In yet another sign the recovery is hitting a wall due to strict lending standards: in February monthly mortgage originations dropped to the lowest level in at least 14 years as credit standards have not shown signs of loosening, according to latest Mortgage Monitor Report from Black Knight Financial Services.

“February’s data showed the continued trend of declining origination activity we’ve been observing since mid-2013, with monthly originations falling to their lowest recorded point since at least 2000,” said Herb Blecher, senior vice president of Black Knight’s Data and Analytics division.

“In spite of this decline, residential real estate sales have remained strong due at least in part to investor activity and the fact that cash sales account for almost half of all transactions. In addition, while total transaction levels were flat on a year-over-year basis, traditional (or “non-distressed”) sales were up almost 15 percent from last year as the share of distressed transactions continues to decrease.  Credit standards have shown little sign of easing — only about 30 percent of 2013 loans went to borrowers with credit scores below 720 — which indicates that significant opportunity to expand mortgage origination activity is available, if risk appetites allow.

http://www.realestateeconomywatch.com/2014/04/new-mortgages-fall-to-14-year-low/