Letter: High standards must be met for bill consolidation loans

It is completely obvious that syndicated columnist Andrew Glass knows nothing about bill consolidation loans. He indicated that these loans are being marketed to homeowners with lower incomes, with limited borrowing power or with soiled credit ratings.

In reality, it is the exact opposite of this. Borrowers who get these loans must meet stringent credit requirements and many do not qualify for the loan.

Credit scoring is a major criteria to determine if the borrower is eligible for the loan and how much money they can get. It is interesting to note that the FHA loan program allows lower credit scores than debt-consolidation loans, which he feels are for people with bad credit.

Additionally, he mentions the problem of when balloon loans are involved. Balloon loans are not a part of debt consolidation loans at all. He seems to want to lump debt-consolidation loans, which are second mortgages, along with sub-prime first mortgages.

That is the problem with this column. It is criticizing a loan product based on information which is not factual.

Jeff Dixon

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