‘Closed loan credit scores continued tumble, while DTI rose in October’ promised the headline from Ellie Mae this month.

Eagerly I scanned through the data, hoping at last to see a relaxation of the squeaky tight lending standards for purchase loans, enough to really mean something to the millions of young buyers trying to maneuver their way through student loan debt, ridiculously lean inventories of homes in their price ranges, rapacious rent increases, and rates and prices rising in tandem like two genies out of the same bottle.

Alas, it was not to be.

The median FICO for all loans fell one point and for FHA purchase loans—the kind more first timers choose—fell two points, to 687, about the level it was in April when the home buyer season began.  Over the past six months, when most houses are bought and sold, the media FICO was two points higher.  Last year at this time it was four points lower.  FICOS for FHA buyers are actually significantly higher.

Right about now an Ellie Mae PR person would point that FICOS for FHA refis are only 633—thirty points lower than purchase loans.   I would have to remind them that one has to own a house before you can refinance it.  The social and economic problem facing the nation is the decline first time buyers, not the decline in refi business for lenders.

And by the way why are refi FICOs so much lower than purchase FICOs anyway?