The percentage of mortgage applications rejected by the nation's largest lenders increased in 2010
- Banks' cautious lending practices are hampering the nascent housing market recovery
- The nation's 10 largest mortgage lenders denied 26.8% of loan applications in 2010, an increase from 23.5% in 2009
- With the U.S. economy still wobbly, mortgage underwriting will need to be more accomodating to obtain qualified borrowers, not harder
- Would-be borrowers are having a harder time qualifying as their incomes have fallen or are interrupted by a period of unemployment
- Self-employed applicants are also hitting barriers to loans-hurdles they didn't face in the past
- Lending standards will stay tight in part because government entities Fannie Mae, Freddie Mac, and the Federal Housing Administration, which collectively account for more than nine in 10 loans being made today, are under heavy pressure to avoid any losses
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