Loan situation to stabilize
The US government has recently announced that fears relating to bad credit mortgage loans may be stabilising.
Robert Steel, treasury for domestic finance sparked concern with his recent comments relating to sub prime lenders and the after effects spilling into other sectors.
Bank regulators have suggested implying stricter lending guidelines to ensure potential high-risk borrowers can indeed afford the loan repayments. The effects of which will result in fewer consumers qualifying for bad credit loans.
Since early 2005 there has been a slowdown in the growth of the housing market. Pre 2005 many consumers with bad credit have been able to take advantage of the increasing value of their homes by remortgaging property and releasing equity to pay off other loans and credit.
The decline of the housing market has caused some sub prime lenders to file for bankruptcy. It has now been suggested that the American Government should take steps to protect low-income home owners at risk of losing their homes.
