Mortgage without credit score?

[farmmilkmama]

I was just reading about credit card fiascos in another post and thought I would start a new one for our question so the other thread didn't get off topic.

My husband and I went through foreclosure and bankruptcy two years ago. Since then we have been sharing a home with another family (to help out both parties). We have paid cash for everything, saved, saved saved, no credit cards, no loans, nothing. We were feeling pretty fantastic for being able to live on whatever was in our pocket, as it should be.

We were originally told that we would be able to start shopping for a mortgage in Jan 2010. Come to find out a week ago, that isn't true...either we were misinformed by the bank originally or laws have changed or I don't know what. Anyhow, every bank/mortgage place we talked to told us we need to get credit cards in order to improve our credit score in order to qualify whenever we CAN look at getting a loan. We were really frustrated. They told us it didn't matter how much a person has sitting in the bank, if we have no proof that we can make payments (to a credit card, apparently) then they can't help us.

So my husband bites the bullet and tries to apply for a card. Gets denied, over and over. You know, that whole foreclosure/bankruptcy thing two years ago. Which is totally understandable...but I'm just not getting how we are supposed to "build up our credit"... and it makes me angry that cash doesn't mean anything.

Any ideas? Are there ways to get a mortgage without buying into the credit card scam? My dream is to save like a maniac and have as much cash on hand for the down payment as possible (small farm, fixer upper...) but if banks/mortgages don't look at you without credit cards, what to do? What to do?

I leave it to my non-mainstreaming buddies to clue me in...

[nhlivefreeordie]

Rent to own, or private sale where seller is motivated enough to hold paper on the land come to mind, I wouldn't go back to credit cards for anything. It may take a while, but you will find the right deal, or save enough cash to buy it outright.
We are building our homestead in NH one step at a time and paying cash as we go. The land we rolled into our home mortgage several years ago as we had a low fixed rate and enough equity here to cover it.

[Mom5farmboys]

You could always try to buy land/house directly from the seller using a land contract. Usually there is a down payment and then monthly payments directly to the person who wants to sell. Our friend recently sold his land via land contract but instead of a large down payment at the beginning they decided to do a balloon payment at the end of 2 years. So you could negotiate which terms work best for both parties.

[farmmilkmama]

We would love to do rent with option to buy or contract for deed...we just haven't had luck finding anything. Are there a lot of r/o or cfds in your area? We are in MN. We have a friend who is a realtor and he's been looking for either of those options for a couple years (seriously, our only stipulation is that it has at least 5 acres of land...I could care less about what the house is. I'll live in a tent if I have to.) I know we have to be patient...we will make do with where we are

I guess, regarding the credit card thing, was I was totally naive that they were so important to "the others". When did living in a way where you can pay cash become a bad thing?? I thought that was what we were supposed to aim for? We were really proud of ourselves for being able to save the money we had...and the issues that aren't issues for us anymore because we can always pay cash. (And if we don't have the cash, we don't buy it.) (Which is quite a feat, because my hubby's job has been supporting two families for about 6 months now.) Anyway, we were really super happy about what we were able to do and how we were able to simplify and live. And then to walk into a bank and have them basically look at you like you're nothing because you don't have a credit card...it was really frustrating.

I guess I just don't get it. :(

[momma_to_seven_chi]

Get a secured credit card to start to build credit. Then move on to a non-secured card. It's one step at a time, line upon line, precept upon precept.

Another idea is to look at buying up old taxes on properties. You can buy a home for cash that way, not too expensively. It takes time to get the property, and you want to make sure there isn't a mortgage in default on the property. But it does work. I know people who started buying taxes, and have made quite a bit of profit over the years. They use the houses for rentals, but you could certainly live in one.

Contract for deed properties are hard to find nowadays. If you can find one, that would be great too. And banks usually sell foreclosed property pretty cheap, even under the cost of the loan, especially in a bad housing market like this.

[nhlivefreeordie]

They don't like people with cash, it is bad for THEIR business....YOU don't need a FICO score if you pay cash.

