Mortgage Market Shifts to Snub Bad Credit Applicants

Sobering up after the five year frat party that was the most recent housing bubble, the mortgage industry has been surprised to find out just whom, exactly, it has shared a bed with.  Or, at the very least, the back of a dirty panel van.

To try to unsully its bad reputation, mortgage companies are saying “no” more and more frequently to subprime home loan candidates.

The shifting market is cajoling investors into demanding higher standards for loan approval rather than the previous “Breathing? Check” system that seemed to be in place during the heady days of “Home Loans for All!”  For instance, loans for 100 percent of a property’s value required a minimum credit score of 580 last year, but now require at least a 600 score.

The news isn’t good for low-income minority families – those hit the hardest by the recent classing up of the mortgage industry.

The housing slump and stricter loan requirements may even end up putting a dent in the nation’s economy, with consumers having less money to spend because of higher interest rates and fewer refinancing options.