For years homeowners have been using their soaring-in-value homes as ATMs, drawing money out to finance whatever they wanted. No more. Falling home prices mean that your house is no longer a source of cash.
Massachusetts Attorney General Martha Coakley last week unveiled aggressive regulations designed to curb the orgy of irresponsible lending that led to the subprime meltdown. The measures, among the strictest in the nation, enjoin lenders from profiteering or ignoring a prospective borrower’s financial situation.
VirginMoneyUSA, which launches today, is a lending service designed to manage personal loans between friends and family, by taking care of documentation, repayment schedules, and reminders. At first glance, the service sounds like an intrusive middle-man; however, anyone who’s ever been on either side of a personal loan knows how delicate the situation can be, so we can understand the appeal of putting some distance between the personal relationship and the fiscal one.
Ah, what an awkward situation—over the phone, or whispered at your desk, or asked face to face over beers at your weekly hangout. What’s the best way to respond when someone you love (or at least like to some degree) wants to borrow money? And what if you’re the one in need? Betterbudgeting.com offers some advice on when to loan and when to figure out whether you’re just enabling a bad habit.
Fair Isaac says that, in addition to better predicting the behavior of subprime borrowers, the new FICO score will do a better job in assessing new accounts and borrowers who have little or no credit histories, such as young people and immigrants.
Most people can expect their score to rise or fall slightly. — CAREY GREENBERG-BERGER
You could be forgiven for thinking that predatory lenders really only go after poverty-stricken borrowers. However, a recent study by the San Diego Business Journal found that 73% of predatory loans were made to middle and upper-class borrowers.