Banks Not Especially Eager To Start Handing Out Mortgages To People With Credit Scores In The Low 400s YetBy Jon Shazar
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.