[cinok]

Alos remeber that many banks have tightened thier belts. even though part of the concept behind the TARP money was to lossen the credit market it has not. Credit scores are based on history. While some bash credit cards they have a place in todays world. Walking around with large amoutn of cash is not always a smart thing. Part of haveing credit is paying the bill on time so if you use your cards and pay the balance withing the grace period most cards charge you nothing. THose secured cards are loaded with extra fee's. Here is an Idea I di this a long time ago to help my score when i was young. I opened a CD for 6months got a loan from the same bank using the cd for colleteral. Made may payments on time and when I cashed the cd in I paid the loan off I repaeted the process a few times and my score went form nothing to having a amex gold in a year. I did have to eat the intrest on the loan but it wasnt much.

[AlchemyAcres]

It's difficult to get a conventional mortgage in the current market even if you have excellent credit!

The installment contract is probably your best option.

You will need to do a lot of work and pound the "pavement" (or preferably, dirt roads,,,LOL) to find an oppurtunity.

Back when i was buying properties, I had the best luck with "troubled" properties that hadn't sold and were coming out of contract with the real estate company.
Owners are often motivated to sell in any way possible at that point.
9 years ago I bought 11 acres for $5,000....it had just come out of contract with a real estate company, it supposedly would not "perc"...in other words there "supposedly" wasn't a suitable site for a sewage system.......anyway...I made the offer and bought the property on short contract.
Turns out, the former real estate agency was just too lazy to find a suitable site for a sewer system.
I got the property "perced" and sold it a year later for $20,000

I bought 10 acres that were on a seperate deed from the house and other acerage that had just come out of contract with with a real estate company.
There was $30,000 in timber to more than cover the $15,000 purchase price of the property.

I've purchased a few other properties over the years that were just coming out of sales contract.

The oppurtunities are there if you're willing to do the work.

~Martin

[Anon001]

First of all... there are some mortgage lenders that do NOT require a credit score. You just have to shop around.

Credit cards are only a small portion of the formula that makes up a credit score. So, with just a credit card or two, you still will not be able to raise your credit score high enough to get a low interest loan.

Also, with your previous foreclosure and bankruptcy only being two years ago, you will be hard pressed to find anyone willing to make the loan.

I would NOT go back to a credit card. Unless your living and financial situation has changed, you will end up right back where you were previous to two years ago.

A person can have one million dollars sitting in a bank, but if he pays cash, he will have credit score of 0.

Banks WANT you to have a credit score. It tells them that you love credit. The more credit you have and the more payments you make, the higher your score goes.

You are on the right track. By the way, who told you that you could look for a mortgage in January 2010? You could have looked the day after your bankruptcy was signed. It's the lending institutions that want you to wait, but some will require a 7 year wait.

Keep one more thing in mind. The smaller the parcel, the more you will pay per acre!

There are many "For Sale by Owners" and a lot of land passing hands on contract.

For any further discussion, please post your thread in the "Finance" forum.

Thanks,

Paul

[getitdonedad]

you also might want to consider going to a credit union if you are or can become a member, to help rebuild your score and get back on tract. Its a more personal relationship than most banks have become

[kawalekm]

Since then we have been sharing a home with another family (to help out both parties).

They told us it didn't matter how much a person has sitting in the bank, if we have no proof that we can make payments (to a credit card, apparently) then they can't help us.

Question for you. Since you are living with this other family are any of the utility bills in you name? That is, the electric bill, water bill, gas bill, phone bill, ect. It is understandable that they want to see bill paying history, but maybe it may be more than just credit cards. If you start taking on the responsibility of paying the electric bill and such, I think that would be a step in the right direction.

[Cat Lover]

Let me put it this way: No one is entitled to a mortgage.

Let's put ourselves in the shoes of the lender: what guarantee is there, what means are there, to allow the lender to measure the risk he's taking? I mean, anyone can make a promise, and there's no way to see into the heart of a stranger.

