Borrowing money

Way back, when I was staring out, I almost couldn't get credit. I couldn't even get a credit card. I couldn't borrow money to buy a car even if I had a 20 percent downpayment. I was close to 25, was steadily employed and could afford the payment, but I still had to find a cosigner. That was in the late 1970s.

Fast forward to today. Kids are swamped with credit card applications as soon as they turn 18. If you max out your credit card, they'll up your limit as long as you keep making those minimum payments that will keep you in debt for 42 years. You can buy a car or a house with no money down.

That last part may be changing, according to Fortune magazine online. To quote from the article, for the benefit of people who don't click links:

Graiver said to expect to pay a down payment of at least 10 percent, and have a FICO credit score of 620 or higher in order to get a rate between 6.2 and 7.5 percent. Perhaps 90 percent of home buyers qualify for that prime rate, although if you want a rate below 7 percent you probably need a FICO score above 660.

To get the best deal, "plan on coming to my office with your tax returns and a down payment," said Bob Mouton, President of the Long Island-based American Mortgage Group.
If you're among the 10 percent of the people with credit scores below 620 who need a subprime mortgage, things could get tricky.

"To a large extent, they are going to find that no one wants to lend to them," said Steve Habetz, president of Threshold Mortgage in Westport, Conn. "Those loans are being eliminated from the marketplace."

Someone with a credit score of 600 might have to pay as much as 9.5 percent, according to FICO, which provides lenders with borrowers' credit ratings.

I hate to say it, mainly because I want to sell my house and move, but it's for the best that credit tighten again. It was too hard in the late 1970s, but it's far too easy today.

It's been too easy to get credit, and the recent changes in the bankruptcy laws make it harder to wipe out debt. That tells me the housing crunch that some markets face now is only the beginning of a larger, wider problem that no one is talking about.

Someone tell me I'm wrong.