MBA says new credit standards make it harder for homebuyers to get a mortgage

HousingWire Daily

In today’s Daily Download episode, HousingWire covers a report from the Mortgage Bankers Association that indicates it hasn’t been this hard for homebuyers to get a mortgage in six years.

For some background on the story, here’s a summary of the article:

Mortgage credit in August was the tightest in more than six years as a weak economy prompted lenders to tighten standards, the Mortgage Bankers Association said in a report on Thursday.

The group’s Mortgage Credit Availability Index fell 4.7% to 120.9 last month, the lowest since March 2014, indicating stricter requirements to get loans.
The index plunged from record highs seen in late 2019 after the COVID-19
pandemic caused the worst economic contraction since the Great Depression.

The drop in the availability of credit was “driven by a reduction in supply from both conventional and government segments of the market,” said Joel Kan, an MBA associate vice president.

“Credit continues to tighten because of uncertainty still looming around the health of the job market,” Kan said. “A further reduction in loan programs with low credit scores, high LTVs, and reduced documentation requirements also continued to drive the overall decline in credit availability.”

Following the main story, HousingWire covers a forecast from CoreLogic that claims the COVID-19 pandemic may lead to a foreclosure crisis and a report from Black Knight that suggests the refinancing boom is just getting started.

The Daily Download examines the most compelling articles reported from the HousingWire newsroom. Each afternoon, we provide our listeners with a deeper look into the stories coming across our newsroom that are helping Move Markets Forward. Hosted by the HW team and produced by Alcynna Lloyd.

HousingWire articles covered in this episode:

2020-09-14 7 min

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