Mortgage Denied?

I keep hearing on the news that lenders are tightening their standards for approving mortgages, but no one I know personally has been turned down in the past couple of months.  Have you personally seen the lenders getting more stringent or seen people having their applications denied?

I don't know this for a fact but I would bet when the "word" is spread that lenders are tightening their standards that really means there aren't as many mortgage brokers in existence as there were pre-meltdown. In other words, the weak sisters who opened their doors during the boom days, didn't have the financial wherewithal to weather the lean times.

Another meaning for tightening standards is that lenders are reverting back to the original guidelines on income, debt to income ratios, verification of employment, verification of deposits, credit scores, etc. On the surface, the lending business seems fairly easy to understand. However, once you've penetrated the facade and understand the jargon, you learn how easy it is to say one thing but do/mean another.

Just my 2¢.

i think this might be possible if the people that want to get mortgage have other problems that might be the cause of not being accepted....i think there are new brokers that have other conditions and they are the once that have so strict rules because they haven`t got the necessary experience

The mortgage "underwriters" are the ones tightening the belt-straps - and in many cases, these are the guys who tell the banks who they can and can't lend to. They've adjusted their servicing ratios and increased the allocated costs of living to help reduce the maximum borrowing capacities.

This doesn't mean it's impossible to get a mortgage - just not quite as easy as it once was

Those who read know well my situation. I spoke with a Senior Debt Consultant at a major settlement company ( not the one making unauthorized posts). He advised me to try and get my first and second mortgage combined ( remember my credit is shot). He states some of the banks have foreclosed on so many homes that even with pre-bankruptcy credit they are looking at financing some people because they truly can't afford to foreclose on anyone else. I spoke with the lender on my second who didn't rule it out other than my ongoing problem, the ex wife is on the loan. Reality or not ? TBD Something has to give.

I think people who already have mortgages, awsheet, are actually in a good position at the moment.  Because the lenders are struggling with so many foreclosures, they're willing to work things out with their current borrowers to help them avoid foreclosing as well. You may be able to combine your two mortgages, and then negotiate a "hardship" deal, with lower interest and lower payments for 6 months to a year.  I know of a few people who have done this in the past couple months.

If your lender does work with you- make sure that you work hard to either make additional money or stretch your current income by paying off a smaller bill or something so that when the hardship/lower payment period ends, you can go back to making your regular mortgage payment on time.  (it's easy to forget that the lower payments are only temporary and so you adjust your spending to reflect the lower payment... then when the full payment comes due you're in trouble again!)

Even in previous decades, I've heard anecdotes from bank employees of people trying to drop off their keys to their house at the bank because they thought the situation was hopeless, but in some cases the banks wanted them to keep trying to make it work.

I realize that there are many unfortunate cases where there's been no choice lately.