13.4
14.5
Refinance 1
27.7
17.4
20.6
24.6
Homeowner Cashout3
27.5
19.3
20.4
25.6
Homeowner Regular
27.4
16.5
20.8
24.6
Non-Occupant Owner
31.4
18.2
19.6
21.7
Loan Size
$50,000 or Less
27.5
12.8
12.8
22.5
$50,001 to $150,000
23.9
17.7
19.6
24.9
$150,001 to $300,000
21.7
13.4
18.9
21.0
More than $300,000
22.3
12.4
17.7
17.2
Credit Score 2
Lower than 620
18.7
29.6
23.9
34.6
620 to 679
17.2
18.9
20.2
24.9
680 to 719
22.1
17.0
17.7
22.6
24.5
12.6
18.3
20.3
720 or Higher
Respondent Age
35 Years or Younger
2.6
10.5
15.1
15.2
36 to 45
6.0
14.7
20.3
20.5
46 to 55
19.7
15.4
23.8
24.0
56 to 65
56.6
18.4
19.7
27.1
Older than 65
45.6
16.6
9.8
24.7
Race/Ethnicity
Non-Hispanic White
23.8
14.2
18.3
21.4
Hispanic and Non-White
20.3
16.8
19.9
23.4
Respondent Education
High School or Less
24.4
23.0
21.4
26.8
Some College
26.5
16.0
19.2
24.0
College Degree
19.2
14.5
18.7
20.8
Postgraduate
23.7
11.1
17.3
19.6
Household Income
Less than $50,000
22.4
27.9
22.4
33.3
$50,000 to $99,999
23.0
16.5
20.0
24.6
$100,000 to $174,999
20.9
9.4
17.7
16.1
$175,000 or More
26.6
6.5
13.8
13.5
Household Type
Couple
23.3
14.1
19.1
21.2
Single
21.4
17.7
17.6
24.4
All Respondents
22.9
14.9
18.8
21.9
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to
850. A homebuyer is classified as first-time if neither the respondent nor the spouse is older than 54 years in age and there is no evidence of a prior
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a
cashout refinance.
45
Table 28. Ability to Weather an Adverse Financial Shock, by Loan and Demographic Characteristics
(Percent Very or Somewhat Likely to Perform Each Action in the Next Couple of Years)
Characteristics
Pay Bills for the
Next Three Months
Without Borrowing
Get Significant
Financial Help from
Family or Friends
Borrow Enough
Money from a Bank
or Credit Union
Increase Income
Significantly
Loan Type
Purchase 1
86.2
62.0
69.4
57.0
First-Time Homeowner2
80.4
75.2
71.7
63.0
Repeat Homeowner
86.9
59.4
68.1
55.6
Non-Occupant Owner
94.2
49.9
73.5
52.7
Refinance 1
83.6
49.9
66.7
45.5
Homeowner Cashout3
82.1
49.3
66.4
42.0
Homeowner Regular
83.6
50.8
66.9
46.5
Non-Occupant Owner
89.2
45.2
66.6
50.3
Loan Size
$50,000 or Less
86.5
45.6
63.4
42.9
$50,001 to $150,000
81.3
52.7
65.4
46.6
$150,001 to $300,000
84.6
56.9
69.0
51.7
More than $300,000
91.3
55.6
71.1
54.8
Credit Score 2
Lower than 620
71.6
45.3
51.6
44.8
620 to 679
72.6
54.6
62.1
51.4
680 to 719
78.9
54.1
66.3
48.1
89.3
55.4
70.4
50.4
720 or Higher
Respondent Age
35 Years or Younger
84.2
74.9
73.5
63.7
36 to 45
81.8
63.4
70.4
53.7
46 to 55
84.3
51.2
67.9
50.3
56 to 65
86.1
39.0
62.0
41.5
Older than 65
89.1
30.8
60.7
28.7
Race/Ethnicity
Non-Hispanic White
85.0
55.0
69.3
48.9
Hispanic and Non-White
83.6
53.6
63.6
52.9
Respondent Education
High School or Less
75.6
46.1
59.3
44.0
Some College
82.0
50.4
62.8
44.1
College Degree
85.6
58.5
69.5
53.8
Postgraduate
89.1
57.0
73.1
52.5
Household Income
Less than $50,000
75.8
51.2
55.1
42.2
$50,000 to $99,999
80.7
54.8
68.1
49.1
$100,000 to $174,999
89.8
56.9
71.7
51.8
$175,000 or More
94.0
53.8
73.6
57.2
Household Type
Couple
85.3
54.8
68.7
50.9
Single
82.1
54.0
64.4
46.5
All Respondents
84.6
54.6
67.8
50.0
Source: National Survey of Mortgage Originations, 2013
Notes: 1. Mortgages to purchase a property are classified as the "purchase" loan type and all other mortgages are clasified as the "refinance" type.