So, the lender has two main tools. The first is the ability to take the property back. The second is the credit score. Everything considered, the credit score is the closest thing we have to an objective measure of past history.

You have a history of not paying your bills. is there any surprise that lenders are wary of giving you another chance?

I have a lovely credit score, and I have yet to find a mortgage I can afford; I just don't have the income.

Perhaps the creditors are just being responsble.

While there are ways for the seller to 'carry the paper,' such arrangements are fraught with fraud and abuse.

[AlchemyAcres]

While there are ways for the seller to 'carry the paper,' such arrangements are fraught with fraud and abuse.

Don't scare folks without giving specifics!

Please explain the fraud and abuse!

It's like any other contract!
Don't sign unless you fully understand and agree to the terms and are sure you can fulfill ALL terms and responsibilities of the contract !!!


~Martin

[nhlivefreeordie]

If a seller is motivated or NEEDS to get out from under, and doesn't need the total sum up front, he may be willing to make an arrangement, he has the ability to foreclose on the property if the loan defaults. There is a chance of fraud in ANYTHING you do even with big name companies, if you sign something you don't understand. There is a reason for the necessary evil of an attorney.

[Anon001]

There is absolutely NOTHING WRONG with private contracts. They are no more fraudulent than many mortgage companies!

Just make sure the contract is simple and straightforward. Also get a title search. In some states, you can register the contract and/or an "Affidavit of Equitable Interest" which will keep the seller from selling it out from under you down the road.

Actually, for someone to sell on contract, it is more profitable than selling outright, if you don't need the full sum up front. Most people that buy on contract pay a higher interest rate and a decent down payment for the convenience.

If someone wants to buy on contract it is usually because they can't get traditional financing.

If I was to sell some land, I would gladly sell on contract!

Paul

[Pokeberry Mary]

I wouldn't do business with a bank again if you paid me!

In my mind they are just glorified pawn brokers.

They just look more respectable but aren't really.

We spent about 2 years hunting all over tarnation seriously to find a place we could afford to pay for on our own or with private financing for a small portion of it.

That may be easier in many areas of the country than others.. here its not that hard to find such a place.

With the current situation lots of folks in some areas are in the position that they would LOVE to sell their place landcontract or rent to own.

We were able to save enough to pay for ours cash--but its an unfinished house so we are putting in alot of sweat equity and more cash.

Much of this depends on where you live and what you want.

We bought our house through a realtor and closed at a lawyer's office--although I did find the house on Craigs list it was listed with a realtor.

Not having a realtor is fine if you just get a lawyer--get your own though--don't use the sellers.

We did have some problems even though we were very careful--there are things that got by us. Expect some problems. Also understand having banks, realtors and lawyers involved doesn't Guarantee there won't be problems.

My in-laws bought their house and found out the title company missed an easement-- they've been fightin about this thing now for 3 or 4 years and it turns out the title company isn't giving them a thing for this mistake. What are title companies for if they can't make sure the title is all clear??

Private sellers are no less honest than professionals-- nor are they any more so-- you need to do your own homework and live with what you get.

[Cat Lover]

Sorry for the delay, AA.

First of all, real estate laws vary widely between areas. The 'rules of the game' are completely different betweem say, Illinois and Nevada.

As for the problem with sellers 'carrying the paper,' the potential for abuse comes in simply because the individual is not a federally-regulated (or even state-regulated) lender.

If you go through a bank, there are clearly defined rules regarding foreclosure, etc. In a private arrangement, there are no such guarantees. You may not even have 'equity' until the entire note is paid off.

Indeed, there are property owners who bank on that fact. Look at the fine print, and you lose everything the moment you're 30 seconds late in making the payment. Now you're no different than a tenant on a monthly lease. Oops. You thought you'd get some sort of forclosure hearing? Guess again.

Doubt me? Well, before you even consider letting the seller carry the paper - and double if the lender suddenly doesn't want to deal with a bank at all - check the property records. If the property has been "sold" by the same guy ten times in eight years, it's a safe bet that he's counting on your defaulting on the mortgage.

