The main reason for the changes is the appetite for investors to purchase loans has severely been hampered by foreclosures. This can be deceiving because what investors thought to be a quality loan go into default.
This might not be the fault of the borrower because maybe they lost their job, had a tragic issue or just plain ran out of monies. No one ever thought that 30 year fixed mortgages would be forced into foreclosure.
But it’s a reality and will continue for at least another 24 months. It my opinion once the foreclosure rates decrease, we will see lending standards ease at bit. Credit score requirements and down payment standards are still on the rise. I am seeing lenders move to a middle credit score of 640. Six months ago the middle credit score requirement was 580. It takes a well qualified borrower to get a loan in today’s financial climate. I completely understand why lenders and investors are so skittish to lend. I believe our country is strong and will turn the corner late next year. Until then it will be tough for the entire real estate industry. If we all work together in a common goal to help homeownership, it will past faster and be much more rewarding to hand someone the keys to their new home. Good luck selling !!!!
