Residential mortgages were more difficult to get over the past three months than at any time in the 17-year history of the Federal Reserve's survey of banks.

By
Services for Real Estate Pros with Atlas Adjustments LLC.

Major banks made it much tougher for all types of customers to get loans over the past three months, according to the Federal Reserve's quarterly survey of bank lending officers.

This summer's credit squeeze prompted an unprecedented tightening in lending standards at major banks. As credit standards toughened, demand for loans also fell, the Fed reported Nov. 5, providing some fresh details on the fallout from the credit crunch.

Residential mortgages were harder to get than at any time in the 17-year history of the Fed's survey of banks' senior loan officers, the Fed said. The survey covers 52 domestic banks and 22 foreign banks, which together account for a majority of bank lending in the country.

Credit standards tightened for borrowers with the best credit, with 41% of banks requiring prime borrowers to jump over a higher bar before receiving mortgages. That's the biggest increase in tightening standards ever recorded. In the July survey, just 15% of banks reported higher standards for prime borrowers.

Even more banks were clamping down on borrowers trying to get nontraditional or subprime loans. For nontraditional loans (often called alt-A), 60% of banks raised their standards, and 55% of the banks that offer subprime loans raised the bar for such mortgages. The vast majority of banks don't offer subprime loans.

 

 

 Interesting facts via MSN.com I thought I would share with my activerain community

 

 

Anthony Fico

"still writing loans in all 50 states" 

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Rainmaker
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David Spencer
Keller Williams Northland - Kansas City, MO
Show Me real estate in Kansas City

There are people with mortgages that should never have been approved.

Today, 100% financing is still available if: stated income is sufficient, credit score at 680 or more and sufficient assets. Credit score could be less with adequate assets. This is just like it was 10 years ago. If the buyer can afford a house, they will get one with no problem.

Nov 14, 2007 09:06 AM #1
Rainer
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Stephen Stahl
National Currency Resources - New York, NY

Interesting article. I remember back in 2003 the lenders would lend anybody with a 600 credit score 100%. Now everything under a 680 is subprime! Let's keep our eyes open for another refi boom

 

Stephen Stahl

 

Nov 14, 2007 12:17 PM #2
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Rainer
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