Another risk is that of seller fraud. Out west there have been several instances of properties being 'sold' by folks who don't own them. Try getting title insurance on a privately financed deal.

Just like any other contract? I beg to differ. We have our customs - and when someone wants to ignore convention, and re-write the rules of the game, chances are it's not in your interest.

Those are among the reasons I caution against seller financed property sales- especially if the buyer has bed credit and is unknown to the seller.

[AlchemyAcres]

Caveat Emptor!!!!

"Property Title Search"

1. Deed copy - Search includes an official copy of the most recent deed, with county recording stamp and date.
2. Legal description - Full property legal description, typically in "Schedule A" format.
3. Mortgage search - Mortgage abstract will list open mortgages with mortgage lender information, amounts of mortgages, and dates. Listed in order of apparent priority (first mortage, second mortgage, etc.)
4. Equity loan search - Report of equity loans (HELOC's) and credit lines against the property.
5. Tax payment search - Detail of tax assessor account, with amounts and dates of payments, and delinquent payments due.
6. Foreclosure search - Report on foreclosure status, listing any lis pendens, notice of default (NOD's), and orders to sell under power.
7. Bankruptcy search.
8. Civil court records search - Report on civil court records found to be recorded against the land records of the property.
9. Mechanics lien search - Report of liens placed by contractors for non-payment of services or materials at the property.
10. Judgment lien search - Judgment section for property liens as result of financial judgments
11. Tax lien search - Title section for tax lien encumbrances
12. Municipal services lien search - Shows liens against the title for unpaid municipal services such as utilities, water, sewer, trash or school assessments.
13. Child support lien search - Searches for liens of delinquent child support payments.
14. Treasury lien search - Liens for unpaid US Treasury / IRS tax payments
15. County name index search - All owners names are run against the county name index for hits on records recorded for the property.
16. State tax search - Checks for unpaid sales tax, employment taxes, state licenses, and other state-level delinquencies.
17. Property zoning.
18. Property easement search - Shows easements, right-of-ways, and other property allowances for the owners name.
19. Title abstract document - An official abstract document is provided, not just a deed report.
20. Default notice search - Lists default notices recorded for the owners.
21. Spousal support lien search - Encumbrances for delinquencies of spousal support, alimony, or other court required payments.
22. Tax assessor report
23. Ownership structure - Report on the listed ownership structure, joint tenants, individual, corporate, tenants in common, etc.
24. Municipal assessed value.
25. Plat/survey map - Copy of the official county survey, if recorded.
26. Voluntary liens
27. Flood zone status.
28. Block & lot
29. Property APN number
30. Document book & page - Written location of the historical documents, showing book and page or document number.
31. Mortgage modification - Many mortgages are being modified by lenders in the current market. The latest recorded modification is included
32. Bail bond lien - Properties are often used as collateral for bail bonds, for people other than the property owner. These liens are often overlooked by inexperienced title abstractors.
33. Levy on property
34. Power of attorney - This will show if the property owner has recorded an authorized party to act on their behalf with regard to property transactions.
35. Property restrictions
36. Special assessment - Subdivisions and condo associations place these to cover expenses, often as a result of foreclosures in the development. .
37. Release of lien - It is important to check liens to see if any have subsequently been released.
38. Partnership agreement
39. Notice of commencement
40. Promissary note - Personal loans against the property owner are sometimes recorded against the property.
41. Trust agreement
42. UCC filing - Business debts and coop financing can end up as UCC claims in the property records.
43. Subordination agreement - Loan priority can be changed through subordination, to help accomplish a refinance.
44. Leases - Recorded leases can affect the ownership and use of a property.
45. Option to purchase - This will show if the owner has recorded a purchase option issued to another party.
46. Corrective deed - In the event an error existed on a prior deed, a corrective deed can be used to rectify the error
47. Right of way - A right of way may have been issued to allow use by another party
48. Waiver of rights
49. Bond for title
50. Affidavit - The property owner may have provided assurances to obtain financing
....etc.......
.....and again, "Don't sign unless you fully understand and agree to the terms and are sure you can fulfill ALL terms and responsibilities of the contract !!!"


