Released: August 19, 2007

What mortgage credit crunch?

Source: Eileen Ambrose, Baltimore Sun (Free Registration)

From the headlines, you might think that lenders will never offer another mortgage. If you’re in the market now for a loan, take a deep breath. It’s not that bad.

Yes, the days when consumers with iffy credit and no proof of income could buy a house with no money down are gone. With rising defaults in the subprime market, lenders are returning to underwriting standards of five years ago - before the hot real estate market gave rise to interest-only and other exotic mortgages. And the landscape is changing quickly; mortgages and loan terms being offered just a few weeks ago are no longer available.

“It’s a little scary, but you kind of have to take it with a grain of salt,” says Neil Sweren, president of AllyMac Mortgage Services in Owings Mills, MD. “There is plenty of money out there, even for those people with less than perfect credit.

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