One element contributing to tightened credit requirements is lenders’ reluctance to originate loans sold into the enterprises that are government-sponsoredGSEs) Fannie Mae and Freddie Mac.


One element contributing to tightened credit requirements is lenders’ reluctance to originate loans sold into the enterprises that are government-sponsoredGSEs) Fannie Mae and Freddie Mac.

Is Credit Too Tight?

Because loan providers have actually tightened their credit requirements, they may not be serving an important quantity of low-risk prospective borrowers. Borrowers with less-than-pristine credit and paperwork are struggling to obtain mortgages. Scientists during the Urban Institute estimate that if loan providers had used the exact same credit requirements that were utilized in 2001 — before the loosening of criteria linked to the housing crisis — they would have given yet another 5.2 million mortgages between 2009 and 2014. 11 They discover that between 2001 and 2014, the true wide range of borrowers with FICO ratings above 700 reduced by 7.5 per cent, the quantity with ratings between 660 and 700 declined by 30 %, additionally the quantity with ratings less than 660 reduced by 77 %. 12

続きを読む “One element contributing to tightened credit requirements is lenders’ reluctance to originate loans sold into the enterprises that are government-sponsoredGSEs) Fannie Mae and Freddie Mac.”