No Shirt, No Shoes, No Mortgage

It’s getting more and more difficult for would-be borrowers in the New York region to get a mortgage, according to an article in yesterday’s Times. Mortgage brokers say many lenders are refusing loans to applicants with credit scores that are below the 680-700 range. Stated-income loans, meanwhile, are basically history, and people with lower credit scores have to pay much bigger down payments. To add insult to injury, loans are coming with more fees nowadays, especially for those with less-than-pristine credit. One financial analyst says loan applicants with credit scores below 720 and down payments of less than 40 percent face fees between .5 and .75 percent of the loan amount. Is all this a necessary correction, or has the pendulum swung too far in the other direction, making home ownership unattainable for a huge segment of the population?
Lenders Raise the Bar [NY Times]
Chart from The New York Times.