The Gaming Den

I am ragging on Crissa because she is questioning the use of the word "sound", when she herself is showing that the American credit screening screening is decidedly unsound because it allows retarded lenders to give money who shouldn't have been given loans in the first place (which is the whole fucking point of credit screening).

Which is the root of the whole problem. Without these bad loans, the mortage system - the lending companies, banks, and others - wouldn't have blown up.

violence in the media wrote:It does sound like he's partly blaming the mortgage lenders and banks for the debacle by zeroing in on particular cases of potential fraud and/or poor diligence.

Correct, I am not blaming any poor people. Anyone who thinks so is probably just who has had a beef with me personally and didn't bother to fucking read what I actually wrote. Again.

To clarify though, I am assigning most of the blame to the lenders and banks for poor diligence. They should have done their homework and not given loans to people who wouldn't have the capability to pay it back. Giving three seperate loans for the same piece of collateral is simply stupidity - because it means the lending companies allowed a person to ger 3X the loan he/she should have been able to get based on their collateral.

Yes, all lending is a risk. But doing this means you lent 3x more than what the bank's policys states is acceptable risk!

Though I am curious about why a purportedly free-market type is raising objections about a salesman being unconcerned with anything beyond making the sale at hand? That's implying a level of nannying that I can't imagine you'd actually be comfortable with, in this or in other aspects of life. Loaning money is ALL gambles and risk, even with the most desirable of borrowers.

Because I'm not a free-market type. I'm a "fuck ideology" type. Ideologies like liberalism and conservatism are both just modern-day replacements for religion anyway - shitty dogma that ends up messing things up.

Go with what works, not with what you think will work because Obama said so (if you're a liberal fanboy) or just because Palin said so (if you're a conservative fanboy).

How does it work in the Philippines?

The Philippine mortgage system (in my view) was a bit more robust than what I was told of the US for the following reasons:

First of all, the main mortage system in the Philippines (Pag-Ibig Fund) is geared towards making sure every Filipino can own a home. It is NOT meant to be a way to get a loan for other things (like setting up a business) and you put up a house as collateral. Because of this, you can only have one loan under the mortgage system, period. You can only use that loan to buy one house, period. If you want another loan, you need to pay of the entirety of your loan first. If you try to put up your house as collateral to a local bank, the bank checks the mortgage system first.

Secondly, there is a pretty stringent loan assessment and processing system - which involves having an assessor take a look at the property, employment checks, background checks, and a lot of other stuff. In fact, you are also REQUIRED to take a seminar where you are briefed on what exactly the mortgage policies are. If you're late just 5 minutes from attending the seminar, you are forced to take it again (like I did ).

In short, you are NOT allowed to sign the fucking loan form unless you sit through two hours where a speaker keeps reminding you of everything you can and cannot do with the loan.

Despite this, the processing time for a loan doesn't take more than a few weeks. I waited about 2 months for a loan of $15K, so despite stringent checks it doesn't actually take forever to do so. OTOH, every legally employed Filipino worker does pay $5 a month as a sort of tax to pay for the Pag-Ibig's day-to-day operations, which US residents prolly don't have to pay.

Thirdly, our mortgage system is technically non-profit, and its object is to get more people homes, not earn money for the government. That's why its day-to-day operations are paid for via the aforementioned tax. And the interest is used mainly to cover for bad loans. And the interest rates are fairly low compared to a bank loan. Local banks typically charge 11% for a housing loan. The mortgage system can go as low as 6%.

As an added bonus, you can pay back the loan any time you want without pre-termination charges. The mortgage fund is perfectly happy if you pay your entire remaining balance (without the interest) a few months into your loan, because again the system isn't really geared to make money.

Better yet, there is a very strict policy regarding interest rate adjustments. I don't recall exactly (but I have it in my seminar-issued forms) but interest rates can only be changed once every five years, never increase more than 2% if they do change, and they must never go above the prevailing market interest rate. So while houses can still be foreclosed because of personal calamity (i.e. losing a job), these tend to be the exception rather than the rule because as long as you maintain your existing income, you should be able to keep paying the same monthly installment.

