Housing recovery tempered by gun-shy banks

Rates are low, demand is up, but the housing industry’s recovery is slower than what it could be thanks to banks overly cautious in their lending practices after paying government fines and losing lawsuits associated with their loose lending practices in the runup to the housing crash, Real Clear Politics reports.

Loans backed by Fannie Mae and Freddie Mac, which provide federal mortgage guarantees, had an average FICO credit score of 720 before the bubble, the article noted. Now it’s 760, which, along with higher down payments and more complicated loan applications, has slowed housing’s upward momentum.

Source: Real Clear Politics