Bailout Impact on Mortgages and Credit Scores

This video talks about the bailout, scratch that, the rescue plan, and what it could mean for getting a new mortgage. While the bailout doesn’t have provisions for setting interest rates or protecting credit scores, it should lead to more credit being made available. Still though, you will need to have all your ducks in order to get a mortgage — a great credit score, strong income, etc. In addition, I look at 30-yr fixed mortgages like I look at the stock market. Watch the video to find out more…

That said, I think we are in a period of over compensation for the previous ills. There are lots of articles this week about credit limits being lowered. That title makes it sound like it’s happening to everyone, or perhaps a majority of us. In the case of American Express, they typically reduce limits on 4% of cards, and now it’s 10%. Yes, this is bad news. But to claim a lock on credit — from a consumer standpoint — is just over sentational journalism. On the auto leasing front, I’ve heard approvals have gone from 60% range to the 30% range. Again, this is bad news, but it seems like the market is reacting to suggest it’s dried up completely. I’m hopeful that the liquidity will cause the markets to find a happy medium in the above statistics.

I’ll close with Warren Buffett’s quote on the rescue plan. “I’d rather be approximately right, then positively wrong”. He’s saying the plan, while not perfect, was necessary. This is
“an economic Pearl Harbor”

For a couple more optimistic and pessimistic viewpoints, here’s a few other links.

FedEX CEO “The Economy will Turn Around”

U.S. Regional Recession Status

October 6, 2008