Due to the world recession, banks are becoming careful on where to release their money. House prices are falling, and if banks are not cautious, they can lose huge amount of investment due to the frequency of repossession. Unfortunately this also reflected negatively on fair credit unsecured loan.
Because of the recession that is occurring right now there is a higher chance that people will fail to pay their mortgages and loans. What banks are aiming for nowadays is to increase the number of savers instead of lenders. Although banks would like to invest more, economy does not allow them to do so; this is because there is a shortage of credit.
What is worse is that they now have less money to lend; they have to keep the money inside to keep the bank afloat and avoid risky investments for the moment. Some banks stop lending altogether so that they could control the market. They in eventuality want to repossess properties. If they get the property back, the situation does not change.