The nation’s housing market is booming and the total amount of money lent in the mortgage market is approaching record levels, but underneath the hot surface, the general public may find it increasingly difficult to obtain a loan because lenders are becoming more cautious in light of the 2008 financial crisis.
The Wall Street Journal (Wall Street Journal) reported that data from the Mortgage Bankers Association showed that the Mortgage Credit Availability Index, which measures institutions’ willingness to lend, plunged 35 percent. Availability Index) plunged 35% to February this year, still 31% lower than the same period last year, and continues to hover at the lowest level since 2014.
Data from the Federal Reserve Bank of New York show that 70% of the nation’s mortgages in 2020 went to people with credit scores of 760 or higher; the median credit score for people who received a mortgage in the fourth quarter of 2020 was 786, up from 770 in the same period in 2019.
The Federal Housing Administration (FHA), which provides mortgages to lower-income people, has also increased its median credit score for people with mortgages from 666 in fiscal year 2019 to 672 in 2020.
Because the 2008 financial meltdown was triggered by subprime mortgage defaults, agencies are now scrutinizing more closely during the epidemic; Jeanne Griffin of Minnesota told the Wall Street Journal that her credit score of 713, but the suspension of her school loan payments due to the epidemic, was a reason for her local credit union to deny her loan; the credit union also The credit union also said that this would not have been the case if it was before the epidemic.
In addition, the rapid rise in home prices, the fastest in 15 years, with national home prices topping $300,000 for the first time, has also affected mortgage lending, concentrating the nation’s mortgage borrowers among those with very good credit and the ability to make large down payments, affecting others who could have obtained loans.
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