Of course, far fewer Filipinos own a home than Americans do. However, given that most Filipinos earn something like $2000 a year, our problem is people not having money to do anything, not our credit policy being retarded.

K wrote:The problem with the lending crisis is not that the wrong people were getting loans, it was that they were getting variable rate loans that cause your monthly payments to skyrocket the instant the interest rates go up (which they always do).

That is an unsound credit policy.

The reason why you have a credit policy is to make sure that only people who can pay back the entirety of the loan can get a loan.

Yes, there is a chance that people will suffer a calamity and can't pay it all back, but the point remains: You gave $1M to somebody plus interest. You don't want to get back just the first 10 month's installment for a fifteen year loan. Getting people into loans knowing they won't be able to pay for rising interests is fucking retarded.

Sure, you get a house or some other collateral if they default. But that just adds a liability to your books. A house doesn't earn money for a bank unless it's sold for a profit (which it often doesn't). A house can't be lent to a loan applicant. It is incredibly stupid for a bank to create a system where you intentionally jack up interest rates so you will end up blowing up lots of loans and end up owning houses you don't need or want.

Ultimately, I'm still inclined to believe the root of all this is that banks were lending money to people they shouldn't have, in the name of short-term profits.

Before the US mortgage system went KABOOM, many of the international banks based in the Philippines had MASSIVE programs that encouraged people to get credit cards. And there was huge pressure on the people handing the credit cards to get sales - because apparently the banks (or their CEOs and Chairmans, more specifically) wanted to show they were earning tons of revenue through loan interest payments. I've heard rumors of managers and sales people dying of stress due to the pressure. (Because despite all their efforts, credit card usage in the Philippines remained tiny and people were enormously suspicious of all these supposed "0% interest" deals)

And the funny thing? This credit card hysteria among the banks died at the exact same time the credit crisis hit America. Suddenly, it was again hugely hard to apply for a credit card and you didn't just have to fill out a form with little checks.

Count Arioch the 28th wrote:I hate Zine because today it was less hot anywhere in the phillipines than it was here (36 C, if you're interested)


Hate hot hate hot hate hot hate hot hate hot

Temperatures are low because of storms that killed 70 people.

... Though before you think of us as uncivilized savages, the same storm killed about as many people in Vietnam, and a similar one hit China killing 700.

Hell, the last time a major seismic event hit us (i.e. The biggest volcanic erruption in 80 years) the death toll ran to 500. Which while high for American standards, is tiny compared to the aftermath of the Asian Tsunami and the Haiti Earthquake.

Zinegata wrote:

Count Arioch the 28th wrote:I hate Zine because today it was less hot anywhere in the phillipines than it was here (36 C, if you're interested)


Hate hot hate hot hate hot hate hot hate hot

Temperatures are low because of storms that killed 70 people.

My sincere apology for my ignorance and insensitivity.

Well, it was hard to get credit cards for the same reason as mortgages: All credit comes from the same international pool. Individual banks can choose whether they're getting their leverage from depositors or prior investments, but that puts them at a competitive disadvantage.

Our line of consumer credit shrunk 10%, then 50% and then was cut altogether this spring; while at the same time our income grew 10% and our debt obligations were cut to equal when we had the higher credit line.

The bank is back to trying to get people to apply for credit, but they don't want us - we use it.

-Crissa

I'm not referring to the credit line. I'm referring to the fact that in the Philippines, there was a point when you could get a credit card by just submitting a company ID and a pay slip (no other checks), and now we're back to a long drawn-out process.

Why does shopping around for student loans drop your credit score int he US? That is retarded.

cthulhu wrote:Why does shopping around for student loans drop your credit score int he US? That is retarded.

"Pulling your credit score" drops your credit score in the US, and this is an extension of the policy. If you want to shop them without a continually lowering credit score, you need to do it on the same day and then not afterwards because you'll have a lower score from all of the pulls.

This is also why the "shop 20 loan" sites [Edit:like Lending Tree] are likely to get your business even if the actual loans suck. After 20 individual credit pulls and offers in a day, anything you check after is going to have crappy numbers to work with.

You can also pull your own credit score and then shop around and not allow them to pull your credit score. This is normal behavior for mortgages now, since they want you to shop around.

