Standards are tightening while some mortgage companies are going under reports an insightful article in today's WSJ Online.
Perhaps the most impressive news is that several residential & commercial mortgage companies have all but closed their doors for business. American Home Mortgage Investment Corp., which stopped making loans earlier this week, said late yesterday it would cease most operations, slashing its work force to about 750 from more than 7,000.
Less shocking but still noteworthy is the rate jump seen in the residential markets where Wells Fargo & Co. is charging 8% for a prime jumbo 30-year fixed-rate loan that carried a 6 7/8% rate late last week.
The fright among investors is forcing lenders to go back to more-conservative practices that were the norm before the housing boom of the first half of this decade. Many now are focusing on loans to borrowers who are willing to document their income, can make a down payment of at least 5% and have a history of paying bills on time.
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