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? I don't get it.... Foreclosure = bad credit. Bad Credit = No Loan

If there are so many people displaced because of the economy AND so many houses have been foreclosed on AND the new credit scoring system is tougher than EVER...... how are regular people gonna be able to buy a house again when their credit was ruined by the economy in the first place?? (I'm not talking about someone who got a $1Million loan on $30K a year income - I"m talking about regular middle class people who got slammed by the economy). It all seems like a huge pit of sticky mud to me.... And I also read that the 'bail-out' for foreclosures requires a person to be current on their house payment to qualify for the help..... if you're current, then you don't need the 'bail-out', but if you're behind and you DO need it, then you don't qualify. Am I the only one who sees this all as the biggest blunder ever??

 
PaceMyself

Asked by PaceMyself at 7:59 AM on Mar. 7, 2009 in Politics & Current Events

Level 5 (75 Credits)
This question is closed.
Answers (22)
  • I do not agree with the mortgage bailout for the simple reason that it is the taxpayers money that foots the bill for this and not all the taxpayers are able to benefit from it. For those that did not get in over their heads or who own their homes and property, it is very unfair that someone that wanted it all gets the help that we pay for. Remember, the government has no money. The money they spend is ultimately the peoples money. It is very unfair to put the people that did not buy these ridiculously high priced houses and mortgages into the hole. The ones needing the help should have to first work with the lenders, who in turn should be forced to work with the borrower, before any deal is struck with our money.
    foreverb3

    Answer by foreverb3 at 9:47 AM on Mar. 7, 2009

  • If someone got in over their head, then that is THEIR problem to fix. It should NOT be the government's responsibility! Too many people bought more home than they could afford...and when I say afford, I mean mortgage payments not exceeding 25-33% of your NET (take home) income!

    The reason your mortgage payments should not exceed more than 1/4 to 1/3 of your income, is so that if you were to lose your job, if you faced a major medical illness or the unexpected death of the primary breadwinner, that you SHOULD have managed to SAVE at least a few months worth of "rainy day funds" that would allow you time to regroup!

    The problem is that people sought mortgages even though they already had sketchy credit ratings, and if they bought the right amount of house, then they went overboard on material things (cars, flat screens, remodeling, furnishings), running up credit card debts, and began living check to check!
    LoriKeet

    Answer by LoriKeet at 8:10 AM on Mar. 7, 2009

  • Their credit isn't ruined by the economy like you mentioned. If people worked with their creditors and mortgage lenders from the beginning(when they lost their job, had a medical emergency, etc),FICO, Transunion have all said their credit score will not be AS negatively impacted as someone who NEVER made an attempt to contact creditors when they lost their job. 


    It's ALL about communication.  Some people took action immediately. Some people didn't.

    grlygrlz2

    Answer by grlygrlz2 at 8:12 AM on Mar. 7, 2009

  • Therefore, their credit is ruined by their LACK of being PROACTIVE and not taking the necessary steps to open communication.
    grlygrlz2

    Answer by grlygrlz2 at 8:13 AM on Mar. 7, 2009

  • The only way to get yourself out of debt, and begin REBUILDING your credit, is to sell your home and any big ticket items (high end cars, a boat, time share/vacation home) and revolving expenses (like cable/satellite, cell phones with all the bells and whistles, etc.), pay off all of your outstanding debts, while renting or staying with friends or family members. Cut up and pay off credit cards, and work 2-3 jobs to start saving again.

    If you do those things, your credit score will begin to rise, and some day you'll be able to secure a loan, and hopefully not repeat the same mistake again!
    LoriKeet

    Answer by LoriKeet at 8:16 AM on Mar. 7, 2009

  • Two Words: Dave Ramsey.
    OneLove4Jesus

    Answer by OneLove4Jesus at 8:18 AM on Mar. 7, 2009

  • Lorikeet-Well said. ::applause::
    grlygrlz2

    Answer by grlygrlz2 at 8:19 AM on Mar. 7, 2009

  • First 2 answers, awesome and true. Those loans should have never been given out to begin with. My daddy doesn't believe in mortgages because of his losing a home in the 70's with 4 children, and forced all of his kids to pay for their homes as he was builiding them and we lived with my parents for that year. Not alot of people can do that and start a marriage with no mortgage, but if you can do it that way, I would say please do and force your kids to do the same. Your mortgage should never surpass 1/4 of your take home pay, and I believe that this amount should be the take home pay of the man in the relationship. Never depend on two incomes or overtime or bonuses.
    Read your Bible, it's better than Dave Ramsey when it comes to financial advice.
    akinbottom2

    Answer by akinbottom2 at 9:23 AM on Mar. 7, 2009

  • PaceMyself
    Great name btw, don't rely or look to the government for anything. If you do, you will get screwed. Just start doing things for yourself, by yourself, and never let anyone see the cards your holding. Nobody should ever be able to look at you and your home and figure out what you're worth.
    akinbottom2

    Answer by akinbottom2 at 9:25 AM on Mar. 7, 2009

  • One more thing and I'll leave this post alone,
    banks are now holding foreclosures against future borrowers for 10 years, not 7 as it was in the past. So home buying will be at an all time low for at least the next 10 years. If you know anybody in the trade of home construction tell them to go to college and learn something else.
    akinbottom2

    Answer by akinbottom2 at 9:38 AM on Mar. 7, 2009