"Everyone was getting loans. People with worse credit than me, even."
But the once booming housing market is now foundering in many cities, largely because buyers with shaky credit scores like Miller’s have been defaulting on their mortgages in record numbers. Last month Freddie Mac, a huge investor in
People had hoped they could refinance their rapidly appreciating new homes to cover the higher payments.
In recent years, as the housing market boomed, lots of loans were handed out with little or no proof of income, which are called "liars’ loans" by critics. Sen. Christopher Dodd says he plans to introduce a law that would essentially allow you more time to solve loan problems before foreclosure. In the meantime, lenders urge troubled borrowers to keep in touch.