BLOOMINGTON — Carol Thomas faced the ultimate fear last summer: the possibility she would lose her home to foreclosure.The interest rate on her adjustable rate mortgage reset, and her affordable home payment jumped $300 a month.“There was just no way," Thomas said.Thomas has felt a range of emotions since then; she's been scared, furious, concerned and overwhelmed. But with the help of the Central Illinois Organizing Project, Thomas was able secure a fixed-interest rate loan and keep her house. After months of worry, the nightmare is over, even if it's going to take some time for her to realize she's now safe at home.“I'm overwhelmed with happiness, trying to relax," Thomas said at a press conference Thursday at her house on Graham Street in west Bloomington. “I'm having a hard time not worrying about it."That's no wonder after what's she been through.The 69-year-old widow has lived in the one-story, two-bedroom home for 12 years, but she's lived in the same neighborhood for 35 years.

Mortgage insurers get tougher on buyers

Private mortgage insurers are demanding larger down payments and higher credit scores and otherwise limiting the loans they will back in Colorado and elsewhere.

The restrictions add another hurdle for borrowers, who increasingly need insurance because they can no longer borrow the 20 percent down payments that lenders require on conventional mortgages.

"It will definitely mean fewer buyers because people don't have any more money for down payments than they did a year ago," said Ryan McMaken, a spokesman for the Colorado Division of Housing.

MGIC, the nation's largest mortgage insurer, put metro Denver and Weld County on its list of "restricted" markets this month.

That means MGIC will only insure up to 95 percent of a home's value versus 100 percent or more in other markets.

David Prosser's Outlook: Borrowers play musical chairs as the credit crunch hits mortgage lenders

Ever since the credit crunch began to make headlines last spring, one of its curiosities has been the limited impact of the crisis on consumer confidence in the UK. Despite all expectations to the contrary, spending on the high street has not slowed markedly, and aside from the slowdown in the housing market – long overdue in any case – there has been little evidence of the crunch's effects being felt too seriously beyond the City.

One reason that confidence has held up so strongly is that, until now, the credit crisis really has had little impact on most people. Unemployment has continued to fall in recent months and inflation remains under control in most areas of the economy – in fact, the most serious threat to living standards has come from rising utility bills rather than Northern Rock and Bear Stearns.