Other types of credit, not so much.

-Crissa

PS: Credit card == line of credit

Oh, here's another thing about credit scores that's aggravating: HR departments running checks on applicants.

Apply for too many of these jobs? Your credit score goes down, and you won't get those jobs.

-Crissa

Crissa, from your own link:

[url=http://slacktivist.typepad.com/slacktivist/2010/07/credit-scoring-and-unemployment.html?cid=6a00d8341c582a53ef0133f27b442c970b#comment-6a00d8341c582a53ef0133f27b442c970b wrote:Thread Commenter[/url]]"This is what the use of credit scoring in employment decisions means: Looking for a job disqualifies you from being hired."

Not so fast. This is incorrect. I've worked for insurance agencies and debt collection agencies and I know for a fact that this is not correct. There's a difference between a hard inquiry and a soft inquiry: http://www.myfico.com/CreditEducation/Q ... Score.aspx

Also from Equifax: http://www.experian.com/credit-educatio ... -faqs.html (at the bottom; emphasis original)

Q: Does every inquiry affect a credit score?

A: Anytime your credit report is pulled — including when you order a copy of your credit report directly from the credit reporting agency — an inquiry is added to your report. Only some of those inquiries appear to creditors and therefore impact your credit score. Inquiries that were made for credit cards or loans for which you applied will be shown to creditors and are counted in a credit score. Inquiries added when you request a copy of your own credit report or when an employer checks your credit report do not appear to creditors and will not affect your credit score.

When you request your credit report directly from Experian, it shows you all inquiries. This is done so you know who has been looking at your credit. Some inquiries on your report are accompanied by a description of why the report was pulled.

Additionally, the article's author amended the article at the end because there's no proof that soft credit pulls affect your credit score.

Maj, that wasn't there when I posted.

Also, you're awfully quick to support a corporation who has absolutely no transparency. They can barely tell apart my creditors and faulty records, you really trust them to know what's an employer and what's not?

Besides, anyone unemployed is hardly going to keep a stellar credit record for long. Checking credit should seriously be illegal for reasons which are already on the books, like said in the article I linked.

-Crissa

Crissa wrote:Maj, that wasn't there when I posted.

My screen claims you posted your link on July 23rd at 3:47 pm. That comment read as being posted on July 22nd at 6:21 pm.

Obviously there's a significant time difference between message boards. My bad.

Crissa wrote:Also, you're awfully quick to support a corporation who has absolutely no transparency.

When I point out that there's no proof that a soft pull on your credit report affects your credit score negatively, then I'm supporting a corporation?

You're awfully quick to decide what I believe in.

Your post directly states, "Apply for too many of these jobs? Your credit score goes down, and you won't get those jobs."

There isn't any evidence of that. You can go ahead and promulgate corporate suspicion - that's cool. I'm actually with you there. It's just the blatant misinformation that gets to me.

It's not blatant misinformation. That would require it to be blatantly obvious of anything the scoring companies do. And it's not. We only have their word to trust them, there's no way to check it.

-Crissa

Lago PARANOIA wrote:I wonder if people will be smart enough so that when the double-dip recession comes from the Democrats not taking things far enough they won't mindlessly turn to their opponents whose response is 'more of the same'.

Probably not. The illusion of prosperity is more important than the reality of prosperity. It feels like I'm sharing a budget with fucking Blanche DuBois.

Man, do I hate being right.

Lago PARANOIA wrote:

Lago PARANOIA wrote:I wonder if people will be smart enough so that when the double-dip recession comes from the Democrats not taking things far enough they won't mindlessly turn to their opponents whose response is 'more of the same'.

Probably not. The illusion of prosperity is more important than the reality of prosperity. It feels like I'm sharing a budget with fucking Blanche DuBois.

Man, do I hate being right.

Be truthful Lago. It feels good to be right

I'm still snickering over how Frank, K, and Crissa jumped on me when I complained about the healthcare bill and how it would hurt the Democrat's chances in November.

They were telling me that there would be 14 million more people voting for the Dems today. They don't seem to have shown up .

Really when someone dings your credit score, it's a soft hit rather than a hard hit. I don't know the formula for it but it requires multiple soft hits before a score dip.

