Credit Worthiness in America

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  • Published on Monday, 18 July 2011 13:01

        The real estate crisis has literally changed the meaning of credit worthiness in America today. Homeowners with excellent credit scores are shocked to learn that banks turn down loan refinance applications to save their homes. The common excuse for banks is they have to prioritize those who are in need of financial assistance. After all almost everyone is need of some type of assistance in this dire economy. While that may seem fair, banks have a poor system of identifying those who really are in need. Before a bank considers assisting anyone, a home

owner will have to miss payments. Yes that means hurting your credit. In a perfect world a person who has never missed a payment is credit worthy to be offered a better interest rate. So are banks really there to help those who are in need? Despite the low interest rates, a home owner working 3 jobs to pay a high interest mortgage will never be identified in financial hardship. As long as payments remain current a person is ineligible for assistance. Amazingly, the other half of people that miss loan payments are given financial help. This broken system has created more shady business practices. As people try to save their homes, people are given no choice but to go with the flow of a dishonest system whether it meant missing mortgage payments or lying about incomes and expenses. The government should step in and have a program for responsible homeowners current with their payments. Otherwise people out of frustration will simply foreclose on their homes dragging the rest of the housing market down.