2. Credit score and first-time homebuyer status are assembled from the National Mortgage Database. Credit score from Vantage ranges from 300 to
850. A homebuyer is classified as first-time if neither the respondent nor the spouse is older than 54 years in age and there is no evidence of a prior
3. If a refinance mortgage amount is higher than the previous mortgage or a if mortgage is for a previously mortgage-free property, it is classified as a
cashout refinance.
46
Fifty-five percent of respondents indicated that they could get significant financial help from
family or friends if they suffered an adverse financial shock. Respondents aged 56 to 65 (39
percent) and respondents 65 years and older (31 percent) were the least likely to feel that they
could get significant help from family or friends. Respondents aged 35 years or younger (75
percent) were most likely to feel that they could get financial help from their family or friends.
Fifty percent of respondents felt that they could significantly increase their income if they
experienced a financial shock. First-time homebuyers (63 percent), respondents 35 years or
younger (64 percent), and respondents with incomes of $175,000 or more (57 percent) were
more likely to indicate they could significantly increase their income. Older respondents were
less likely to indicate they could significantly increase their income. Respondents aged 56 to 65
years old (42 percent) and respondents older than 65 years (29 percent) reported they could not
significantly increase their income if they experienced a financial shock.
13.0
Summary and Further Work
This technical paper draws on the nationally representative data in the NSMO to provide a broadbrush picture of the mortgage-related experiences, choices, and outcomes of borrowers who took
out a mortgage in 2013. Originations in 2013 were influenced by favorable interest rates that led
to many refinancing transactions. New rules for mortgages were issued in 2013 that took effect
in early 2014. The next report on mortgage originations from the NSMO will provide data that
will enable a comparison of 2013 and 2014 mortgage originations.
47
Appendix
The National Mortgage Database is a multi-year project being jointly undertaken by the Federal
Housing Finance Agency (FHFA) and the Consumer Financial Protection Bureau (CFPB). The
project is designed to provide comprehensive information about the U.S. mortgage market based
on a five percent sample of residential mortgages. The project has two primary components: (1)
the NMDB 4 and (2) the quarterly NSMO. 5
The NMDB project will enable FHFA to meet the statutory requirements of section 1324(c) of
the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the
Housing and Economic Recovery Act of 2008, to conduct a monthly mortgage market survey.
Specifically, FHFA must, through a survey of the mortgage market, collect data on the
characteristics of individual mortgages, including subprime and nontraditional mortgages, and
information on the creditworthiness of borrowers, including a determination of whether subprime
and nontraditional borrowers would have qualified for prime lending.
For CFPB, the NMDB project will support policymaking and research efforts and help identify
and understand emerging mortgage and housing market trends. The CFPB expects to use the
NMDB, among other purposes, in support of the market monitoring called for by the DoddFrank Wall Street Reform and Consumer Protection Act, including understanding how mortgage
debt affects consumers.
FHFA and CFPB have examined existing databases, and determined that none fully meets the
criteria necessary to achieve the above objectives. The NMDB, when fully complete, will be a
de- identified loan-level database of closed-end first-lien residential mortgages. It will (1) be
representative of the market as a whole; (2) contain comprehensive information on the terms and
performance of mortgages, as well as characteristics of the associated borrowers and property;
(3) be continually updated; (4) have an historical component dating back before the financial
crisis of 2008; and (5) provide a sampling frame for the NSMO.
The core data in the NMDB are drawn from a random 1-in-20 sample of all closed-end first-lien
mortgage files outstanding at any time between January 1998 and June 2012 and maintained by
Experian, one of the three national credit repositories. A random 1-in-20 sample of mortgages
newly reported to Experian is added each quarter. Mortgages are followed in the NMDB
database until they terminate through prepayment (including refinancing), foreclosure, or
maturity. Information from credit repository files on each borrower associated with the
mortgages in the NMDB sample is collected from at least one year prior to origination to one
4
See National Mortgage Database Technical Report 15-01 (August 27, 2015),
http://www.fhfa.gov/PolicyProgramsResearch/Programs/Documents/NMDB_Technical_Report_15-01_082715.pdf
for more details.
5
See National Survey of Mortgage Borrowers Technical Report 15-02 (August 27, 2015),
http://www.fhfa.gov/PolicyProgramsResearch/Programs/Documents/NSMO_Technical_Report_15-02-082715.pdf
for more details.
48
year after termination of the mortgage. The information on borrowers and loans available to the
FHFA, CFPB, or any other potential user of the NMDB data is de-identified and does not include
directly-identifiable information, such as borrower name, address, or Social Security number.
The NSMO is a component of the NMDB project. The survey is designed to complement the
NMDB by providing information, particularly related to mortgage shopping, which is not
available in the database. The survey is completely voluntary and its target universe is newly
originated closed-end first-lien residential mortgages and their associated borrowers. To achieve
this objective, the NSMO draws its sample from mortgages that are part of the NMDB, which
samples from the same target universe.
The NSMO is administered by Westat under a subcontract with Experian. Fair Credit Reporting
Act (FCRA) rules dictate that the survey process, because it utilizes borrower names and
addresses drawn from credit repository records, must be administered through Experian in order
to maintain consumer privacy.
