With interest rates falling to the lowest level on record, this should be a banner time for households in search of a new mortgage.It isn’t. Mortgage availability has tightened sharply as lenders impose tougher income, credit-score and down-payment conditions and drop some loan types altogether, such as home-equity lines of credit.The economic shock from the coronavirus pandemic explains some of this credit crunch. But the economic factors have been exacerbated by policy decisions in Washington, industry officials say.As part of its March relief bill, Congress let homeowners suspend mortgage payments for up to a year but provided no way to pay for this, potentially saddling lenders with the burden.
We are seeing this in all sectors. Collateral values will be dropping.