Your Credit/Your Government/A Dirty Little Secret

This is an interesting article on many levels. First, the intended subject, to tell people that applying for loan modification will do a great deal of damage to their credit scores, is an important fact for people to know, but within the article just look at some of these things. Two government approved counselors, charged with giving advice to troubled homeowners, profess a lack of knowledge of this consequence of their counseling and are surprised at the "unfairness" of the practice of lowering scores for people who confess to being in trouble with their finances. The naive lack of understanding of the purpose and function of scoring may be excusable on the part of the borrower, certainly not on the part of a credit counseling professional. Credit scores are not the equivalent of a star on the forehead as a reward for past behavior but are designed as a predictor of likely future behavior and a warning system for future creditors. Applying for loan modification, much like hiring a credit consolidator, is an admission that things are not going well, and the precise duty of a credit reporting agency is to hoist the flag of warning for future creditors, and the mechanism used is to reduce the score. The person in this article adopts the attitude that someone should have told him. This is pretty much typical blame shifting behavior and a much better approach would suggest that he should have asked. Actions always have consequences. On a broader note, as an included point in the article, he went from a Public sector job to a private sector job and took a pay cut of approximately 30%. This is simply a stark example of the fact that public sector employees, in general, are paid too much and have much too generous benefits, which are about to overwhelm the economies of all governments, local, state, and federal. The pension programs and pay schedules are unsustainable and the current state of the economy is only revealing what has been bubbling to the surface for some time.
Our office stands ready at any time to offer counseling to people headed for, or already in trouble with real estate debt. We don't charge a fee and we don't have any hidden agenda to sell you anything. When things get better maybe you'll remember us kindly and then we can do some business together.
Just in case you thought things were getting better, here's another article for you on California real estate.
As usual,
Thanks for visiting.