Lenders are also requiring higher incomes from home buyers seeking mortgages, and often larger down payments.

People seeking mortgages on buildings and apartments in which the building has a low ratio of owner-occupants may still have a tough time.

The central bank gave regulatory approval for commercial banks to offer bigger interest rate discounts for home buyers seeking mortgages.

The pain is borne by would-be homeowners seeking mortgages or entrepreneuurs in need of loans.

Executives of other banks also reported increased interest in recent months from borrowers seeking such long-term mortgages.

Mortgage approvals that were given earlier this year have since expired, requiring the families to seek new mortgages.

Many properties and buildings here are untitled, which broadly means that owners cannot seek mortgages or get title insurance on land.

Investment banks sought more mortgages to form more CDOs to continue the food chain.

Ms. Cohn said the move would have particular impact on customers seeking mortgages of $400,000 to $1 million.

Ordinarily, buyers of dilapidated houses must seek second mortgages and pay high rates to finance renovations.