It is getting tougher to procure Virginia Mortgage Loans Virginia Mortgage loans fell sharply last year. Two factors contributed to this fall. Firstly, the demand for loans was weak. Secondly, the tight credit standards had discouraged people from seeking mortgage loans. The increase in the number of foreclosures also contributed to the non-availability of loans. Federal reports revealed neighborhoods hit hardest by foreclosures saw a steep decline in lending. During the housing boom, these areas saw an unprecedented increase in subprime and other forms of mortgages. Distressed neighborhood had witnessed a rise in buyers who do not use their homes as primary residences. This has led to a drop in lending. Low income borrowers have mostly been crowding these neighborhoods. With fall in high income loan seekers for these areas, analysts feel, decline in mortgage loan offers is inevitable. They predict that the scenario can only turn grimmer. The findings also reflect on the fact that Virginia mortgage loan seekers are facing huge difficulties in refinancing their mortgages. Most homeowners couldnâ€™t cash in on the low rate offers because of inadequate equity and tighter lending standards compared to when they sought their loan. Analysts feel that had home equity not been a factor and underwriting standards been less tight, about 50 percent more homeowners in Virginia could have availed refinance. Federal regulators are planning to bring about changes that would enable borrowers with loans backed by Fannie Mae and Freddie Mac to refinance even if their homes worth is less than what they owe. The study throws light on how markets depend heavily on government-backed mortgages. In 2010, federal housing loan agencies, sanctioned loans for more than half of home buyers. The low down payments of just 3.5% have drawn people to these agencies. In contrast, Fannie Mae and Freddie Mac financed just one-quarter of the total home purchase loans and more than half of refinances. It is feared that high cost housing markets in Virginia is all set to witness a similar trend. This is because federal housing loan agencies have limited the size for government-backed loans in these areas.