Nearly Pristine Credit Required for Mortgage

New York, NY, July 11, 2011 -- Tighter lending standards are making it increasingly difficult for potential homeowners to secure a mortgage, despite historically low interest rates, according to a story in the Wall Street Journal.

Loans are generally available to only those consumers with very high credit ratings.

Fannie Mae and Freddie Mac, which essentially finance three quarters of all mortgages, this year have issued 75% of their loans to people with credit scores of 750 to 775. Before 2005, less than 5% of loans went to people with those credit scores.

From 2003 through 2006, 82% of Fannie Mae mortgages were for borrowers with a score between 700 and 750.

A perfect credit score is 800, and today the median credit score is 711, so effectively more than half the population is being locked out of the housing market.