Ali and Mariluci Sleiman wanted to buy a house. The couple, who run a day care service inside their first-floor rental apartment, had outgrown their space in Taunton, a small city in southern Massachusetts. They also wanted to avoid answering to a landlord who might complain about 10 little kids running around all day. They were “desperate to buy a home,” Ali told me. And with good credit and $46,000 in joint income, they hoped they wouldn’t have a hard time getting a loan. So they were disappointed when the bank rejected their application, and then when a local credit union did too.
Six years ago, a deluge of mortgage lending sparked a credit crisis that led to the worst financial meltdown since the Depression. Now, after years of chastened retreat, we are in the midst of a lending drought.