Lenders continue to reject borrowers with
otherwise good credit when they diverge from the standard approval
checklist.
Would-be borrowers facing the most problems
include the self-employed.
One reason bankers are so nervous are the
standards held out by Fannie Mae and Freddie Mac. Not only are Fannie
and Freddie demanding credit scores above 720, they are refusing to buy
back defaults when the original mortgage application had small
discrepancies from the norm. To avoid losses, lenders are being extra
careful.
The result is that some borrowers are being
rejected for problems that seem completely inconsequential.
Source: The Wall Street Journal, James R.
Hagerty and Nick Timiraos (07/10/10)