Each quarter, the NSMO sample is selected from the mortgage loans newly added to the NMDB
sample that quarter. Starting with the loans originated in 2013, a “simple random sample” of
about 6,000 loans was drawn each quarter. At present, this represents a sampling rate of 1-in-13
from the NMDB sample. This rate is equivalent to a 1-in-260 sampling rate of the overall
population since the NMDB is a 1-in-20 sample of the closed-end first-lien mortgage loans in the
Experian data.
After the sample is selected, Experian eliminates any potential respondents who have opted out
of previous surveys or are deemed not to have legitimate addresses or names. Industry guidance
(Metro 2® Industry Standards for Credit Reporting) requires that servicers must supply a billing
address for each borrower on a trade line (including mortgages). Experian generally uses these
borrower billing addresses as the survey mailing address. Sometimes, however, there are
multiple addresses and borrowers associated with a survey sample loan. In these cases, Table A1 presents the rules for selecting the borrower(s) and address to which the survey is mailed. The
survey is sent to two borrowers at most who share a common address.
49
Table A-1. Rule for Best Address
Number of
borrowers
Same or different
address
Resulting survey recipient
1
n/a
One borrower with Experian’s associated best address
2
Same
Two borrower names with one common best address
2
Different
The one borrower and associated best address with the
lowest number of open mortgages.
>2
Same
Two borrowers with one common best address that has
the highest number of trade lines reported
>2
Different
The one borrower and associated best address with the
lowest number of open mortgages
FHFA and CFPB never receive the names or addresses that are chosen for the survey. Only
Experian and Westat, as Experian’s subcontractor, have access to this information.
The survey implementation strategy comprises four respondent contacts over a seven-week
period:
Week 1
population)
Printed questionnaire, cover letter, and cash incentive (entire survey sample
Week 2
1st reminder letter (entire survey sample population)
Week 5
2nd reminder letter, printed questionnaire, and additional cash incentive
(sampled borrowers who have not responded by Week 4)
Week 7
3rd reminder letter, which includes the due date for returning the questionnaire,
to close the communication loop (sampled borrowers who have not responded by Week 6)
Participation in the survey is completely voluntary and respondents are assured of confidentiality
in their responses. The first and the third contacts contain a printed survey questionnaire and a
five dollar cash incentive, which the respondent is free to keep whether they return the
questionnaire or not. The mailings and printed questionnaires detail how respondents can also
complete the survey online in either English or Spanish (there is no printed Spanish
questionnaire) using instructions and a unique “survey PIN number” provided in the
questionnaire packet. About one quarter of survey responses are completed online.
Mail surveys are processed for four weeks after the third reminder letter, so the field period
comprises 11 weeks in total. It takes between five and six weeks to draw the new NMDB
sample, identify and combine duplicative records, draw the NSMO sample, process it at
50
Experian, and print the survey materials. Thus, the survey cycle typically begins six weeks after
the end of a quarter and extends about four weeks into the next quarter.
All returned questionnaires and any non-delivered mail are sent directly to Westat and not to
FHFA, CFPB, or Experian. All survey responses received by Westat are purged of any
information related to the name of the borrower, address of the borrower, or name of any
financial institution. This is done to maintain the de-identified confidential nature of the data and
to ensure that the survey responses cannot be connected to a name or address.
During the first eight weeks of each cycle, Experian maintains a NSMO call center to address
any questions by respondents. This call center also allows respondents to “opt out” of the survey
and future surveys. Both FHFA and CFPB describe the survey on their websites so that
respondents can independently validate the legitimacy of the survey. The agency officials
signing the cover letter (Sandra Thompson at FHFA and David Silberman at CFPB) are
identifiable on the websites as senior employees of their respective agencies.
Once the active phase of a survey cycle ends, it takes about 25 days for Westat to scan and edit
returned questionnaires, combine them with on-line responses and create an electronic data file.
This file is delivered to the NMDB development staff, through Experian. It takes a further eight
weeks to complete additional cleaning and editing of survey responses, to create preliminary
sample weights, and to assemble a preliminary user data file.
Since it takes between 90 and 150 days for the typical mortgage loan to be reported by the
servicer to the credit repositories after origination, the first preliminary user data file will
generally reflect mortgage originations of approximately one year earlier. Consider the fourth
wave of 2014 as an example. The survey sample is drawn from the September 2014 archive and
captures loans reported to Experian between June and September 2014, with most originated
between March and June 2014. The fourth wave was put into the field in early November and
closed at the beginning of February 2015. The electronic data file was delivered to the NMDB
development staff in late February, and it took until the end of April 2015 to create a preliminary
version of the survey data base.
The timeline just described applies to each quarterly wave data release. Because some loans can
take longer than six months to be reported to the repositories, a usable data file fully
representative of a calendar year will not generally be available until December of the following
year.
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| File Type | application/pdf |
| Author | Schultz, Jay |
| File Modified | 2016-12-21 |
| File Created | 2016-05-26 |