Getting a mortgage these days is obviously not as easy as it was during the housing boom, when pretty much anyone could get a loan.
But after years of tightening, it seems like the standards are loosening up a bit.
“We are seeing underwriters have a little more flexibility with some common-sense issues,” Grabel says. “That’s not a suggestion we are going back to the old days.”
Standards have loosened mostly for larger loans, or jumbo loans, because they are not the types of loans that get sold to Fannie Mae and Freddie Mac. The institutions have their own guidelines and lenders must follow them if they want to sell the loans after they issue them.
Mel Watt, the new head of the Federal Housing Finance Agency, recently said his office will change some of the guidelines to allow lending to borrowers with slightly lower credit scores. The FHFA oversees Fannie and Freddie.
“Mel Watt reversed course for the first time in many years to say we have to loosen the current lending standards,” Hsieh says.
Some lenders also are allowing lower credit scores on FHA loans. Many lenders required borrowers to have a credit score of at least 640 for an FHA loan.