The mortgage lending market is self correcting, with lenders tightening underwriting guidelines and shifting to more secure mortgages, according to the latest quarterly index compiled by a University of Pennsylvania expert on lending. Susan M. Wachter, professor of Real Estate and Finance at the University of Pennsylvania's Wharton School, said that despite problems in the subprime mortgage market, "the sky isn't falling." In a press release announcing the release of the latest U.S. Mortgage Payment Index, Wachter said "consumers have more options than ever to get into a good mortgage and out of a bad one." Wachter said lenders have tightened underwriting guidelines and financed more loans for people with credit scores of 650 or higher. More than 60 percent of broker-sold mortgages in January were prime, she said, up from 50 percent in 2006. Still, 89 percent of borrowers with one-year adjustable-rate mortgages were able to refinance into long-term, fixed-rate loans ...
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