ASBURY PARK, N.J. (3/7/12)--Many of the nation's largest banks aren't lending to homebuyers, even though they are well-capitalized, says a New Jersey Press Media investigation cited in an article in Sunday's Asbury Park (N.J.) Press.
The article, "Mortgage Loans Prove Hard to Get," is the first of a two-part series on banks' tight lending despite their position of "sitting on a mountain of cash they've accumulated since the recession." The article was cited by the New Jersey Credit Union League in the league's newsletter, The Daily Exchange (March 5).
Instead of lending to homebuyers, big banks are busy refinancing existing mortgages, paying off debt and cutting expenses, even after receiving bailout money from taxpayers, the article said.
The new lending environment is a turnaround from five years ago, when banks made mortgage loans to nearly everyone, said Park Press. Borrowers looking to buy a home in the current environment are finding banks scrutinizing every financial move they make. The changes have slammed the brakes on the housing market, the article added.
It cites examples of New Jersey residents with good income, good credit and qualifying down payments who are encountering difficulties in the mortgage-qualification process.
The league reported that the article also said banks have seen mortgage lending drop because of tighter restrictions from lenders and government agencies, less demand from potential buyers and low interest rates, the league reported.