A few of the larger mortgage companies have changed their FICO score requirement. What has taken place is that lenders are now increasing the middle score requirement to qualify for a home loan. The have increased the requirement by 20-40 points!

Why is this happening now? It is mostly due to all of the HUD defaults.  Lenders are responding by increasing the scored needed on your middle FICO score to qualify.

In the wake of the mortgage meltdown, most private lenders have reverted to the traditional down payment rule of 10% or 20%. Housing experts agree that a high down payment is the best protection against default and foreclosure because it means the owner has something to lose by walking away.

Meanwhile, at the FHA, the down payment requirement remains a mere 3.5%. Other policies—such as allowing the buyer to finance closing costs and use the homebuyer tax credit to cover costs—can drive the down payment to below 2%.

Then there is the booming refinancing program that Congress has approved to move into the FHA hundreds of thousands of borrowers who can’t pay their mortgage, including many with subprime and other exotic loans.

HUD just announced that starting this week the FHA will refinance troubled mortgages by reducing up to 30% of the principal under the Home Affordable Modification Program. This program is intended to reduce foreclosures, but someone has to pick up the multibillion-dollar cost of the 30% loan forgiveness. That will be taxpayers.

In some cases, these owners are so overdue in their payments, and housing prices have fallen so dramatically, that the borrowers have a negative 25% equity in the home and they are still eligible for an FHA refi. We also know from other government and private loan modification programs that a borrower who has defaulted on the mortgage once is at very high risk (25%-50%) of defaulting again.

Folks, this has the potential for things to get uglier in the housing market and refinance arenas.

Even more reason to know how to increase your credit scores and protect them once you get them above 700.

Stay tuned.

   Holy Cow! As if the the current credit crisis wasn’t enough to keep you up at night worrying about your financial future, Experian just announced a MAJOR blow to the American public and it is not a good thing at all!

   Starting February 14, 2009 Experian has announced that they will no longer all you to purchase your FICO Credit Scores. As most all of my students and loyal readers of this blog know, having the ability to purchase all three of your credit scores is absolutely critical to you knowing where you stand with regards to approval of a loan and at what rate.  Now Experian wants to take away that access to info so that you will only know what your scores is when the lender actually pulls your credit for the application. 

   Does this sound at all like a conspiracy to you??? Well, if I don’t know what my scores are before I generate an inquiry, how do I know if I will be approved? Also, how will I know what rate I qualify for? I will have to take the word of the lending institution as to what my credit score was.

   In 9 days we will no longer be able to see the same information that lenders see. While you can, you should go purchase all three of your FICO credit scores to see where you stand as of today.

Here is the link…

http://www.MyFico.Com/12

   Unless something major happens, this will be the last time you have the right to purchase all three of your FICO scores and arm yourself with the knowledge of YOUR credit reports. For some reason, Experian doesn’t think that you should have that right.

   Matter of fact,  our FICO scores were hidden from us once before. Back in 2003 we were empowered to see this information. We have enjoyed the ability and freedom to know our real credit scores for almost 6 years. Unfortunately that freedom is about to end.

   This means that you won’t know your middle score (the one that almost all mortgage lenders look at when they pull your credit scores to determine approval and at what interest rate) and will be in the dark as to if you qualify and for how much. We all will be flying blind with most major credit purchases, especially mortgage approval for purchase, refinance, etc.

THIS IS NOT GOOD NEWS FOR ANY OF US!

  I am recommending that all of my students and readers call Experian’s media relations department directly at 714.830.5300 and share your thoughts and commentary with them. Leave a message if you don’t get a live person on the phone.

  Here is the official news release from Fair Isaac (FICO)

“Fair Isaac has long been committed to empowering consumers with information. Besides helping consumers understand and manage their credit profiles, we believe that consumers are entitled to know their FICO scores from all three major credit bureaus, since these are the scores lenders use to make credit decisions.

“We were recently notified that, effective February 14th, Experian will no longer allow consumers to view their FICO scores based upon Experian data. FICO scores from Equifax and Trans Union will continue to be available on MyFico.com”

So my friends, once again we must be vigilant in protecting our rights to know our credit scores and make sure that those housing that information are accurate and up to date!

   Retirement communities have seen a real shift toward entertainment and grand designs in the last few years. Where retirement communities in the past may have simply been a place to live, the latest communities are including all sorts of amenities to attract residents. The range of options in the retirement community world has also mushroomed, with homes available in at almost every price point. Future residents have their choice of simple condominiums, or multimillion dollar homes. The lifestyle options of each retirement community also vary greatly.

   Seniors with medical issues that need a little more help can easily prosper in an assisted living community. Such communities offer medical assistance when needed, but do not treat residents like they are in a hospital. Rooms are usually spacious and include all the amenities of home, such as a full kitchen with a table, as well as a living room area. This is a great option for those seniors that want to remain independent, but have some serious medical needs. Onsite staff are usually around 24/7 to assist residents, but leave those that are healthy to themselves.

   Some retirement communities offer communal apartment settings, where residents live in groups of two or more together. This can be a great way to meet new people for seniors, as well as provide the occasional help that they might need. Residents are usually thoroughly interviewed and matched with care before going into a residence. Seniors that remain independent, but that want a little company or help, will find that this is a great arrangement.

   Single family home units are also available in retirement communities, although they can be more expensive. Seniors can spend as much as they want here, as some retirement communities offer themselves as luxury resorts, with property values in the millions. Typical high end retirement communities feature full fitness facilities, championship golfing, tennis courts, swimming pools, and more.

   Retirement communities are located throughout the United States, but choosing the right one is a matter of taste and financial viability. Florida is a very popular choice, both for its climate and lack of income tax. The most affordable states as far as taxes, however, are Delaware and Kentucky. Despite its lack of income tax, Florida ranks around the middle when it comes to the amount of taxes that it charges on seniors.