~Martin

[Anon001]

Cat Lover,

How many times have you bought and sold property on contract? The cases of fraud are not the norm. Fraud can happen, but a buyer can also protect himself with title insurance, title search, searching the county clerk records, etc. Any individual can look up any property on record at the courthouse and see who the owner is, lien holders, easements, rights-of-way, etc... In the majority of cases, it is beneficial to both the buyer and the seller.

Paul

[Cat Lover]

Fair commennt.

In everything there is risk, and there are many ways to handle that risk. One of the ways is to have insurance. With title insurance, you may still lose the property, but you'll get your losses covered. If you're buying property, it's something to consider.

Because, the 'emptor' can 'caveat' all he wishes, and there are still the unknowns. Moreover, the title insurance firms have their own data bases, and might very well find things you didn't know about. I wouldn't just toss them aside.

Likewise, there's precious little that can be done when the established rules are different than what you agreed to, or one of the parties has no intention of ever honoring the deal.

What my own experience has been is pretty much irrelevant. Tune into nearly and "Call a lawyer" show, and certain types of disputes keep coming up. A fair number involve privately-arranged property transfers. and the problems are rarely resolved to anyone's satisfaction, even after great expense. I've seen far too many of these dramas from the sidelines; I didn't make up that example of the property having been 'sold' so many times.

When it comes to legal advice, look at it this way: would you expect fine literature from someone who doesn't know the alphabet? Yet, the vast majority of us have never been to law school, have never opened a law book, have never read a brief or sat a case. We might think we are smart and well intentioned, but we don't even 'know our letters.'

That's why I started my first post stating that local rules vary considerably. Real estate law isn't anything new; I doubt anyone can come up with a situation that hasn't happened hundreds of times over the past few centuries. Whatever our own sense of 'fair' may be, we are bound by what has been done before. A perfectly reasonable proposition in one state may be simply illegal in another.

Getting back to our OP .... would YOU be willing to lend a quarter million dollars to a stranger who has a history of skipping out on their debts? That's what the credit rating is all about; any lender who doesn't consider such a documented record probably is up to something. Moreover, any lender who attempts to get around the established practices of real estate law is likely up to nothing good.

Is it possible to purchase property without involving any third parties (apart from the government)? Sure it is ... it happens all the time; inheritance, family trusts, and cash purchases are prime examples. You want somone to be both seller and creditor, though, you're really asking a lot.

[Anon001]

Getting back to our OP .... would YOU be willing to lend a quarter million dollars to a stranger who has a history of skipping out on their debts? That's what the credit rating is all about; any lender who doesn't consider such a documented record probably is up to something.

You are absolutely wrong about that. That is NOT what the credit score is all about. All it does is show that you like debt and how much debt you have compared to how long you've had the debt and made payments.

Some of the BEST mortgage lenders do the underwriting themselves, eliminating the need for a credit score.
The credit score doesn't show one iota of what a person's wealth or lack of may or may not be. It does NOT show income and it does NOT show a person's ability to pay or not pay. A person can be sitting with 10 million in a bank and that WILL NOT make one mark on his credit score. Credit score is nothing more than a gage to determine how much a person loves or hates debt. Bankers want people that love debt. Otherwise they would be out of business over night. The best of the mortgage lenders don't look at just the credit score. They take into account all the details of the financial picture.

Lenders that use the credit score do not take into account much of anything else.

The credit score is nothing but a scam to convince people that they can not live without it. Or.. in other words it it designed to try and keep people in debt so the lenders can continue to make money.

The most credible lenders and the ones easiest to work with are those that do their own underwriting and give no weight to a credit score.

By the way, the land bank does NOT use credit scores. Neither of the three banks I use will use credit scores. Churchill Mortgage uses no credit score.....

Paul

[Deep South]

Caveat Emptor!!!!

"Property Title Search"

...

