Attom Data Solutions reports that small mortgages are becoming scarcer for low- and middle-income homebuyers. The real estate firm estimates that lenders offered about 106,000 mortgages with balances between $10,000 and $70,000 last year, a 38 percent decline from 2009, with originations falling 26 percent for mortgages priced between $70,000 and $150,000. By comparison, lenders underwrote 65 percent more higher-priced mortgages. “The whole system incentivizes high[-balance] loans,” says Structured Finance Industry Group President Michael Bright. Experts attribute the decline to lenders’ difficulty in profiting from smaller loans, given that they usually extend mortgages at fixed costs.
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