It's no secret that mortgage money dried up during this recession, and the drought is even more pronounced for those looking for bad credit mortgages. In fact, most bad credit mortgage lenders have either gone out of business or found some other way to make money. But most industry insiders agree that lending conditions will eventually get back to normal or something close to it. How long will it take for bad credit mortgage lending to come back? A look at history can tell us.

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An article in The New York Times says that credit has been slower to return to pre-recession levels than in any downturn in the last 40 years -- except for the recession in 1991. So how long did we take to recover back then?

From the worst of that recession (3rd quarter 1991) it took three years for consumer credit to return to normal levels, and four and a half years for home mortgage credit. The 1991 recession, like our current one, also involved a banking crisis (the savings and loan collapse in the late 1980s), which also brought on significant regulatory changes.

So, how does this news affect you?

The most important take-away from this news item is that people with bad credit cannot expect sub-prime lending to return in full-force anytime soon. Even Alt-A lending will likely be curtailed. Elizabeth A. Duke, one of five sitting governors on the Fed’s board, said in a speech in Columbus, Ohio, said, “In no way do we want to return to the world where people could buy a house with no money down and no documentation.” So expect that "normal" in the future won't be the same as "normal" was in 2006.

What can you do?

Make a plan to put yourself in a position to be able to buy. Your first step may be filling out the form on this site. You won't have to provide a Social Security number and you'll learn very quickly if you can get financed now or if you can't. Next, work with a good lender to either get your bad credit mortgage, or to get yourself in a position to buy eventually. A good loan agent can tell you what you need to do to be approvable, and you may also want to enlist the help of a credit counselor.

Just because the mortgage credit markets won't be back to normal for four years doesn't mean you'll have to wait that long to get a home loan. Start your credit problem plan today.