Surprised? Who could be surprised?

[cjppjc]

http://finance.yahoo.com/news/Credit...05094.html?x=0
Credit scores can drop after getting loan help

Homeowners see credit scores sink after signing up for mortgage relief


WASHINGTON (AP) -- Some homeowners who sign up for the government's mortgage assistance program are getting a nasty surprise: Lower credit scores.
For borrowers who are making their payments on time but are on the verge of default, the Obama administration's loan modification program can reduce their credit score as much as 100 points. That makes it harder to get a loan and can present a problem when applying for a new job.
Housing counselors say it's unfair, especially because the news often comes as a surprise to homeowners.
"Why should people's credit be hurt even worse when they're trying to do the right thing?" said Eileen Anderson, senior vice president at Community Development Corp. of Long Island, a housing counseling group in New York.

And many homeowners are angry that a program designed to help carries such a penalty, said Kathy Conley, a housing counselor with GreenPath Inc., a nonprofit group in Farmington Hills, Mich.
"It's a feeling of being duped," she said.

[Raz]

Re: Surprised? Who could be surprised?

http://finance.yahoo.com/news/Credit...05094.html?x=0
Credit scores can drop after getting loan help

Homeowners see credit scores sink after signing up for mortgage relief


WASHINGTON (AP) -- Some homeowners who sign up for the government's mortgage assistance program are getting a nasty surprise: Lower credit scores.
For borrowers who are making their payments on time but are on the verge of default, the Obama administration's loan modification program can reduce their credit score as much as 100 points. That makes it harder to get a loan and can present a problem when applying for a new job.
Housing counselors say it's unfair, especially because the news often comes as a surprise to homeowners.
"Why should people's credit be hurt even worse when they're trying to do the right thing?" said Eileen Anderson, senior vice president at Community Development Corp. of Long Island, a housing counseling group in New York.

And many homeowners are angry that a program designed to help carries such a penalty, said Kathy Conley, a housing counselor with GreenPath Inc., a nonprofit group in Farmington Hills, Mich.
"It's a feeling of being duped," she said.

I'm sympathetic to these people because of their attempt to honor their obligations, but as long as the Federal Government is going to interfere in the marketplace (and I'm not refering to necessary regulation against predatory lending, fraud, discrimination, etc) by pegging interest rates, subsidizing lenders, the GSEs, couterfeiting $Trillions to buy MBSs at inflated prices, etc., a private mortgage lender will tend to see anyone who takes advantage of this program as one to be avoided.

There are three Cs of Credit: Character, Capacity and Collateral. While they are exhibiting the first "C", their apparent need to participate in the program clearly calls into question the other two.

As it is right now, the Feds are the mortgage lender in these United States. If there is a private mortgage market that makes loans without Federal guarantees I'm not aware of it. And a big part of the problem is the artificial attempt to maintain real estate values above the market clearing price, thus calling into question the soundness of collateral.