$700 Billion or No Deal? Home Loans Still Available!
Credit will dry up completely if we don’t inject $700 billion of our money into the system, we are being told. Well, where is the credit for home loans coming from this week, while representatives in Washington are being told taxpayers must hand this money over?
I get a monthly mortgage statement from Countrywide. Each and every month, including this month, Countrywide has sent refinancing, credit consolidation, or home equity loan offers to me and I’m sure other current customers. When will our economy overcome its penchant for chasing easy paper phoney money by producing nothing but debt?
I called Countrywide’s 800 number today out of curiosity, and asked the representative in Phoenix, AZ if there would be any trouble closing a loan and getting it funded if I met all the lender’s requirements. Absolutely not, the rep told me. As long as applicants meet Income, Credit Score, and Equity requirements, there are funds available. So, the business that was Countrywide (now Bank of America), is able to close home loans as of this week, as long as the applicant has all three of these: Income, Good Credit, Equity.
Still wondering about the shortage of credit, I called Citibank. Would I have a problem getting a home or refinancing loan funded there, assuming I met all the lender’s requirements? I’ve heard that it is very difficult to get credit right now. ”Citibank doesn’t have that problem,” their rep told me.
My brother, who lives in New York, told me that last week when he went into the bank, the teller asked him if he wanted a home equity line of credit. Some (most?) banks are still willing to bet on homes.
I understand businesses are suffering because short-term lending has become almost impossible to get. Perhaps some businesses, especially small businesses, have trouble meeting lending institutions’ high Income, Good Credit, and Equity requirements. I do sympathize with business owners, employers who provide jobs for fellow citizens, if they can’t get credit because their business isn’t as easy for a bank to analyze as a piece of real property.
Financing involves risk and far too many financial firms thought housing looked like a low-risk bet. I guess all those bankers just bet too much.
And we are being told that we should make good their bet, even though they placed it on guaranteed short-term riches (for themselves) instead of higher-risk long-term investment (for their shareholders and the American people). Who are the losers? All of us who want a strong American economy, and plenty of good jobs for our children in the future.
Perhaps other Southern California constituents can explain our financial system’s behavior another way. I’ll just echo Cindy’s advice: contact your representatives and make sure they know your opinion about how you want your piece of that $700 Billion spent.
In my opinion, $700 Billion of taxpayer money would be much better spent on long-term productive investments. For lots of other opinions, and extremely interesting commentary from all sides of the political spectrum, check out Calculated Risk. All the bloggers warning about a financial disaster looming were right after all.
