Mortgage availability rose in November, showing signs that the credit box is gradually opening for borrowers, according to the Mortgage Bankers Association's Mortgage Credit Availability Index. The index rose 1.2 percent to 114.6 last month; an increase in the index indicates the loosening of credit.
Still, some banks are adamant that they aren't loosening up. "You won't see us start to expand our credit much past what we've done today," Bank of America CEO Brian T. Moynihan said at a New York investor conference last month. "I don't think there's a big incentive for us to start to try to create more mortgage availability where the consumers are susceptible to default. … I know that doesn't sound good for an instant housing recovery and faster housing markets, but it's actually good because, in the long-term, it keeps housing more fundamentally based."Housing analysts are optimistic that lenders are showing signs of loosening up the tight credit that has sidelined many potential buyers in recent years. Freddie Mac and Fannie Mae's latest move ushers back in loans with 3 percent down payments, which some expect to be a boon for attracting more first-time home buyers to the market.
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