Home Foreclosure News: Owning a Home Becoming a Lot Harder for Lots of Americans Because of the Foreclosure Crisis

November 18, 2010 | By Y. Black, Site Editor In Foreclosure News |

According to a recent report by Bloomberg News, home ownership — the cornerstone of the American dream for many – is becoming a lot harder to achieve. And, it’s all thanks to the foreclosure crisis that’s plagued the nation since late 2007.

FICO Scores: What Yours Has to be to Qualify Now, as Opposed to Pre-Foreclosure Crisis

It used to be that if you had a credit score of 580, you could qualify for a zero-down home loan (ie, get 100% financing which means no down payment required of any kind). I know, I was a loan officer during this time (2007).

Now, according to the report:

The FHA, which previously didn’t have minimums for FICO scores, began in October to require grades of at least 500, and more than 580 for loans with down payments of as little as 3.5 percent. Borrowers with scores between those levels must put 10 percent down. Several lenders moved minimums to about 620 at the start of 2009, the companies said then. [Source: Home Ownership Gets Tougher on Restricted FHA Mortgages]

Some homeowner advocacy groups say these new policies hurt those at the lower end of the financial spectrum unduly, because it excludes as much as 15% of potential FHA borrowers.

What Should Your FICO Score be to Qualify for a Home Loan? If You Can’t Meet Minimum Requirements Do You Deserve to Own a Home?

But on the other hand, one could argue that it’s this type of thinking that got us into trouble in the first place. If you don’t have good credit and enough financial discipline to save a 3, 5 or 10 percent down payment — do you deserve to own a home?

Your thoughts? Share them in the comments section below.

P.S.: Start a Business Cleaning Foreclosed Properties. While the foreclosure crisis has been a nightmare for many, it has presented a perfect small business opportunity for others. Learn how to start a foreclosure clean up business. Read how one foreclosure cleaning business owner rakes in $40,000/wk (not a typo).