Lenders have been more strict with their underwriting standards the last few years, making it difficult for even buyers with good credit to get approved for a home loan. According to the National Association of Realtors, the Federal Reserve Chairman Ben Bernanke has said that the tightening of the mortgage market “has gone too far.” 

Recent data released by Ellie Mae also shows there may be some improvement in the loosening of credit. 

In its latest data release, Ellie Mae found that the average FICO scores for approved loans has started to drop — a 767 FICO average for all of 2012 compared to 761 FICO average for all approved conventional loans during February. 

More applications for mortgages also were approved — 56.8 percent in February versus 55 percent in January, a small improvement.

Refinancing fell to 68 percent in February, from 73 percent in January, which may indicate that lenders are getting more serious about going after the purchase market.

Still, many in the industry say that banks are being too strict with home loans. Many experts predict that if credit conditions returned to “normal,” there will be a substantial increase in home sales this year. 

For more information on purchasing property, please contact Aaron Novello of The Novello Group today!