Home lenders cut flow of risky loans
David Radley, a sound engineer, wants to borrow $180,000 to buy a house he rents in Appleton, Wis., but he can’t afford a down payment and has a low credit score.
Finding such a loan was a snap until recently. Now mortgage broker John Waite of Full Resource Lending says Radley needs to pay off old bills and put down at least 5 percent to qualify. Though Waite’s motto is, “We say yes’ when the banks say ‘no,’ ” he is saying “later” more frequently these days.
Radley’s plight reflects the turmoil in the business of packaging mortgages into securities that are sold to U.S. and overseas investors.