According to the Federal Reserve Bank of New York’s consumer credit panel, looking at the first quarter numbers, more than half of mortgages have gone to those with credit scores over 760. Conversely, those with scores between 620 and 659 received only 4.6% of the dollar volume of mortgages in the quarter.
In the wake of the housing crisis, some wonder whether banks have now become too risk-averse. This has led some to question the worth in even applying for mortgages:
Figures from property-data provider CoreLogic show that home-purchase mortgage applications from borrowers with credit scores below 640 fell to 6 percent in 2015, from 29 percent in 2005. In other words, lower-rated borrowers aren’t even applying. The reasons for that are puzzling, said Frank Nothaft, CoreLogic’s chief economist.