What's it take to get a loan in this town?

This is good article from CNN Money

Banks are requiring higher margins on loans to help pay for the additional cost of making sure a loan meets investor and regulatory requirements, said Bill Dallas, chairman of Skyline Financial, a mortgage banking firm in Calabasas, California.

"And no one is adding staff because they know this will end and they are trying to get loans done with 3 people where they need 23," he said.

"It's almost like DEFCON 1," he added, referring to a U.S. military measure for alarm. "We are on heightened state of alert in the mortgage industry and it will end when there is no volume" and banks will have to be more competitive, he said.

Standard 30-year fixed mortgage rates last week hit their lowest levels on Freddie Mac's records, hovering at 4.27 percent for a decline of more than half a percentage point since May. With that drop, some 90 percent of fixed-rate 30-year loans have at least a 0.4 percentage point saving if they overcome other hurdles, said Scott Buchta, head of investment strategy at Braver Stern Securities in Chicago.

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