Article By Anna Maria Andriotis - Dow Jones
The likelihood that a mortgage application
will be approved varies widely by bank.
Home-buyer rejection rates ranged from 11% to 34% in 2012
at the 10 largest mortgage lenders, according to data released this month by the
Federal Financial Institutions Examination Council. Those who applied for a
mortgage at SunTrust /quotes/zigman/242272/quotes/nls/sti STI +0.77% faced the
lowest rejection rate—3,831 out of 34,749 applications were denied—while those
at Chase encountered the highest rejection rate, with 26,894 out of 80,036 (a
third) not passing muster. Despite the fact that large lenders sell most of
their mortgages to government agencies, many require applicants to clear hurdles
that surpass federal guidelines, and they do so in degrees that vary by
institution, resulting in confusion for applicants. Home buyers who get rejected
for a mortgage at one large bank could get approved at its competitor—assuming
they know not to give up the search. “It absolutely makes a difference where you
go,” says Stu Feldstein, president at SMR Research, a mortgage-research firm.
Don’t bank on getting that mortgage approved:
Number of 2012 home buyers rejected by the top 10 mortgage lenders
| Total applications for purchase | Rejection rate | Applications denied | |
|---|---|---|---|
| Bank of America* | 76,355 | 25.6% | 19,547 |
| Branch Banking and Trust Co. | 43,840 | 15.6% | 6,855 |
| Citibank* | 44,945 | 14.3% | 6,442 |
| Flagstar Bank | 52,030 | 13.2% | 6,853 |
| JPMorgan Chase | 80,036 | 33.6% | 26,894 |
| PHH Mortgage | 17,034 | 11.5% | 1,967 |
| Quicken Loans* | 25,038 | 17.3% | 4,331 |
| SunTrust Mortgage | 34,749 | 11.0% | 3,831 |
| U.S. Bank * | 52,425 | 17.2% | 9,014 |
| Wells Fargo* | 399,911 | 21.2% | 84,687 |
