Mortgage Bankers Association

Banks Are Back To Basics

In 2004 to 2005, financial institutions were swamped with foreign funds. These caused them to lower their guards on mortgage requirements. Due to easy loans, many succumbed to home buying mania, which pushed prices to artificial record high. Then in 2007, the bubble busted- due to increased variable interest rates, and too high acquisition prices. And in addition to these, many were already high risk borrowers, even during the signing of contracts.