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As a Loan Officer, I have helped many individuals obtain homes as part of my profession duties. From my experience, I can foresee difficult times ahead for those who have bad credit. Recent news stories are misguided in their condemnation of people with poor and bad credit as the cause of the current housing crisis. The true culprits in this whole mess are really the lenders and banks.

Banks and lenders began to offer a teaser rate of 8% or 9% to seduce people into a mortgage and then two years down the road the interest rate would jump to 10% and 12% and higher. Those who were struggling to pay $750 a month for a mortgage suddenly found themselves faced with a $1200 monthly payment. All the while the cost of living and gas prices went through the roof. Many of these individuals had no problems paying their mortgages initially because their rent was the same cost as their mortgage. The problems were caused by the 2-year adjustable rate increase.

Banks are now threatening permanently to bar people with bad credit from homeownership. Today, it is difficult to qualify for a mortgage loan if your credit score is lower than 700. Additionally, you will most likely be required to make a down payment of 10% – 20% and the property you are trying to purchase may need to be appraised at 10% – 20% over the purchase price. These restrictions will eliminate large numbers of ordinary people from ever owning their own home again. Many will become lifetime renters. The tragedy is that the American Dream of owning one’s own home will be out of reach for many people.

More sadly is the fact that people will be punished and the banks that caused the mess will get bail outs by the US government. Many banks will recoup their losses only to go back to the same predatory lending schemes from the past. While banks are handled with kid gloves, no one is standing up for the people losing their homes.

In many parts of the US, if you have bad credit you can’t even rent an apartment and not everyone who has a bad credit score is negligent or non-credit trustworthy. Many have lost their good credit standing due to divorce, medical bills and other factors. Many of these individuals had always been very responsible and paid their bills on time monthly for years. However, fate has dealt them a terrible blow.

If you are one of those people who have lost your good credit score for reasons outside of your control, try to restore your credit rating with some help from a free credit counselor. There are many things you can do to get yourself back on the path to a better credit score. And despite your many current financial problems, never give up hope of home ownership as a viable way to secure your future.

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1. The Importance Of Credit Ratings
2. Determining Your Credit Worthiness From A Free Credit Report
3. Bad Credit Loan Facts
4. Activities That Can Hurt Your Credit Score
5. Free Annual Credit Report Online