[struggle]

1. Get rid of Fannie May.
2. Make a multi-tiered system for credit/down prequalification.
720+ credit = 5% down, low rate
650-720 = 7% down, low-mid rate
600-650 = 10% down, mid rate
-600 = 20%down, mid rate

Compel people into higher credit scores. FDA loans, however, are very easy to get and will probably make this useless anyway.

[MrB]

Let the banks/lenders decide the terms of the loans...

does that make too much sense?

I know it takes power out of the hands of the central planners, so that’s why they oppose it,

but, it would let the market work, and those lenders who were either too tight or loose with their standards would suffer the market consequences of those policies.

[muawiyah]

During the period of time where banks were collapsing left and right, even the credit card operators found themselves doing massive layoffs ~ actually firing some of their best people just because they made too high salaries.

Your credit rating agencies began spitting up puke left and right as a consequence ~ I haven't read anything that says they are back in business with truly reliable information. Most folks would be well advised to check their ratings and start chipping away at the screwy stuff that's been entered on their records.

[Mr.Unique]

2. Make a multi-tiered system for credit/down prequalification.

By law? Negative...the banks can create their own rules.

[Notary Sojac]

I'm not big on credit scores as a main driver.

FICO is too sensitive to perfect timing of payment history and small nonpayments (many of which are disputable). You can have a good FICO and still get in way over your head with a loan.

Debt to income ratio (no more than 3:1 including the loan), employment history, and accurate valuation of the property ("recent comparable sales" are what gave us the bubble, I much prefer "no more than 120x monthly rents for comparable residences") are what say "good risk" to me.

[maddog55]

You base a loan on a persons ability to repay it not on some BS score from some credit bureau. Lets face it if you can’t afford to repay the loan you shouldn’t be given one to begin with and that’s been the problem.

Banks have been lending to very high risk individuals simply because the loans have been backed by bad government programs.

Common sense goes along ways. That’s why government programs don’t use it.

[chris_bdba]

Now that is a good idea but I think somehow they would manage to label it racist even though there is nothing about a credit score that has anything to do with that.It’s all about how well you pay your bills.

[FreedomPoster]

Get gov’t out of the mortgage business, and let mortgagors decide what the multi-tiered system looks like.