In an editorial this Sunday, The New York Times blasted those who warn of a new foreclosure crisis stemming from the recent
loosening of credit standards for cash - strapped borrowers.
As long as solid job creation continues, a gradual
easing of credit standards even with moderately higher mortgage rates should support steady demand and sales continuing to rise above a year ago.»
One of the arguments that I've made is that we had the mother of all housing bubbles, we had a vast
erosion of credit standards, we had really easy money, we had the Bush tax cuts plus the Iraq war, and all that got us in the precrisis period was adequate growth.
Olsen attributed the decrease in large part to the easing
of credit standards over the last few years, as well as a generally stronger set of applicants since the housing bubble burst.
It has been expanded and updated to account for changes in the lending industry over the last few years, such as the general
tightening of credit standards.
«Certainly, some tightening
of credit standards was an appropriate response to the lax lending conditions that prevailed in the years leading up to the peak in house prices.
For a crash to occur, there would need to a sudden drop in demand, such as a fairly quick rise in interest rates or significant a tightening
of credit standards.
The FHA loan program is one of the most lenient, in terms
of credit standards.
A cash - out refinance is possible as long as the property meets the «four S's»
of its credit standards.