Good Credit vs. Bad Loans.
I just read an article on CNNMoney.com entitled “Good Credit Can’t Protect Borrowers From Bad Loans“. It explained in a very clear manner how a lot of lending decisions were made soley on the borrower’s credit score (FICO) and not much weight was given to whether they could actually pay back the loan. Things like ‘cash reserves‘ or ‘job security’, among other things.
This article really tells it like it is, and I agree with most of what they have to say. The only caveat I would add is that the borrowers need to accept some responsibility. Even if it’s just a tiny bit. Don’t they? They are the ones who signed on the dotted line to pay back the loan. They can read. It wasn’t a ‘conditional’ promise to pay. It wasn’t something like: “I’ll continue making loan payments as long as I want to, or I’ll keep paying as long as my property keeps going up in value”. Long story, short. Everyone is at fault, and that’s my take on it.
It’s an easy read. So do yourself a favor… and read it.
Wallace…
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