Once upon a time, having sterling [tag]credit[/tag] meant that banks and other lenders valued your business.
No more.
The [tag]subprime mortgage[/tag] mess is now impacting even those who spent years building up their credit record, because banks are running scared.
A just released Federal Reserve study shows that: “About 55 percent of domestic respondents indicated that they had tightened their lending standards on prime mortgages.”
An Associated Press article says that figure is up from about 40 percent just this past November.
This is, perhaps, the strongest indication yet of just how painful the current [tag]credit crunch[/tag] is likely to be for months to come; maybe years?
And, the [tag]mortgage[/tag]/credit crisis has spilled over into business loans, too, with the [tag]Federal Reserve[/tag] survey finding banks have tightened up their standards for loans to businesses.
This raises the issue of who exactly is going to buy up all those vacant or soon to be vacant houses on the market?
Earlier predictions by some were that those with really good credit will be able to take advantage of a buyer’s market. But, that is only the case if they can get credit themselves. The latest survey would seem to indicate that that is increasingly problematic.
So, now what?
Think anyone really knows??
Related posts:
- Mortgage Crunch Hits Job Market and Stock Market
- Upsurge in Foreclosures Due to Rising Mortgage Payments . . . it took top Fed officials to figure that out!
- Focus on Foreclosures, 3-29-07
- How to Score Big! The Truth Behind Credit Reports and Your Credit Score.
- Beware of Fake Credit Report Sites
Article Author: Charles FeldmanCharles has written 179 articles for us.
Visit Charles's Website: http://www.thefeldmanblog.com
Charles is currently reporting for KNX Radio in Los Angeles, is the co-author of the book No Time To Think, and can be found commenting about the news on his blog, The Feldman Blog, as well as on The Huffington Post.
Joshua Dorkin
{ 5 comments… read them below or add one }
The housing market seems to be a bit of a chancey game at the moment
I still think you need really good credit anymore for anything you do in life.
“The subprime mortgage mess is now impacting even those who spent years building up their credit record, because banks are running scared.”
Yes, that is why *everyone with a mortgage* should payoff that debt as quickly as possible. Your mortgage is the biggest obstacle you face in wealth development — remember, your home is not an asset until such time as it has been paid off “free and clear”.
More and more folks are using a Home Equity Line of Credit (HELOC) or a business-line-of-credit (BLOC) or personal-line-of-credit (PLOC) as an interest cancellation account to accelerate their home equity and payoff their home *years* sooner than listed on their mortgage amortization schedule.
Unfortunately, today’s Real Estate market means that folks can no longer count on appreciation to build home equity. Those who realize that they need to pay down their current mortgage debt are looking for alternate ways to aggressively (yet safely) build equity.
And they’ve discovered a perfect online system to do that; they can focus on their wealth accumulation goals while accelerating their equity simply by using an Advanced Line of Credit (ALOC) to ‘power’ the Money Merge Account™ financial solutions program.
A typical 30 year loan (of whatever type) can be paid down in 1/3 to 1/2 the time — it’s a great way to save *huge* amounts of income by eliminating a mortgage amortization front-end interest load. (On a million-plus dollar home, I’ve personally seen where the Money Merge Account™ program will save the homeowner $750,000 in interest charges!)
And the best thing – homeowners don’t have to refinance their existing mortgage or, in most cases, make any adjustments to their lifestyle.
It is unfortunate that most of us were never taught to follow three essential principles: (1) Avoid paying interest, whenever possible, (2) Use other people’s money, whenever possible and (3) Find and use a financial system that will guide you, especially if you have the tendency to go off-track. The Money Merge Account™ software and the program’s counselors use these principles to keep each homeowner focused on their wealth accumulation goals.
I’d be happy to provide further details…
It’s amazing the exact oposite is happening in the credit card market in the UK. Here banks are turning away customers who clear the balance of the credit cards every month!
I have a friend who went to buy a car and he says he has great credit but was still having problems getting a loan.
{ 1 trackback }