Shouldn’t ‘News’ be ‘New’?

Call me crazy, but people seemed concerned/caught off guard with a statement released by the Fed on Monday regarding trends in Lending. In early July, the Fed surveyed 50 Banks about their lending practices. These 50 banks account for 80% of the mortgage market. Here’s what they found:

• For Prime Mortgages, 75% have tightened their standards, up from 60% in April
• For Non-Traditional mortgages, 32 out of 50 banks were still originating these types of loans
• Of those 32, 85% have tightened their standards, up from 75% in April

Just an FYI, the Fed defines non-traditional loans as adjustable-rate, interest-only, and ‘Alt-A’ mortgages that require limited income verification. Those are the ‘bad’ kind (for the most part).

Nothing in this survey seemed shocking. Lenders are and will continue to be more cautious with their mortgage policies. It only makes sense. Someone had mentioned the article to me as if they couldn’t believe it. I don’t see what part of this would really be ‘news’.

Now, those guys from Georgia who discovered Big Foot…. that’s news! Or a least a good laugh…