Banks are now lending money to people who’ve defaulted on their homes.
Loans for people with good credit scores are increasingly easy to obtain.
Credit card offers are going out in the mail again. I’ve even received a few.
In the long run, this has to be good for the economy in general and the housing market in particular.
Citi and American Express keep sending me credit card offers even though I signed up online to not receive any more credit card offers.
In another sign that borrowing is easing up, some banks are extending credit beyond the best borrowers to include those with significant blemishes on their credit reports, says James Chessen, chief economist at the American Bankers Association. At the moment, borrowers who have defaulted on their mortgages — but are current on all other loans — are among the attractive candidates for new loans. Between February 2009 and August 2010, 64,500 borrowers who had defaulted on a mortgage received a consumer loan, according to a study released last week by credit bureau TransUnion. The majority secured credit cards, but almost 40% got car loans or a personal loan or line of credit, according to TransUnion’s study.
And while more recent data isn’t available, experts say the number of loans granted to mortgage defaulters has likely continued to grow. “It’s certainly loosened up now,” says John Ulzheimer, president of consumer education at SmartCredit.com, a credit-monitoring site. “I would say [lending] is more prevalent than the TransUnion study suggests.”