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]

21 comments (hidden to protect delicate sensibilities)
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Comments (21)

  1. Posted by UBS History Quant | May 7, 2013 at 1:25 PM

    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. Posted by Guest | May 7, 2013 at 1:36 PM

    Shaaaaaazarttttttttttt!

  3. Posted by UBS Strat | May 7, 2013 at 1:41 PM

    …."If only someone would bundle this subpar– no, no, let's call it "subprime" debt–yes that's more optimistic sounding and sell it on the secondary market and offer offsetting insurance against the debt holders, we'd stand to make a fortune!"

    – UBS Strat

  4. Posted by Im_a_Dude | May 7, 2013 at 1:41 PM

    Amen, I'll roll the dice on that.

    Barney Frank

  5. Posted by Guest | May 7, 2013 at 2:33 PM

    You eat truck stop sushi again?

  6. Posted by Grundlecakes | May 7, 2013 at 3:22 PM

    One of the worst comments of the month.

  7. Posted by Get it right stupid | May 7, 2013 at 3:29 PM

    How MBSs are legal is beyond me.

    – Guy who think investment bankers thieves

  8. Posted by Get it right stupid | May 7, 2013 at 3:29 PM

    How MBSs are legal is beyond me.

    – Guy who think investment bankers ARE thieves

    PSS – Also guy who doesn't proofread before submitting

  9. Posted by Guest | May 7, 2013 at 3:34 PM

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

  10. Posted by PermaGuestII | May 7, 2013 at 4:30 PM

    Because it would be so much better if all these defaulted mortgages were held on-balance-sheet in the American banking system?

  11. Posted by Guest | May 7, 2013 at 4:43 PM

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

  12. Posted by Learn English | May 7, 2013 at 4:45 PM

    Try this on for size:

    How MBSs are legal is beyond me.

    – Guy who thinkS investment bankers ARE thieves

    Your name says it all: get it right, stupid

  13. Posted by RevisionistHistory | May 7, 2013 at 8:53 PM

    Ever hear of a CDO-squared and the exacerbation of the leverage problem in this country via the shadow banking system? Or were you too busy whacking it to Fox and Friends to pay attention to that little detail?

  14. Posted by PermaGuestII | May 7, 2013 at 9:38 PM

    No, I was too busy in '06-'07-'08 working my ass off for a bulge bracket that blew itself up and sank because of bad RMBS trades (taking most of my savings with it) to watch some random tv show. Yet I still have no problem w MBS. Don't blame the product, blame the idiot who overpays.

    Not that they taught you such things in the school I assume you were attending until last year, given your off-topic buzzword-filled rant.

  15. Posted by Michael Moore | May 8, 2013 at 10:00 AM

    Me too.

  16. Posted by Anon Fixed Income | May 8, 2013 at 10:02 AM

    Hey, but at least now you've got a Dealbreaker gold pass, so that's something.

    -Guy who feels bad now and would gladly enter some losing trades with you.

  17. Posted by guest | May 8, 2013 at 1:11 PM

    Well someone sure likes left-wing buzzwords! Now all you have to do is make a comment about derivatives that shows you lack any substantive knowledge of said derivatives and you'll be all set.

  18. Posted by RevisionistHistory | May 8, 2013 at 2:47 PM

    You'd have been better off watching Fox and Friends

  19. Posted by RevisionistHistory | May 8, 2013 at 2:48 PM

    Looks like somebody else lost their life savings in a massively over leveraged investment bank and is now blaming the Community Reinvestment Act.

  20. Posted by Guest | May 8, 2013 at 3:44 PM

    Judging from the rampant buzzwords and left-wing angst, I'm going to go out on a limb and say "RevisionistHistory" is a parody of the OWS crowd. Nicely done.

    Either that, or exams just finished and someone is cranky from too many all-nighters.

  21. Posted by home mortgages | May 14, 2013 at 12:01 PM

    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