Credit crisis and what the future holds

[LuckyTaxi]

With foreclosure filings at record highs and consumer debt that keeps on mounting, what does the future hold for consumers who are trying to get back on their feet? Let's say 3 yrs from now when the "dust settles," what can people expect? Especially those who will hopefully land back on their feet and want to get a house or a car? People make mistakes and I'm not talking about the morons who buys a $500,000 house on a $40,000 a year salary. I'm referring to those who lost their job or just ran into issues along the way and unfortunately had to default on various loans.

 

[DisgruntledVirus]

They still are retards.

 

[LuckyTaxi]

Originally posted by: DisgruntledVirus
They still are retards.

you speak from experience

 

[HardcoreRobot]

my guess is, they will continue to make bad financial decisions

 

[Golgatha]

If they defaulted on a loan this year, then in 3 years, when they apply for a new loan for a car/house, they can expect the following. Higher interest rates due to a poor credit score and more difficulty obtaining a loan in the first place due to tighter lending standards.

Hopefully this fictional person will rethink putting back 6 months worth of expenses, and will have rebuilt their credit rating back up over a 7year period by making sound financial decisions before trying to get another loan for said car/house.

 

[LuckyTaxi]

Originally posted by: Golgatha
If they defaulted on a loan this year, then in 3 years, when they apply for a new loan for a car/house, they can expect the following. Higher interest rates due to a poor credit score and more difficulty obtaining a loan in the first place due to tighter lending standards.

Understandable but what does that mean for the lending institutions? They won't be able to make money since there would be less loans to make out.

 

[Injury]

If a person is smart with money to begin with then they'll be able to recover. If a person sucks at money to begin with, then they probably had a loan that they couldn't repay.

You are trying to make a difference in someone who is financially incompetent and someone who wasn't smart enough to have an emergency fund for the unexpected. There is no difference.


But in the less likely scenario where someone was really just had a stroke of bad luck over and over again, they'll declare bankruptcy, attempt to rebuild their life and eventually move on. Just like people did for decades before the "housing crisis".

 

[ElFenix]

foreclosure filings were down 17% from last year in texas for july (or maybe june, whatever was reported this morning).

 

[jlee]

Originally posted by: LuckyTaxi

Originally posted by: Golgatha
If they defaulted on a loan this year, then in 3 years, when they apply for a new loan for a car/house, they can expect the following. Higher interest rates due to a poor credit score and more difficulty obtaining a loan in the first place due to tighter lending standards.

Understandable but what does that mean for the lending institutions? They won't be able to make money since there would be less loans to make out.

They'll make less money. 😕

 

[Injury]

Originally posted by: LuckyTaxi

Originally posted by: Golgatha
If they defaulted on a loan this year, then in 3 years, when they apply for a new loan for a car/house, they can expect the following. Higher interest rates due to a poor credit score and more difficulty obtaining a loan in the first place due to tighter lending standards.

Understandable but what does that mean for the lending institutions? They won't be able to make money since there would be less loans to make out.

The more desperate they get to keep business going the more risks they'll take on people.

... and it means the people who aren't stupid and don't get in over their head will get better rates because they are less risk/easy money.

 

[Mxylplyx]

If you have defaulted on loans, you need to get back on your feet without using credit.