Housing experts comment on the industry’s slow recovery, and tight lending and  underwriting standards are a popular culprit.

The summer sales season is over and activity in the housing market has, expectedly, begun to take a dip. However, some analysts are saying the recent lull in real estate is less a reflection of the changing of the seasons, and more a result of tightening lending and underwriting standards.

In an interview with the Financial Times, Wells Fargo CEO John Stumpf, leader of the nation’s largest mortgage lender, confirmed that the bank was unwilling to lend to lower-income borrowers or those with low credit scores, confirming a statement Federal Reserve Chairwoman Hanet Yellen made in June admitting that it is difficult for any homeowner who doesn’t have pristine credit these days to get a mortgage.

Fewer Mortgages

All throughout the industry, lenders are tightening their belts and hopeful borrowers are finding it more and more difficult to secure legitimate lines of credit. In a July conference call, James Dimon, CEO of J.P. Morgan Chase, revealed that the lender’s volume of loans insured by the Federal Housing Administration was “way down” for the year.

Lawrence Yun, chief economist for the National Association of Realtors, later added to Dimon’s statement, saying that 15 percent more mortgage applications are being denied this year than in 2000. Still, he points out, the number of denials falls within “relatively normal” range for the housing market.

Looking for Government Help

According to lenders, it’s not a matter of being unnecessarily stringent, but a safeguard replacing inadequate government safeguards.

“We want to help the consumers there, but we can’t do it at great risk to J.P. Morgan,” Dimon said. “So until they come up with some kind of safe harbors or something, we’re going to be very, very cautious in that line of business.”

As the industry presses onward into 2014, many paint the outlook as bleak.

“A robust recovery is not occurring,” Yun said. “We are projecting a slow recovery in home-sales activity because of the current tight underwriting standards.”

Additionally, the Mortgage Bankers Association, according to Market Watch, predicts that mortgage-loan originations will further drop 12 percent this year.

Pending action from government regulators, the recovery is expected to continue crawling forward.