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Old 10-11-2008, 08:01 PM
 
Location: Glen Mills
708 posts, read 859,102 times
Reputation: 444

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Credit Scores in determination of Mortgages should be suspended. I have been a part of the Mortgage Industry for years and have seen its ups and downs. Obviously now we are in the throws of its downs. The Mortgage Industry in its downs has managed to attempt to place mortgages with minimal costs and supervison. Part of this idea was the implementation of Credit Scoring as the end all in determining qualified mortgage applicants. Its clear that credit scores can determine the well qualified but it is impossible to gauge the risk involved in the marginally or unqualified. Action should be taken now to suspend credit scoring as the primary factor in judging credit risk. Go back to the earliest days before its implementation and track its record. It is not as effective as led to believe. Humans have the ability to analyze risk and it cannot be tempered by rate or score analysis. It has to be coordinated by a host of factors that only a human trained in mortgage underwiriting can analyze. If you agree write. We are only in the thousands but a single note to the Government can tell them to change course and get mortgage underwriting on track. I hope you take the time and email either your congressman or to this website: askus@wshfc.org. Taking action can make a difference. Enough of trying to get rich by doing as little as possible. Its time for sensibility. Let us voice our opinion and tell the Legislators we want mortgage underwriting on track and responsible.
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Old 10-11-2008, 08:10 PM
 
13,779 posts, read 23,788,030 times
Reputation: 7410
It is funny you posted this because I was asking my father about it the other day. If credit ratings are not suspended or modified to accomodate the massive amounts of defaults that are expected, when all of this has been "fixed" people will not be able to get homes because of poor credit or the mortgage companies will start lending the funny money again...Catch 22.

Thanks for the link.
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Old 10-11-2008, 09:14 PM
 
16,300 posts, read 25,032,057 times
Reputation: 8284
They should like when I got my first mortgage in the early 70's.

You prove that you have the income to repay the loan, including all of your other debts. My employment was verified with my employer, the bank did their homework.

Mortgage brokers that are approving mortgages knowing the borrower doesn't stand a chance of keeping up payments, but they don't care, they get their commission, and move on to the next victim.
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Old 10-11-2008, 09:19 PM
 
Location: At my computador
2,057 posts, read 3,095,996 times
Reputation: 510
By being in "the mortgage industry", were you a loan officer or processor?

Credit score is only one aspect of a program's requirements. For those people on the verge of default, as the Fed starts sorting this mess, they'll develop programs with lax credit scores to accommodate the turds.

Credit scores are great tools.
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Old 10-11-2008, 09:21 PM
 
Location: At my computador
2,057 posts, read 3,095,996 times
Reputation: 510
Quote:
Originally Posted by Asheville Native View Post
Mortgage brokers that are approving mortgages knowing the borrower doesn't stand a chance of keeping up payments, but they don't care, they get their commission, and move on to the next victim.
That's BS. The broker has a fiduciary responsibility to get the client the loan. You're placing blame where it doesn't belong.
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Old 10-11-2008, 09:27 PM
 
15 posts, read 24,134 times
Reputation: 16
My reply to One Thousand's comment is that credit score play a very major part in the process. A conforming conventional loan starts the process after looking at
the credit score. If the minimum credit score is not met, nothing else is considered.
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Old 10-11-2008, 09:29 PM
 
4,135 posts, read 9,448,774 times
Reputation: 2687
Quote:
Originally Posted by Asheville Native View Post
They should like when I got my first mortgage in the early 70's.

You prove that you have the income to repay the loan, including all of your other debts. My employment was verified with my employer, the bank did their homework.

.
I totally agree. In my area, you needed 20% down and had to have a job where no more than 25% of income was for the mortgage. (early 1970s).
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Old 10-11-2008, 09:41 PM
 
16,300 posts, read 25,032,057 times
Reputation: 8284
Quote:
Originally Posted by One Thousand View Post
That's BS. The broker has a fiduciary responsibility to get the client the loan. You're placing blame where it doesn't belong.
And that explains all the mortgages in default, because brokers did such a great job. Okay what ever............
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Old 10-11-2008, 11:24 PM
 
Location: At my computador
2,057 posts, read 3,095,996 times
Reputation: 510
Quote:
Originally Posted by alabamapal View Post
My reply to One Thousand's comment is that credit score play a very major part in the process. A conforming conventional loan starts the process after looking at
the credit score. If the minimum credit score is not met, nothing else is considered.
To be conventional is to be conforming. A loan can't be non-conforming and be conventional.

However, to respond to your point, the Fed is going to offer programs for the dirtbags with cockroach-special subsidized with my tax dollars rates.

Quote:
Originally Posted by Asheville Native View Post
And that explains all the mortgages in default, because brokers did such a great job. Okay what ever............
If they turned them down, they'd be in violation of the law. Blame your Congresspeople. That's who did this.
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Old 10-12-2008, 06:57 AM
 
Location: Glen Mills
708 posts, read 859,102 times
Reputation: 444
Default Most Reknowned Senior Member

Credit Scores?!@#$ I have been in Management and as Mortgage Consultant. I have done: Conventional, FHA, VA, Commercial, Industrial and SBA Loans. I had been a part of the Fair Isaacs Initial research applying Credit Scores to the Retail Sales approval process. This I know for sure if I can convince you of a high percentage of accuracy and you could unemploy thousands of people you would accept my theory in a heartbeat and it may take years to tear my theory down and even then with the theories widespread acceptance it would be impossible to disentrench you from this acceptance. If you are a pig and I am not saying you are. This was a big payday and reason enough to unemploy large numbers of decision makers. if you are a business person involved in the credit score industry; you are pleased in application of mirrors to validate a point. The items since time memorial to evaluate Loans and Mortgages is: APIIECJS and S. Ablity to Pay, Paying Habits, Indebtedness, Income, Employment Condition, Job Security and the security if used. This has been expanded in recent years to include Respa and ERA requirements. Believe as you may that credit scores are not the big determinant but thats hogwash. How did they formulate a no doc, no income verification loan, limited documentation, and no income loan in your opinion -- just good guessers!

I started in the business in 1969. I have 39 years of training in mortgages. I remember the other day on the financial news network that a reporter said he knew things were going to get interesting when one of his young relatives was employed in mortgages after his college stint. You can make it easy or you can make it sound. The damage is done now and from the sounds of things you feel this is a great status quo -- God be with you.

Now enter a new era -- I actually saw an ad on MSN that states no SSN required -- pretty nifty. Of course I know what he means but it still implies carelessness and this is what inspired our credit crisis -- Believe it or not>

Last edited by Norm Barnes; 10-12-2008 at 07:21 AM.. Reason: Typos and word use
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