Getting Personal
It's Not Fair, Right?
Question: Everything in the news and from Congress is about bailing out subprime mortgages and people with poor credit. Are there any programs out there for people who have very good credit and are a seeming good risk for lenders? I heard that lenders are going to try and recoup their losses on the backs of less-risky borrowers. I would think it would be the opposite. For those of us with excellent credit numbers, why aren't we being courted by lenders? Thank you. Brian, Ortonville, MI
Answer: I wrote about this on my other blog, My Two Cents.
Why should folks who didn't get caught up in the real estate frenzy of the 2000s pay for the financial mistakes of those that did? Many people didn't stretch their finances to buy as big a house as possible or invest in several "sure-fire" properties. They didn't take out interest-only mortgages, option ARMs, or apply for so-called liar loans. They were prudent with their money, perhaps continuing to rent while their friends bought homes or maybe staying in their smallish abode because the mortgage payments were affordable. Now they're on the hook for bailing out Wall Street, bankers, and irresponsible borrowers. That's not fair, is it?
No, it isn't.
That said, I'm in the camp that believes the bailout hasn't been a mistake. Would it be fair to put the economy into a deep recession or depression? I don't think so.
What about people like you who have been prudent with their money? In essence, I believe you'll have plenty of opportunity to buy good assets or attractive investments at a good price while others are struggling to pay down their debts. You have money and good credit which are invaluable right now. Eventually, creditors will loosen their lending policies a bit, and you're just the kind of borrower they'll want. I would use this time to think about and research where would you like to invest your money?
That's fair play, no?
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Chris Farrell Marketplace Money personal finance guru
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