Remember the days when the FICO score system didn’t exist? This system of credit reporting has done more to contribute to Recession damage on the American Family than the Congress has done to them in the last 15 years.
Back in the 80′s, one would apply for a loan. The bank would check three things: How long on the job?, What was the debt to income ratio? How well were you paying off your current and past credit obligations.
We all know that the housing market has caused everyone’s house to fall in value. So what is now occurring is that good honest hardworking couples can’t enjoy a pool in their backyard because the Loan to Value Ratio (What the house is worth versus what you can borrow against it) is so low the Banks won’t loan til you have at least an 80% LTV on your house. Well it would seem that if you put 20% down as Banks are requiring, you would have that 80% LTV already wouldn’t you? But Noooo. The banks got around that by taking your current appraisal value and lopping off an additional 10% of the appraised value to minimize their exposure to any future loans against the home. You could always write Congress but you’d be disappointed because the banks own the House’s members! Remember that when your kids want to swim and can’t and you are headed for the polls to vote!
