Our friends at CoreLogic have asked two good questions in a blog this month. First, why so few loan applications by borrowers with low FICO scores today compared to 10 years ago? And, if credit is tighter today than then — as it is, by all testimony — why has the rate of decline of applications fallen?
- There is a new CFPB definition of “application,” which requires six pieces of consumer information.
- All over the country we have crazy conversations in which the lender avoids income or address, yet runs a credit report.
- Another element has changed since the heat of the bubble: In 2005 we had a zillion ways to put a loan together. Today's product array is much more limited.