St Casimirs Mortgage Minute

http://consumerist.com/2014/01/14/poor-credit-reports-start-vicious-economic-cycle-can-it-be-stopped/

Poor Credit Reports Start Vicious Economic Cycle; Can It Be Stopped?

By Ashlee Kieler January 14, 2014

 

For some people, bad credit is a result of being irresponsible. For others, it’s a matter of bad luck and overwhelming circumstance. Alas, the credit reporting agencies don’t make such distinctions, meaning someone whose house went into foreclosure because he lost his job and also had to be hospitalized is treated the same as the person who stopped making mortgage payments because they didn’t feel like it.
A new study by the National Consumer Law Center says there’s always more to the story, especially when it comes to the aftereffects of foreclosure during the recent recession.
Americans are still hurting from the collapse of the housing market, the subsequent recession and foreclosure fest, a crisis that resulted in more than 4.5 million people losing their homes. The long-term damage to these former homeowners’ credit means they will likely not be able to secure a new mortgage for another decade.
And the recession’s effect on American consumers’ credit is more than just the inability to get a loan. Bad credit can keep those consumers from getting jobs, affordable housing and insurance.
Not every home lost to foreclosure is the result of people buying properties they couldn’t afford or taking out loans they weren’t qualified to repay. Many foreclosures occurred because consumers lost their jobs, or fell victim to predatory lending and exploding Adjustable Rate Mortgages.


 Read the rest at the link above.