~Martin

Good list.:) This isn't your first rodeo, is it. lol

[farmmilkmama]

I am grateful for the discussion on both sides. Thanks. :)

Perhaps what frustrates me the most is that this whole thing comes out of dishonesty and half truth. Our whole issue in the beginning was realizing we needed to get out from under an ARM loan that was going to reset to supposedly ridiculous numbers and doing the responsible thing (we thought) and selling the house instead of trying to stay there and milk our way through it. So that's what we did. Honestly sold our house (after getting the payoff amount from our mortgage company, TWICE) and were then called two days before closing (after we had already moved out to another place) to say we needed to show up to closing with at least 12K in cash because we hadn't sold the house for enough to cover our mortgage. (Um, what?) Then trying to do short sale and everything else under the sun to still sell the house (since we were already living somewhere else) and having nothing work (you know, the mortgage company lost the paper work, lost this, lost that, didn't send us the right form, let's try this again, whoops, can you try sending it through again, we lost this....) Then the foreclosure which took a full year (what?) because the process kept being stopped (we have yet to find out why), then someone hacked into the info at the mortgage company and there was identity theft involved with our account...

Then to have someone at the bank (our little bank we've been at as long as we've been married) tell us we can start shopping for a mortgage in 2010...only to get ready to start that process and have them tell us "Oops, we were wrong, come back in a couple years".

Then to have someone tell us "Great job on paying cash for everything over the past two years. Nice mason jar you have buried. But it doesn't mean jack to us. You need a credit card..."

Then to find out if you wanted one (which now it seems downright ridiculous to have one) you can't hardly get one. Even if you had decent credit.

I get that mortgage companies don't want to hand out money to just anyone. I totally get that. I get that they don't want to get burned. But I wish there was a way to distinguish between the people who lost their house because they spent all their money on purses and shoes or drugs or 45,000 square ft second houses for two people or whatever and the people who lost their houses because Life jacked them. But then I guess to them, we're all just numbers. (I mean, credit scores.) And they just want their money. (Apparently, from people who like debt.)

Forgive me for my bitter ranting tonight. :(

[Anon001]

There's nothing wrong with bitter ranting. As they say, "hindsight is 20/20."

If you were in an ARM, the best thing would have been to just refinance with a fixed rate, if you were going to stay there.

If it was me, I would just start hoarding every penny I could get my hands on. Then in another year or so, if you have a hefty down payment, a mortgage company may be more likely to make a loan.

I do know that some mortgage companies and also the land bank (now called Farm Credit) will not even consider you until you are 5 to 7 years out from your bankruptcy.

I think your best bet would be to try and save up 15% 25% for down payment and then buy on contract,even if you have like a 10 or 15 year balloon. By then, you should be able to refinance with conventional financing. Just make sure that you have a title search, title insurance, and hire your own lawyer to look over the paperwork. Otherwise, you will most likely be stuck renting for 3 to 7 years from the date of your bankruptcy.

Good luck and keep us informed.

Paul

[cinok]

Sounds like you were working with idiots if they gave you the wrong payoff amount. Was this a no doc ARM loan froma private company. I never understood speculation which is what an ARM is you are guesiing that you will make more money or be able to refinance. If you do a private deal look at the paperwork check with the county clerk make sure each lot is subdividded correctly and has been deeded correctly. Remeber sometimes they eaiser to work with but some are strict no payment this month you are gone lost your downpayment and any payments you have made. Then they resell it again and again.

[Anon001]

One other thing to consider. Usually... the smaller the parcel of land, the higher the cost per acre. Also, as the parcel of land gets smaller, usually the zoning, regulations, restrictions, etc. get worse, because these ares are usually in more populated areas that are more likely to have more restrictions.

Paul

[farmmilkmama]

Thanks for the advice, Paul and others. :) I truly appreciate it.

Cinok, the mortgage company was Countrywide.

[Anon001]

Oh, no. Countrywide is the worst mortgage company out there. No wonder you found yourself getting the shaft.

