Mortgage credit availability in March fell to the lowest level in five years, according to a survey by the Mortgage Bankers Association.
Lenders cite a large drop in liquidity, as investors in jumbo mortgage-backed bonds pull back. Jumbo loans are those valued above the conforming loan limit of $510,400.
It is also scaling back its own retail originations of non-conforming refinances and conforming high-balance loans. Mortgage servicers are being besieged by calls from borrowers requesting the government's forbearance program, wherein borrowers can miss up to a year's worth of payments which will then have to be paid later. The servicing industry has been begging the Federal Reserve for some kind of liquidity facility to help them make their payments to bondholders, but so far only Ginnie Mae has done that for FHA loans.
Several non-bank lenders are also raising minimum credit scores for FHA loans, which are generally used by borrowers with lower scores and lower down payments. FHA itself has not changed its guidelines.
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