Is It Too Hard To Get a Mortgage? – Zillow Blog
Six years after loose lending guidelines caused the worst financial crisis since the Great Depression, many still argue it’s too hard to get a mortgage in this country. The debate was framed well recently as USA Today squared off with the Mortgage Bankers Association (MBA), the country’s top housing finance advocate.
USA Today said that human discretion has been taken out of mortgage decision making at banks, and they rely too heavily on transferring loan risk to government-backed entities Fannie Mae and Freddie Mac. The paper printed a rebuttal from MBA head David Stevens saying lenders are running scared because unclear regulations and heavy-handed enforcement can put them out of business overnight for lending to imperfect borrowers.
Both make a similar point in different ways: Home lending got too tight post-crisis and is still too tight. But before we discuss how it’s loosening, let’s remember how we got here.