Due to tighter standards from Frannie Mae and Freddie Mac, getting approved for a mortgage is getting more and more difficult for average Americans. People are getting denied left and right, sometimes for things beyond their control.
Banks are reluctant to make loans without the Fannie and Freddie guarantee, and loans backed by them account for just about every mortgage written these days.
In 2009, the agencies lifted the minimum credit score that borrowers must have from 580 to 620. That's probably for the best.
But they've pushed through a host of other requirements as well, and that means real estate deals don't get done, even for some relatively low-risk borrowers.
"You can have one Fannie/Freddie guideline you violate and that gets you rejected," said Alan Rosenbaum of GuardHill Financial.
A quarter of all mortgage loan applicants get denied for loans, according to the Federal Reserve. Many other potential homebuyers never even try to get loans, said Jerry Howard, president of the National Association of Home Builders.