Credit crisis hit close to home -, Albany News, Weather, Sports

Credit crisis hit close to home

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By Delivrine Registre - bio | email

September 22, 2008

ALBANY, GA (WALB) - Clayton Holton says he is a victim. " I have been robbed because my house is paid off, and the equity in my house has gone down."

"With home equity, you may not have as much as you had before because of the foreclosures in your neighborhood," said loan officer, Wanda Bowles. And homeowners in Southwest Georgia are some of the better off in the state. "It is not as bad as the Atlanta area, but there are certain areas in Albany that do have a lot of foreclosures," said Bowles.

The banks that have taken over these mortgages are selling these homes at bargain prices. "Your appraised value goes by what sales in the neighborhood. If their is a house down the road that is valued for $150,000,  but they are selling it for $100,000, your value is going to go down," said Bowles.

"I think that is an injustice to the honest people who live and work to pay off their houses and have their houses devalued," said Holton.

And properties are not only less valuable, but harder to refinance. "The credit criteria has changed a lot. Especially with all of the foreclosures. You will find it harder to qualify for loans even if you have a lot of assets. We are finding some of the loans being turned down," said Bowles.

Lenders are looking further into your credit history. "Before they wouldn't look at anything past 24 months. Now they are going back and taking hits on those. If you have late mortgage payments you will find it difficult," said Bowles.

They are making it tougher to keep the mortgage meltdown from getting worse. Loan officers say you need a credit score of at least 640 if you want to refinance your home.