In a surprising turn of events, lenders are actually beginning to consider applicants with less than stellar credit ratings. Because a large portion of US residents have experienced some type of financial setback, it seems that banks have no choice but to start lowering their standards. Outside of business owners, applicants with flawless credit and newly established business professionals, banks are giving loans to those that have defaulted on their mortgages. In addition to those who have just missed a few mortgage payments, applicants that have recently been foreclosed on are actually a lower credit risk than consumers who have stopped paying all of their bills.
Most would think that banks would do everything in their power to avoid defaulters, but apparently, they are more responsible than people who go on credit shopping sprees before going bankrupt. Of course, each individual bank has its own blacklist, which in effect prevents any customer that owes money from being qualified for a new loan. Even if the debt is outside of the statute of limitations, banks are permitted to deny loan application for virtually any reason, as long as it is not discriminatory in nature.
Banks probably won’t be approving a slew of applications from consumers that have defaulted on their mortgages, but the fact that they have given loans to a few is a good indication that the housing market is starting to rebound. Instead of waiting seven years for negative remarks to fall of your credit report, you can start submitting applications to banks now.
