Mortgage lenders are restricting credit to a wide range of borrowers amid rising home loan defaults, analysts say, a move likely to prolong the housing slump and sap economic growth.
The credit squeeze has turned into a credit freeze in recent days, as Wall Street has shunned mortgage-backed securities.
That's accelerated lenders' push to raise rates on some mortgage products, scrap some types of loans altogether and more closely scrutinize borrowers.
"The mortgage spigot is closing. Even prime borrowers are having difficulty now," said Mark Zandi, chief economist at Moody's Economy.com.
IBD is one of the most bullish publications in the financial press. When they start to write about a credit contraction, you know we're go a pretty significant tightening going on.