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Lending Standards Have Barely Budged in the Last Year

by Peter Thomas Ricci

We keep hearing from trade groups that lending standards remain high, and the data would seem to support that claim.

It’s arguably the most common motif among housing trade groups today – lending standards remain high, and are limiting housing’s comeback; indeed, it’s rare to get through any research by NAR or the NAHB without reading at least one reference to the tight lending environment.

With that in mind, we combed through the last year of data from Ellie Mae, and though lending standards have technically fallen in the last year, they remain quite high. In fact, between Feb. 2013 and March 2014, the average FICO score for accepted loans fell a whopping 3 percent from 749 to 725, while the average LTV rose just 3 percentage points. So though lending standards are loosening, they’re do so slowly.

Check out our graph below for a clearer picture:

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