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Speaker: Nick and Shanna Tibbet assumed spelling rented this Southern California house to save money, planning to buy within a year.
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Speaker: That'll get it going.
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Speaker: It's now been more than three. How frustrating is this for you.
>> Shanna Tibbet: It is frustrating, and it is surprising. We thought it was gonna be easier than this and --
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Speaker: Nick has a steady job, an excellent credit score above 700, and $35,000.00 for a down payment. Three years ago, that was more than enough for a home costing about $400,000.00. But now many banks require 20 percent down, so the Tibbet's cannot get a conventional mortgage.
>> Nick Tibbet: The government keeps rah-rahing, saying things are better, and they're really not. They're still horrible.
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Speaker: Mortgage broker, Jeff Lazurson assumed spelling, says before the meltdown, nine out of ten clients got a loan. Now, one out of every 2 is denied.
>> Jeff Lazurson: What we do is we torture borrowers with paperwork, and the loans seem to not ever get done.
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Speaker: He's not kidding. This is a mortgage application from 2006; basically some pay stubs and bank accounts. And this is now the amount of paperwork it takes to get a mortgage today. Banks are trying to avoid a repeat of the loose lending practices that helped cause the meltdown in the first place. In 2005, 32 percent of mortgages approved were considered risky or subprime. This year, it's less than one percent.
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Speaker: We want to know, down to your pulse rate, your DNA, and your blood pressure, if you can handle this loan.
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Speaker: The credit squeeze is also putting the breaks on auto loans. In the first quarter of 2008, 5 million loans were made. That dropped to just 3.5 million this year. And credit cards are increasingly what's not in our wallets.
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Speaker: I just cut them up. I don't use them.
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Speaker: In 2008, consumers had an average of 3.1 credit cards. Now, it's down to 2.8 as fewer Americans want them, and banks tighten credit lines.
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Speaker: I think the day when unemployment begins to decline and house prices begin to rise is the day that we'll start to see more credit flowing out to consumers.
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Speaker: You saving your money, Olivia?
Baby babbles
>> Nick Tibbet: In the meantime, the Tibbets will keep making deposits. Ben Tracy, CBS News, Lake Forest, California.
==== Transcribed by Automatic Sync Technologies ====