Well PA just voted for less public transit, even crappier snow removal, letting our bridges fall into our rivers and allowing out of state drillers to do whatever they want with the natural gas reserves in the Marcellus Shale regardless of consequences to the water supply.

Yay Democracy!

But I'd still like to at least pretend it made have turned out better had Obama did the fucking math I pointed out when I started this thread. It really seems to me that the "choices" in US elections are between a party that misinterprets data to come up with ineffective policies, a party that is in outright denial of basic science and third parties who, by rule, have zero chance of ever winning anything meaningful.

Zinegata wrote:

Lago PARANOIA wrote:

Lago PARANOIA wrote:I wonder if people will be smart enough so that when the double-dip recession comes from the Democrats not taking things far enough they won't mindlessly turn to their opponents whose response is 'more of the same'.

Probably not. The illusion of prosperity is more important than the reality of prosperity. It feels like I'm sharing a budget with fucking Blanche DuBois.

Man, do I hate being right.

Be truthful Lago. It feels good to be right

I'm still snickering over how Frank, K, and Crissa jumped on me when I complained about the healthcare bill and how it would hurt the Democrat's chances in November.

They were telling me that there would be 14 million more people voting for the Dems today. They don't seem to have shown up .

I have several people in my social circle in the medical profession (One Paramedic, one RN). And the obama health thing was a big deal when it was new.

And they both said that in the end, it wasn't really that different from the way things were done before, and both the panicking that it would destroy the industry was groundless as was the people assuming that it would fix anything. Which is what I predicted.

I think one problem Americans have is that we scream and overreact too much.

Hence the rally to restore sanity.

Count Arioch the 28th wrote:And they both said that in the end, it wasn't really that different from the way things were done before, and both the panicking that it would destroy the industry was groundless as was the people assuming that it would fix anything. Which is what I predicted.

Well, I wasn't arguing that healthcare would destroy the industry.

I was questioning the wisdom of passing a trillion dollar healthcare bill when it was pretty clear at the time that the big issue of 2010 would be "It's the Economy, stupid."

I was told 14 million people would be so grateful they'd vote Democratic in 2010.

So... no. Passing healthcare did end up hurting the Democrats. A lot. Because as of 2010 it didn't really do an awful lot yet.

The healthcare bill didn't hurt the democrats in the last election. The election was 100% about the economy and the minor healthcare changes had no impact at all at the polls. The democrats were 100% nailed to the wall because when the economy was 2.5 trillion dollars short in investment, they offered a 700 billion dollar stimulus and told everyone that it was going to be plenty.

The fact that the Republican plan of providing a negative stimulus package would have been even worse did not stop the party in power from losing seats. Because it's a 2 party system and Americans are kind of stupid. When things are going badly, they always vote for the "other party" even when things are going badly because the other party fucked things up in the first place and the current party in charge's major problem is that they aren't behaving differently enough from the other party.

Until the depression is over, the house is going to change hands every two years. That's simply how our system "works".

-Username17

To be absolutely fair, Frank, a large portion of people vote for the other party because they don't want them to become insulated from their actions. As in, it's a message of 'just because you're less bad than the other guys don't think we won't cut off our noses to spite our face'.

Playing Chicken is a valid way to control the party. I can tell you that labor/LGBT activists/human rights activists were NOT amused by Obama's whole 'even if I don't do what you want, we're still better than the other guys so you'll just have to play along'. Stuff like this does in the long run help out. The problem is that it doesn't discriminate between people who are resting on their 'not as bad' laurels and those trying really hard but coming up short. YMMV on which one it is, but I can tell you that the LGBT movement was super-not-pleased with Obama's footdragging.

I will never, ever buy the "lesser of two evils" approach. If Obama cannot perform a 180 on his truly horrendous civil rights record, he will not have my vote in 2012. Perhaps a third party will (because I won't vote for the greater of two evils), but he will not.

Surgo wrote:I will never, ever buy the "lesser of two evils" approach. If Obama cannot perform a 180 on his truly horrendous civil rights record, he will not have my vote in 2012. Perhaps a third party will (because I won't vote for the greater of two evils), but he will not.

Vote for the Socialist from Nicaragua.