Credit Crunch Far Reaching
The Chicago real estate market is one that has undergone its fair share of highs and lows over the last 10 years. Now, as the condo boom continues within the city, and as communities west of the Chicagoland area experience unrpecedented growth, turmoil in the mortgage industry was going to have an inveitible effect on potential home buyers.
The obvious effect of the upheaval in the mortgage industry this summer is on interest rates being quoted to these potential home buyers, however the full force of the credit crunch is now extending to all areas related to credit, and is taking its toll on consumers across the board (Harney, Kenneth. "Tighter Credit Rolls Up Welcome Mats." The Chicago Tribune. 8.19.2007).
Fair Isaac (FICO) credit scores are more crucial than ever now. The traditional borderline between a prime and subprime loan-- a FICO score of 620, has risen, with some mortgage companies quoting a 680 FICO score as the new cutoff. Id.
"I think the days of 620 [FICOs] are about over, investors are just too afraid to take the risk anymore," commented Bob Ambruster, CEO of Ambruster Mortgage Services, Inc. of Lawrenceville, Georgia. Id.
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