FOXNews.com - Federal Reserve Finds Banks Tightening Mortgage Lending Standards - Real Estate News | Mortgage Information | House Hunting
At this point it doesn't look like the specific changes affecting lower-risk borrowers are that dramatic. But the high-risk borrowers do seem to be encountering significant hurdles. Until recently many builders were acting as mortgage banks and making many of these risky loans that have led to foreclosures. Read that Business Week article I referenced below. I thought the S & L meltdown taught people that developers shouldn't be able to lend people money to buy houses from them, but I guess history had to repeat itself.

WASHINGTON — The nation’s banks, in response to the subprime lending mess, are making it tougher for high-risk borrowers to get mortgages they can’t afford, and are moving to tighten lending standards across the board — even for borrowers with good credit. The Fed said it found that 56.3 percent of banks responding to a survey reported that they had tightened their lending standards for subprime mortgages, loans offered to borrowers with weak credit histories. But the tightening of the mortgage-lending belt is pinching more than just the less-than-creditworthy loan seekers. The Fed survey found that even on prime loans, which offer traditional payment options such as 30-year mortgages to borrowers with strong credit histories, 14.3 percent of the banks responding said they had tightened their lending standards "somewhat."