Mortgage originations at 2nd highest level in 20 years: Fed

Borrowers took out over $1T in home loans in Q3

Banks in New York City are requiring bigger down payments and applying extra scrutiny on borrowers after Covid ravaged the residential market. (iStock)
Federal Reserve chairman Jerome Powell (Getty; iStock)

Mortgage balances rose in the third quarter as foreclosure filings fell, according to the Federal Reserve Bank of New York.

Borrowers took out $1.05 trillion in home loans, according to a new report. The level of mortgage originations, which includes both purchases and refinancing, was the second highest seen since 2000, the Wall Street Journal reported.

Donghoon Lee, a research officer at New York Fed, said originations “continued on their upward trend as homeowners continue to take advantage of the low interest-rate environment.”

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Total mortgage balances hit $9.86 trillion — up $85 billion from the second quarter, the report said.

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In the same period, foreclosure filings fell as homeowners with federally guaranteed mortgages utilized forbearance extended by the government because of the pandemic.

Some 16,000 households experienced foreclosure last quarter, a drop from almost 24,000 in the second quarter. [WSJ] — Sylvia Varnham O’Regan