Mortgage brokers, stung by a surge in defaults, are at last begining to think about risk. Suddenly, they have learnt the power of that long neglected word - NO. Yes, brokers are beginning to turn undesirable borrowers down. They should have been doing five years ago, but better late than never. Borrowers who can't pay back loans should not get loans. When they are turned down, they win (no trauma of foreclosure or bankruptcy) and the bank wins.

So lets here some more negative responses from brokers. It is what America needs right now.

June 13 (Bloomberg) -- Josh Tullis, who in his eight years as a senior loan officer rarely felt compelled to reject a first-time home buyer's mortgage application, is sending people away empty- handed in 2007. Tullis's latest clients are a married couple that banks ought to love. Between them they make $70,000 a year and they've been renting the same apartment for three years with zero late payments, he said.

Lenders won't approve them because they don't have enough money in the bank, said Tullis, Virginia sales director at A. Anderson Scott Mortgage Group in Falls Church. With mortgage companies cracking down due to rising subprime defaults, Tullis needs them to sock away two months of payments for the $500,000 townhouse in Fairfax. ``Six months ago, these folks might have qualified, a year ago, definitely,'' Tullis said. ``It's a lot, lot harder than it used to be for first-time home buyers.''

Subprime mortgage lenders have tightened credit guidelines so much they're squeezing about 500,000 first-time buyers out of the market, according to the National Association of Home Builders. A decline of that magnitude would reduce sales of new homes by 4 percent and sales of existing homes by 7 percent, and deepen the worst housing slump since the Great Depression.