Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) Pressed on Mortgage Standards

With tighter mortgage standards put in place after the mortgage debacle, Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), JPMorgan Chase (NYSE:JPM) and Citigroup (NYSE:C), along with regulators, are being pressed by the National Association of Realtors to ease the rigid underwriting standards.

The total amount of mortgages by the big four banks dropped in 2010 to $916 billion from $1.04 trillion in 2009, a 12 percent decline.

While the National Association of Realtors asserts higher lending standards as the cause, others like Ron Dvari, CEO of New Oak Capital, see it continuing to be a hangover in prices from the housing bubble.

He said, "The best explanation for the total size being down are home prices for these areas being down significantly."

In other words, the housing bubble is still correcting, and homes are still overvalued.

Why should home buyers pay for the mistakes and irresponsibility of others who were buying homes to flip and make a quick buck. Individuals also entered into the home market for the same reason; living in the home for a short time while they expected the prices would go up.

A large number of homes are still priced too high, and until they come down to market levels, buyers aren't going to acquire them.

Standards are the problem, high prices are, and lowering lending standards just to pacify the NAR and make more money for their Realtors is a poor reason to lower lending standards again.