ASBURY PARK, N.J. – An article appearing in the Sunday Press this weekend cites the findings of a NJ Press Media investigation that many of the nation’s largest banks, which are well capitalized, aren’t lending to homebuyers. The article in the Sunday edition of the Asbury Park Press titled “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.”
Instead of lending to homebuyers, the article points out, big banks are busy refinancing existing mortgages, paying off debt, and cutting expenses, even after the billions of dollars in bail out money they received from taxpayers.
The new lending environment is a complete turnaround from five years ago when banks were giving out mortgages to almost anyone, says the Press. Those looking to buy a home in the current environment have banks scrutinizing their every financial move. “The changes have slammed the brakes on the housing market,” says the Press.
The article goes on to cite examples of New Jersey residents—with good credit, good income, and qualifying down payments—being put through the ringer in order to get qualified for a mortgage.
According to the article, banks have seen mortgage lending drop due to tighter restrictions set by lenders and government agencies, less demand from potential buyers, and low interest rates.