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Mortgage Credit Lags Consumer Credit Recovery

Consumer credit has been recovering, but mortgage lending continues to lag.

Data from the Federal Reserve Board  shows that consumer credit debt is now higher than it was before the recession, while mortgage debt continues to decline.

Based on information in the monthly REALTORS® Confidence Index (RCI) Survey (http://www.realtor.org/reports/realtors-confidence-index) many REALTORS®  have indicated that lending by banks and other financial institutions continue to be too tight. NAR estimates an additional 250-300 thousand existing home sales under less restrictive conditions.

Meaning for REALTORS®:  This is additional confirmation that a recovery is under way.  Although there is some evidence of credit easing, prospective purchasers may need to be persistent in applying to several places for a mortgage—and will want to clear up any credit discrepancies before applying.

Comments
  1. What happens when you need to verify income… not so easy anymore … DTI… We should have always had these standards in the first place because it shows true capacity

    Homes should be looked at as cost of shelter to your own capacity to own the debt, not an investment first!

    http://loganmohtashami.com/2012/09/26/stop-crying-about-lending-standards/