Hey, AJ, believe the anecdotal evidence coming from the trenches or don't believe it, as you wish.

From today's industry newsletter:

As 30-year rates hit historic lows, some borrowers are hoping that lenders will be loosening their underwriting standards and that it will be easier to qualify for a mortgage. They're hoping in vain: industry data shows that controls have gotten even tighter. I don't remember where I saw the stat, but the average credit score on new loans closed in August 2012 was 750, nine points higher than a year prior. Fannie and Freddie borrowers' scores averaged 763 for that same period, and considering that fewer than 22% of Americans have credit scores over 749, there are a lot of people out there who are highly unlikely to qualify for a loan. Lenders also appear to be requiring larger down payments, with the average Fannie and Freddie borrower putting down 21% (to put that in context, the median down payment in 2005 was 2%.) Originators hope that eventually lenders probably will relax about upcoming regulation, be less fearful about costly buyback demands from the GSEs, and strip away some of their extra credit-risk fees. The key word here, though, is "eventually."

I continue to hear that the underwriting pendulum has swung too far, excluding common sense borrowers, self-employed borrowers, and loans being held up for requests on explanations for a $100 deposit four months ago. And borrowers are in a tough spot. An individual living on a fixed income over the last 20 years (i.e., from the end of 1991 to the end of 2011) would have suffered a 39% loss of purchasing power over the 2 decades using the CPI as a gauge of his/her inflation.