I have read anecdotal posts about the "real" rates available for potential borrowers with FICO scores below 740. Seems the advertised rates are for prime suspects only and then only on non-jumbo mortgages. In addition, down payment requirements are up as well. This particular part of the changes is actually good. The more folks have invested in their home, the less likely they are to walk away. (Unless the market depreciates quickly and steeply)
The point of my relating this info to you is this. We are currently watching the congress fight over provisions of the stimulus bill, after passing a gift package worth $700 billion to the banks and financial industry after a few days of talks and a whole 3 pages of information from Paulson. Their excuse on quibbling over details of this bigger package is that they were burned once. Who are they kidding. We have all been burned by the contemporary brand of radical financial buccaneering in fashion since Reagan.
Imagine if you will how it would work for you if you could buy policies on the failures of business and institutions you are not in any way a part of or in which you have absolutely no involvement. The good people who invented Derivatives and Credit Default Swaps did this and worse. In some cases the same fine folks who put together the packages of less than good mortgages and sold the sow's ears as silk purses, then took out Credit Default Swaps on the very same offerings.
It was a system destined to fail and motivated by careless greed and ethical bankruptcy. Of course millions of regular citizens played their part by going along with loans out of line with real property values and real income. Don't be surprised if the pendulum swings the other way now.
I will leave you with this quote by Thomas Jefferson, who knew what to watch out for over 200 years ago.
- "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."