Bloomberg Law
May 8, 2020, 8:00 AM

Mortgage Lenders Tighten Screws on U.S. Credit in Echo of 2008

Joseph Light
Joseph Light
Bloomberg News

Mortgage rates are at record lows, but borrowers hoping to take advantage are running into the toughest loan-approval standards in years.

Over the past month, lenders have put in place higher credit-score and down payment requirements, and in some cases stopped issuing certain types of loans altogether, in effect shutting down a large swath of the mortgage market.

The triggers, industry executives say, include lenders becoming risk-averse during the coronavirus crisis, knock-on effects of Congress allowing millions of borrowers to delay their monthly payments, and policies implemented amid the pandemic by mortgage giants Fannie Mae and Freddie Mac. The ...