You may remember a time when anybody could get a home loan. In the sub-prime mortgage days of yore, underwriters had no problems approving applicants with no credit history, and nearly nothing to offer as a down payment. This wasn’t a problem when our economy was thriving and everyone was making money – if you lost your job, you could simply refinance your home and use that cash to subsist for a while until you inevitably found a new one. The fact that there was money floating to and fro all over the place mitigated the risk to banks and led to sloppy and lax over site in the industry.
In the aftermath of the economic meltdown, the largesse of the mortgage industry puckered, severely limiting the distribution of home loans to those with money – and good credit.
Now, these many years later it seems lenders are opening a bit in regards to who they will give loans to per an article at money.cnn.com. Yes, you still need a job and a permanent address, but some lenders are starting to ease restrictions for first time buyers and those who took a hit during the recession. While banks willing to do these “sub-prime” loans are few, and interest rates considerably higher – it raises the question of history, and will it repeat itself.