Risky Business

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The pulse Tightening the Belt Credit standards continue to improve as the market pulls away from the "bubble era" and the subsequent crash, according to the LPS January Mortgage Monitor. credit score 737 credit score credit score credit score 743 745 747 2010 2011 2012 credit score 705 credit score credit score 705 716 2005 2006 2007 2008 credit score 699 2009 non-current at 12th payment: 2.9% non-current at 12th payment: 2% 4.8% non-current at 12th payment: non-current at 12th payment: 8.7% 18 | The M Report non-current at 12th payment: non-current at 12th payment: 9.2% 7.4% A non-current at 12th payment: 1.7% non-current at 12th payment: 1.5% s the government continues to cut the fat from America's proverbial lending waistline, lenders are tightening the belt around credit standards. Luckily for them, recent data shows that lenders today are seeing borrowers with near "pristine" credit characteristics, so some of the fears that arose from the economic crisis are being allayed by the news. Lenders partially have themselves to thank, as many are reticent to hand over cash to borrowers who pose even slight risk. Some housing advocates worry that the credit standard is shutting out aspiring homebuyers who are working hard to raise their credit scores, but still don't quite qualify for a loan. On the flip, evidence shows an inverse correlation between a borrower's higher credit scores and non-current payment status. In 2005, when the living was easy for most, the average origination credit score was 705 and the non-current payment status after a year was 4.8 percent. When the bubble popped, scores dropped to 699 and non-payment shot up to 8.7 percent. Now, scores have risen to 747, but non-current payments are down to 1.5 percent.

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