Surviving the Bank Crisis

Newsweek, July, 2008 by Linda Stern

Last week’s banking news—the federal government stepped in to shore up mortgage-buying giants Freddie Mac and Fannie Mae and to take over the bad-loan dependent IndyMac Bank—left many consumers in a panic. But some experts see the intervention as an opportunity for folks to get their finances in order. “This is all good news for consumers,” says Kathleen Day of the Center for Responsible Lending, a Washington policy group. Here’s what the events mean for you.

• Mortgage shoppers: Last week’s actions may ease the supply of mortgage money, but qualifying for those loans remains a challenge. “The traffic has picked up, but only about half the people coming in are qualifying for a loan and having enough money to do the transaction,” says Marc Savitt, a mortgage broker from...