Plan on buying a home or refinancing in the near future but know your credit may be less then perfect? You better think about improving your credit score first. Take a look at an announcement by Freddie Mac last week.

McLean, VA – Freddie Mac (NYSE: FRE) today announced that it will cease buying subprime mortgages that have a high likelihood of excessive payment shock and possible foreclosure.

Over the last several years lending requirements for borrowers have been reduced to virtually nothing. If you were breathing, you could have bought a house. These easy lending requirements were a blessing for a few. For the majority and our economy, it was a disaster built on greed.

Simply put; lenders took loans knowing full well they were garbage. They wanted their fair share of the frenzied housing market. But in the wake of 27 subprime lenders blowing up, the market has been forced to react.

How’s that for a leading lagging role in combating predatory lending practices? Let me rant for just a moment. To me, it appears Freddie Mac is attempting to sound like they’re stepping in to save the day by tightening lending requirements.

Let’s be honest here Mr. Freddie, you played a significant role in this bust because of greed. Now you’re stepping in to fix your mistakes and a little late at that if you ask me. You screwed this entire thing up. One could almost compare this behavior to PAY DAY LOANS only on a larger scale.

Setting all blame aside, let’s look at what this really means. In my opinion not much, it just means the market over time, will function like it should have in the first place.

All it really means is that people with subprime credit (my guess is about 85% of America) need to get their credit score, finances and records in order before buying a home.

You don’t have to have an 800 fico score, or a six figure income to buy a home. It just means if you plan on buying, or refinancing in the next year or two it would be a good idea to pull your credit, and tighten up any loose ends that would have been overlooked up until now.

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