Congress Searching For Ways To Lower Standards
Not everyone is worried about risky loans being made to marginal borrowers. Congress is trying to figure out how to get even more people on the gallows, er, ladder. "For some first-time home buyers, it is a tougher hurdle than coming up with the down payment. These buyers are what lenders call 'unscoreables,' or they have such 'thin' credit files, their credit scores are abysmally low."
"Congress took up this issue for the first time May 12, when a House committee conducted a hearing on ways to identify and use alternative data that might help gauge underserved consumers' creditworthiness. Rep. Michael Castle estimated that '35 million to 50 million people' in this country 'may not have a full credit reporting history', or they may have none at all. Yet large numbers of those consumers pay their bills on time and should be treated as solid credit candidates."
After explaining several methods of finding credit history where it doesn't exist, the writer concludes, "Tools are available. Those who truly want to provide home loans to credit-worthy borrowers need only give them a try."