Across the country, banks are hindering the housing market recovery due to their cautious lending practices. This has resulted in an increase in the amount of mortgage loans being rejected by these largest banks. The 10 largest lenders together have denied nearly 27% of all mortgage applications. Where they once were free and loose with their lending standards (which got us into the dire situation we’re in now), many agree that things have swung too far in the other direction – now being too stringent in their lending standards. The popular sentiment is that the lending standards need to be easier for mortgage borrowers in order to help the US economy on the road to recovery.
Check out this graphic below, and you’ll see how the denial rates (the darker the red, the higher the percentage) are concentrated in the south and the so-called “Rust Belt.”
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