The WSJ reports that WSJ on Tighter Lending the top mortgage lenders are rejecting more home buyers than ever. Last year the top ten lenders rejected 26.8% of all applications up from 23.5% in 2009. This, in turn, is negatively impacting the already fragile housing market.

The article reports that some of the blame accrues to FNMA and Freddie, the two government-backed entities that ultimately set the standard for 90% of mortgage loans. These entities are placing ever tightening restrictions on lenders. (BTW, the article ignores the negative impact of ‘Price Adjustors’ imposed by FNMA and Freddie which can add two and a half points to the origination cost of a mortgage for a borrower with a 679 credit score putting down a twenty percent down payment.)

As I have previously stated, I personally find the 26.8% rejection rate appalling. My average approval rate is above 98%. 

You be the judge: where should you send a client or friend that is looking for a mortgage for their home purchase or refinance?