Default rates are lower now than they were before the recession - and the Urban Institute believes this means that borrowers with lower credit scores are not able to receive home loans.

In an analysis of Fannie Mae and Freddie Mac-backed mortgage loans made in the US between 1999 and 2015, the Urban Institute has found that mortgage default rates have been lower in the past five years than they were in the pre-recession years. Less than 2% of mortgage loans made between 1999 and 2003 defaulted after 10 years, while less than 1% of loans made between 2011 and 2015 have defaulted so far, and 12-13% of loans made between 2006 and 2007 defaulted within 10 years.

The Urban Institute ascribes these low default numbers to stricter credit standards in the post-recession era. Between 2011 and 2015, 69% of mortgage borrowers had FICO scores of 750 or above, while only a third of borrowers fell into the same category between 1999 and 2003.

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