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February 24th, 2009
02:38 PM ET

Public funds to pay for private debt

Carolyn Feibel
The Houston Chronicle

Houston taxpayers could start footing the bill to help first-time homebuyers pay off debts and improve their credit scores, under a proposal before City Council this week.

The “Credit Score Enhancement Program” will give up to $3,000 in grants to individuals who are trying to qualify for mortgages through the city’s homebuyers assistance program. City officials say some applicants fall short of eligibility by only 10 or 20 points on their credit scores, and paying off some debt balances can quickly improve their numbers.

The proposal has aroused critics who say the city should not use public funds to help people pay down car loans, credit card balances, or other debts — even if the slight credit bump would help them realize the dream of home- ownership.

“We just can’t give away government money to help people with their credit scores,” Councilman Mike Sullivan said Monday. “You’re giving them other taxpayers’ money to pay off the bills.”

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Filed under: Bailout Turmoil • Housing Market
soundoff (15 Responses)
  1. J.V.Hodgson

    JIM M
    Very creative, and better than the proposal, but they should have to pay it back also when the house mortgage is clear down to 50% or say 75% of the loan, otherwise it could be never ending.
    Regards,
    Hodgson.

    February 25, 2009 at 12:43 am |
  2. kim

    I live in Patterson CA my house is on the brink of being foreclosed.My loan is with Countrywide who by the way got bought by B of A 85% of sub-prime loans here in ca are with counrywide.who are only offering more interest only loans posing as helping which it is not only more of the same. Nether B of A nor Countrywide have any accountability.

    February 24, 2009 at 11:48 pm |
  3. Suze Foreste of Brooklyn

    I can't beleive that the Republicans are still in denial. When they will realize that they are the ones who lead us into the recession? Yet they claim that they have the best plan for the country. I am scared everytime I hear them talking about the economy.

    February 24, 2009 at 10:57 pm |
  4. Ray

    I was disappointed that President did not mention anything concerning Border Security, a most important aspect of our national security.

    Ray
    N Falmouth Massachusetts

    February 24, 2009 at 10:48 pm |
  5. EVR

    If you want to play with public money. Cut the interest rate for all homeowners to 4% make it an executive order. Jim Kramer(Mad Money) agrees. It will truely stmulate the economy. We all would have more money to spend. Sales Tax revenues will grow. Foreclosures will slow. It is to simple! The banks can raise your rate with the flip of a switch they can lower it also. Stop the smoke and mirrors. Keep It Simple.

    February 24, 2009 at 10:45 pm |
  6. leila

    hello
    what about people who lost their home
    any plan for them or any loans?

    February 24, 2009 at 10:21 pm |
  7. Jim M

    Creative, but .... it would seem like a more realistic alternative might be to make the $3000 part of a non-interest loan to be paid back when the house is resold.

    February 24, 2009 at 7:50 pm |
  8. sharon, cape breton

    I'm all for lending a hand when one can, but this doesn't sound right. I can't truly speak for her, but If one of these people wanting a grant to qualify for a mortgage wrote into Suze Orman and asked "Can I Afford It?" (a house) I think she would answer with a big time no. As I understand it, the thing that got a lot of people into their own personal finance mess was a mismanagement of their funds. If people have debt and their credit score isn't what it should be to qualify for a mortgage, then doesn't it make sense to wait, clear there scores and then try for the mortgage? If they don't have a lot extra hanging around to pay off their debt, then how are they ever going to afford the house and all the stuff that got them into debt in the first place. Not to mention all the stuff that comes with getting their first house. I think if they do give out these grants, the one's getting them should also get a lesson in personal finance.

    February 24, 2009 at 7:14 pm |
  9. Annie Kate

    I did the read more and it looks like they have tabled that idea. They did allow that it was the sort of thing that got our economy in trouble to begin with. I wouldn't appreciate my tax dollars going for this and I doubt others would also. No one helped me pay my bills and maintain a good credit score – especially the government. I think the government is getting too involved on this level.

    February 24, 2009 at 6:09 pm |
  10. Bill

    How about, instead of,

    Public funds to pay for private debt

    Public funds to pay for private profit

    Look up "for-profit university scams" on the Internet.

    Where are the tax dollars going?

    February 24, 2009 at 5:40 pm |
  11. GF, Los Angeles

    I can't believe that this idea existed in the first place. People must be held accountable for the decisions they make. Otherwise why should anybody be responsible in the future if the government keeps helping them out. Enough is enough!

    February 24, 2009 at 5:27 pm |
  12. Neo

    They're going to take money from tax payers instead of their own pockets? Not wise.

    February 24, 2009 at 4:14 pm |
  13. earle,florida

    It's a start in the right direction,and on the plus side maybe should spark some interest in investigating the "Untouchable Three"! These credit reporting agencies have ( years) been to close with their creditors to begin with? Interesting

    February 24, 2009 at 4:03 pm |
  14. Michael "C" Lorton, Virginia

    Not a very good idea--you adding "insult to injury" at the taxpayer's expense---has anyone asked the "taxpayer" to buy in to this? We can help some of the people some of the times, but we can't help all of the people all of the times--I feel sorry for all those who lost their jobs--and how it is affecting their lives--but for those who signed on the dotted line, willingly and knowingly, that they were not going to be unable to meet their mortgate payments-–the price you pay for the life you choose.

    February 24, 2009 at 2:53 pm |
  15. Michelle Piercy-Cox

    Anderson I love you & think you are great 🙂 Can you please help me?

    I think it is very sad that Missouri would not let my husband file unemployment for the weeks that he was not able to work due to bad weather. He worked here in Kansas since July paying MO taxes. When job was done Oct 23,08. He choose to better himself & start a family. My name is Michelle S Piercy-Cox my husbands name is Christopher S Cox. The more & more I sit here at work & listen to all these people drawing unemployment benifits on top of what they are being given NOW. I get very upset with the way people are treated, I basically supported our family on my salery because mo denied my husbands from working in Kansas due to snow or ice. What a shame! I wish Obama could here my story. I have good credit I pay my bills on time & I own my home on my own with 4 teenage boys. Thank you MO for your help with my husband.

    Sincerely,

    Michelle S Piercy-Cox
    Please look me up...I am furious with MO right now!

    February 24, 2009 at 2:46 pm |