Dollars and Jens
Tuesday, March 20, 2007
credit crunching in mortgages
I'm 98.6% sure this article, headlined "Banks Pick Up Where Fed Left Off, Tightening Credit", isn't intended as parody:
Countrywide Financial Corp., the biggest U.S. mortgage provider, last week stopped taking applications for no-money-down loans from risky borrowers without proof of income.Boy, looks like they're really getting tough.
It's reasonable to note how forces other than the fed (directly) are affecting financial tightness, but this article doesn't make a particularly compelling case on whatever case it's trying to make.
"The environment has improved for borrowers that have good credit," said Greg McBride, senior financial analyst at North Palm Beach, Florida-based BankRate.com, which tracks consumer interest rates. "It's the best it's been in months. And that's the majority of borrowers."Meanwhile, interest rates even for BBB corporate debt are lower than they were at the meeting last June, lower than at the meeting last August, and even lower than the last time the FOMC met at the end of January. If the markets are finally acknowledging the existence of credit risk, they're not getting carried away with it yet.