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Borrowers with sub-660 credit face loan hurdles

November 2, 2012 @ 12:10 pm

While lenders claim that standards for loans insured by the Federal Housing Administration have stayed about the same as they were in 2006, borrowers with credit scores lower than 660 are facing a tougher time in getting approved, according to a new survey by the Federal Reserve of 68 domestic banks and 23 U.S. branches and agencies of foreign banks.

Overall, the survey found that lending standards for prime and nontraditional mortgages have mostly been unchanged the last three months. The survey did find that mortgage demand is picking up - for both residential and commercial and industrial lending.

One of the main reasons behind the upswing in loan applications: More homeowners trying to take advantage of the Home Affordable Refinancing Program, HARP 2.0, aimed at helping underwater homeowners refinance.

For the commercial sector, several domestic banks reported easing in many commercial and industrial loan terms to borrowers. The reason? Most of the banks cited "more-aggressive competition from other banks as the main reason for easing up on some standards."

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Comments (3)


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  • pgreenswim wrote...
    So do those...
    November 3, 2012 10:15 pm
    That have 800+ scores, but have PMI...
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • SickofSeattleite wrote...
    even when my credit score was high
    November 4, 2012 6:56 am
    i couldn't even get a $400 home depot card to pay for a new bathtub because of my debt to income ration due to my underwater house. We spent 10 years cleaning up our credit in the first place, then when it is good we can't do anything with it.... My advice. Don't have debt. Don't have CC. Be financially independent. Borrowing is bad look at the latest reports from the Congressional Budget Office and see how much money the Obama admin has spent. It will knock your socks off! Eventually America will have to suffer the consequences of to much borrowing.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Concerned US Citizen wrote...
    Wah
    November 5, 2012 9:32 am
    If you are lower than 660 you shouldn't get a loan. What do you think caused the housing collapse in the first place. The banks were forced to make loans to people and areas that they had no business loaning to in the first place!!! The government threatened lawsuits for discrimination if they didn't loan to these marginally qualified people. The liberal politicians in Washington wanted everyone in a home and it didn't work. Thanks for nothing Barney Frank!!!
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • { "Thumbs Up":"1","Thumbs Down":"-1" }