FICO President: 'Worst to come' for Mortgage Crisis
Submitted by
CalculatedRisk on Fri, 03/13/2009 - 6:14am (36 comments)
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Oh he's just talking his book.
This comment thread has been HALO-IZED by CRbot.
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They did this in round 1 in the 80s also. I asked about qualification at the amount that it would reset to, at least the first time, and was told they just weren't gonna do it.
Oh, and sometimes in the Great Bubble, the lenders wouldn't require escrows for taxes, because the borrowers so obviously couldn't pay one twelfth of the taxes every month. and suprise, suprise, the taxes wouldn't get paid when they were due. And sometimes, after a couple of years, they'd take out 2nd mtges to pay a couple of years of past due taxes.
Wurst to come.
Mmmmm. Sausage.
Historically lenders used the "Three C's": creditworthiness, capacity, and collateral.
Also Class and Color.
Racism does play a large part in who gets a loan, and for how much they pay on that loan.
CNNMoney.com: 404 Page Not Found
Who needs the three c's or FICO or anything....when you are effectively borrowing from yourself?
The lender isn't holding the loan, the investors don't even hold the loan anymore. You do. So what's the point of making assessments anymore?
FICO scores are absolute steaming turd piles. A multi-millionaire who has no debt and one or two credit cards has a low FICO score, but someone with a maximum "prudent" debt load has a high score as long as the payments are kept up. FICO is more a rating on how good a debt slave one is, as opposed to creditworthiness.
Here here!
Many years ago, I subscribed to Dun and Bradstreet. Thought it would be useful to assess customer credit. I found it to be a total waste of money and time because everyone was gaming it.
I suspect FICO is going the same way.
turbo ur so right
Codependency in Corrupt Con game.
Securitized lending is Ponzi.
Chilling. This means millions more with huge debt and little or no income will file for Ch 7 BK. The current scoring system will be meaningless in a few years.
The "credit cards is next" should send a chill down Ken Lewis' spine.
--
FICO is one part of Debt Pushers' toolkit.
Debt Pushers appeal to BBAD by using American Dream, or any American BS, as a come-on. What a bunch of morons who think that mortgage is a vehicle for realization of the American Dream. The truth turns out to be the opposite--American Nightmare.
Debt Pushers need to be gotten rid of.
Jas
"... A multi-millionaire who has no debt and one or two credit cards has a low FICO score, but someone with a maximum "prudent" debt load has a high score as long as the payments are kept up. FICO is more a rating on how good a debt slave one is, as opposed to creditworthiness."
Yes, the stealth campaign to keep the worker bees in debt slavery has certainly succeeded, hasn't it?. A multi-millionaire doesn't need personal credit and often pays cash. The worker bee, on the other hand, has been brainwashed by countless Internet, TV, and Radio ads to covet that creditworthiness as a marker of distinction and trained to take on more of the "right" kind of debt to push the FICO score higher.
Credit cards are still usefull for cash flow. I usually walk around with under a couple hundred bucks. Plus, I get cash back
I wonder how many people really carry a balence. That's the debt slave part.
Bank of America Corp. Chief Executive Officer Kenneth Lewis said his company was profitable in January and February, joining JPMorgan Chase & Co. and Citigroup Inc. in suggesting the nation’s three biggest banks are recovering from a dismal 2008.
Lewis, Dimon, Pandit Proclaim Profits, Spur Banks (Update1) - Bloomberg.com
Sweet of course the country is now insolvent, the people and their descendent's are impoverished for a couple generations but what heck.
You are next!"
The Latest from Yves:
Daily Show and Jim Cramer
Here is your HS diploma, six credit cards and student loan application required to get the needed college degree! What could go wrong? :-$
New Thread: Stewart vs. Cramer
http://www.calculatedriskblog.com/2009/03/stewart-vs-cramer.html ( 0 comments ...You could be FIRST! )
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Tough as I am to get these days, that headline did it!=-O!
I knew some one who worked at D & B many years ago, and that they were told to make stuff up, and there were not enough employees to do the work correctly anyhow. An info Ponzi scheme.
Does D & B exist anymore?
Lawyerliz
They are here Dun and Bradstreet - Credit Reporting - Debt Collection - Marketing Lists demandig payment!!! For Australian Government . :-[
Yes: D&B- Dun & Bradstreet -Global Risk, Credit, Sales, Marketing, and Supplier Management Solutions
Funny that. Very funny. Ha Ha funny... They are the mob colecting government debt in here in OZ.
comment from last thread re US food export/import.
From where I sit, the problem isn't in the raw amounts of food being exported vs imported. On a purely nominal basis of basic foodstuffs, we could easily feed ourselves.
I think the issue is that we as a society/culture have bought into the globalization thing with what it means in terms of foodstuffs. Look at recent recipe books and there are lots of recipes that are fairly exotic and require produce/products that 40 - 60 years ago were really not available. Recipes from decades ago were pretty straightforward in terms of basic ingredients. Because we supply a great deal of basic foodstuffs to other parts of the world - who aren't terribly concerned with English biscuits or more exotic vegetables - our basics are purchased by the world. We in turn supplant some of that by the global stuff.
Also consider the use of corn to ethanol...
I can see all of this turning in the next several years. We can feed ourselves.
.....social chaos is unavoidable. You cannot manage or program social chaos, or pretend to have pre-scheduled social disruptions. It does not work like that.
America eventually will disolve itself, and it will no be pretty. We will not see an organized desintegration of America. At some point, the "rule of law" will dissapear, and it will be filled with social chaos and improvisation. It might not happen today, next week, or next decade....but it will happen.
We all know that......unless an asteroid strike us, and makes the whole cleaning process eaiser and fairer.
Have a great day!
Yes, we are using greater amounts of "exotic" foods, but some of them are substitutes for easily available domestic foods. For instance, you can quite easily purchase pasta made in Italy here in grocery stores. The quality of it is better than most of what is produced in the US (has to do with texture and the ability to hold sauce), but we could produce equal quality here if we wanted to.
You could also quite easily purchase flour, eggs, and salt, and, using the expertise your Nana passed on (along with her old pasta machine), make something far better than anything available in stores, whether made here or in Italy ...
Gee, it turns out that actually being able to swing the payments MATTERS. (all together now) whocoulaknowed?
why is mortgage reset a problem now? Interest rate is at a all time low.
Mortgage reset isn't the huge problem (yet), the bigger problem is mortage recasts. A re-cast is when a negative amortizing (sp) loan adjust it's prinicpal so the loan can actually be paid off. Since the loan was neg-arm, the loan will be for more than the current value of the property.
It's why they're called Option ARM debt bombs.
FICOs should come with a warning: not predictive of future behavior. They are retrospective. That CAN be an indicator, but doesn't have to be.
It's all fun and games until someone loses a job.
Then all bets are off.
It's sad that the idea you shouldn't borrow money for non-income producing assets is a big realization.