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Banks Not Especially Eager To Start Handing Out Mortgages To People With Credit Scores In The Low 400s Yet

It’s becoming easier to get a mortgage if you’re the sort of person who should be getting a mortgage. But it seems it will take banks longer than five years to forget an economic crisis caused/fueled/exacerbated by universal mortgage eligibility.

Nearly 10% of banks said they eased their lending standards for “prime,” or low-risk, mortgages in the first quarter, according to the Federal Reserve’s latest survey of senior loan officers, released Monday. The report, which provides a snapshot of the supply of, and demand for, bank loans, showed a greater share of banks easing these standards than the 5% in the previous quarter’s survey….

Most banks said they weren’t any more willing to approve loans to borrowers with middle-of-the-range credit scores, and standards for “subprime” mortgages remained very tight….

The Fed data highlight a persistent problem for the U.S. recovery: Access to credit is easing for mortgage borrowers with the best credit histories, yet banks aren’t loosening them for borrowers with less-than-stellar credit. That is keeping many Americans from taking advantage of low interest rates.

Mortgage Lenders Ease Standards for Safest Borrowers [WSJ]

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21 Responses to “Banks Not Especially Eager To Start Handing Out Mortgages To People With Credit Scores In The Low 400s Yet”

  1. UBS History Quant says:

    The government should really pass some legislation forcing these big, mean banks to ease up on their standards. That way, the working/middle-class with less than perfect credit can take advantage of these low rates, purchase a home, and live the American Dream.

  2. Guest says:

    Shaaaaaazarttttttttttt!

  3. Get it right stupid says:

    How MBSs are legal is beyond me.

    – Guy who think investment bankers thieves

  4. Get it right stupid says:

    How MBSs are legal is beyond me.

    – Guy who think investment bankers ARE thieves

    PSS – Also guy who doesn't proofread before submitting

  5. Guest says:

    Mortgages should be securitized by the youngest (of-age or approaching) daughter of the family.

  6. Guest says:

    When I saw low 400s, I first thought they were referring to the poundage of the applicants.

  7. Very sorrow able news for the mortgage loan borrowers! Actually this is a do or die situation for both of them banks and mortgage loan borrowers because of the economical condition. So i think only government can do something in here and also bank should think about the low credit score weather to find out any other solution. Thanks