The pendulum of credit standards has gone from the “Liar’s Loans” of 2006 where anyone could get a loan at any price as long as they were willing to fib, to standards over the past couple years where you had to have a perfect credit rating and offer your first born as collateral before the lending committee would even consider your application.
But now it looks like we may be finding a more reasonable marketplace for home loans. With an increase in demand, housing prices rising, and inventory coming down, lenders are feeling a little more confident.
The survey results are reported as a diffusion index; that is, the percentage of respondents saying they are easing lending standards somewhat or considerably is subtracted from those who report they are tightening standards for a range of different lending products. In the case of “traditional” mortgage loans, 1.5 percent of respondents reported “somewhat” tighter standings, while 4.6 percent reported standards easing somewhat, and 1.5 percent reported standards easing considerably for a net 6.1 percent easing. Meanwhile, 92.3 percent said standards were unchanged. via DS News
If we can keep the low rates and have accessible mortgages for slightly less than prime lenders, we may see a nice year in 2013 for home sales.