Mortgages become harder to get
Most consider the then-out-of-control housing sector to be one of the root causes of the financial crisis, so it's no surprise that mortgage lending has seen substantial change.
Today, banks are stricter about their credit requirements, says Ed Conarchy, a registered investment adviser and a mortgage planner with the Cherry Creek Mortgage Co. based in Gurnee, Ill.
"It wouldn't be unheard of getting something done in the mid- to high-500s before the crisis," Conarchy says, referring to the credit score necessary to secure a mortgage. "Now, once you slip below 620, it's really hard to do, and when you're in that 620 to 680 area, it's not as easy as it once was."
New regulations put in place by the Consumer Financial Protection Bureau, requiring lenders to make sure borrowers have the ability to repay a mortgage loan before they provide one, also have changed the way mortgage brokers operate.
"We could wing it a lot easier in the old days," Conarchy says. "That's not the case anymore. The client needs to have all his paperwork together."
Still, forcing brokers to sweat the details isn't necessarily bad, Conarchy says.
"Everybody says it's tougher for lending nowadays. I disagree," he says. "I've been doing this for 23 years. I think lending is just back to where it was before. You need to have good credit, and you need to have income."