Paul

[AlchemyAcres]

Oh, no. Countrywide is the worst mortgage company out there. No wonder you found yourself getting the shaft.

Paul

Was, Countrywide no longer exists, swallowed up by BOA.

~Martin

[cinok]

I really think countrywide was hoping that most of the loans would go bad they would loan money to anyone with out documenting how they could pay for it. The part they didn't see was the collapse of the bubble.

[Anon001]

Was, Countrywide no longer exists, swallowed up by BOA.

~Martin
I knew about that, but I couldn't remember who took over. Thanks for reminding me.

Paul

[nhlivefreeordie]

I really think countrywide was hoping that most of the loans would go bad they would loan money to anyone with out documenting how they could pay for it. The part they didn't see was the collapse of the bubble.

Countrywide was also being manipulated by Congressman to make bad loans or face government scrutiny, Barney Frank and Chris Dodd were major players in this effort, as a lot of their supporters are uneducated suckers of the government teat.

[Cat Lover]

I can see there's a lot of dispute over what exactly is represented by a credit score. No surprise there; the exact algorithm is a tighter held secret the the nuclear launch codes.

It's easy to be critical of it, though ... but it's far easier to be critical than correct. Such a discussion may make you feel all warm all over, but so will peeing in your pants ... with about the same productive results.

Credit scores are tool, and nothing else. About the only way to 'value' them is to let the market decide; in this case, the 'market' is the lenders. If you want to borrow from them, they can choose nearly any criteria in making their decisions. At risk is their money - so you can be sure that they'll look for ways that work.

The OP wants to borrow, even though they defaulted a few other times that they borrowed. Fair enough. If any wish to PM them with specific lenders to contact, be my guest. if anyone is going to suggest it's all hugs and kisses, they're fibbing. However a lender operates their business, they are not planning to run a chairity. You can be sure they're alert for any hint of a bad risk.

In line with the idea of 'self sufficiency,' I object to the attitude that some seem to have that they're "entitled" to a home, or have a 'right' to a mortgage. Such an attitude is akin to saying that you're not self-sufficient, you're owed.

Don't like the credit score? The banks? Well, I don't like mushrooms on my pizza, so I don't order them. I certainly am not going to suggest there's anything wrong with those who like them, or provide them. If you're borrowing, you're not self-sufficient. It's simply counter-productive to consider all the lenders, and the tools they use, to be evil. Who else you plan on borrowing from?

[Anon001]

You're correct that the exact formula is held secret. However, you can get an idea based on the following:



Your payment history – about 35% of a FICO score
How much you owe – about 30% of a FICO score
Length of your credit history – about 15% of a FICO score
New credit – about 10% of a FICO score
Other factors – about 10% of a FICO score

Paul

[cinok]

I know down in the lower boards the respect for someone that lost their shirt in an ARM mortgage would get no pity. You(the OP) signed a promissory note that you defaulted on. No one else signed for you. Where their extenuating circumstances sounds like there may have been but the ultimate responsibility falls back on the buyer. Yes many of the mortgage companies where less then forthcoming with certain aspects and maybe the government forced these companies to lend but once again you made a promise to pay to a lender and you failed to meet the payments. Yes it was easier years ago to default and file bankruptcy then be able to do it again a few years later.

[Builder Ken]

Well I will say this and I have gone through the same thing the OP has, I had the arm plus I had over $200K out that was not collectible and the economy tanked and I'm in the building business. I truly believe each case is different and should be looked at that way. I had been a perfect customer until this all happened (which all happened in about 6mo) with a banker telling me don't worry we will get you re financed. Well lets just say a left jab and a right hook is how that ended. I was lucky and found a small property and bought contract for deed. It was 1100 sq ft now it is 2800 sq ft on 4 acres I have talked to different banks and lenders and we should be able to get a loan and pay the contract for deed off this spring. We have done all the work on the house pretty much out of my earnings, thanks to the good Lord blessing me with plenty of work. We plan to be debt free in 5yrs. So hang tough my friend it will happen, never get in a hurry I will say a prayer for you. Ken