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Status:
"everybody getting reported now.."
(set 17 days ago)
Location: Pine Grove,AL
29,544 posts, read 16,528,077 times
Reputation: 6029
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Quote:
Originally Posted by EDS_
No sale.
The UK and Germany and others use credit scoring for mortgages much like we do.
Neither the U.K. or Germany's credit score systems are comparable to the US.
(you could argue that the UK is worse)
Quote:
Credit scores are a great predictor of future payment success or failure.
. If the above was true, then credit scores would simply be based on if you pay your bills on time, not debt to open lines of credit ratios, or length of time accounts are open , or oldest line of credit, or number of inquiries vs open accounts.
Quote:
People with good to great credit view it as an asset and protect it.
Understanding how the system works is not the same as thinking the system makes sense.
Your argument seems to be entirely based on you liking the system, rather than actually discussing if the criteria of it makes sense.
Oh, I also meant to add that the real estate sales courses prior to licensure and trainings after you get your license REALLY go on and on about not giving any appearance of discrimination in how you interact with customers. You’re not to answer questions on things like if there are families or kids in the neighborhood, the demographics of it, crime rates, etc. You’re supposed to point them to where they can find that info on their own.
I really do not think it happens much at this point. Those who do it would be outliers and it would be extremely subtle.
When I went through the training we were told that we'd be live tested on discrimination appearances and that we would be delivered or suspended if caught.
There is a difference between "redlining" and "racial redlining".
Banks had maps which categorized neighborhoods by risk. Low-risk areas were in blue. Medium-risk areas were in Yellow. And high-risk areas were in red.
Most banks didn't want to lend money for mortgages in high-risk areas. The only people who could buy houses in those areas were people who could pay in cash. And since these areas were invariably low-income, very few people could pay in cash. Which meant the only people buying houses in redlined areas were investors who had to rent out the houses. But with everyone being renters it meant no one was building wealth, and no one had a personal stake in the neighborhood. Which is why these areas tended to get worse and worse and worse, causing housing values to drop even more.
Redlining was never "racial redlining", but minorities were disproportionately affected by redlining because they were poorer. Likewise, the 2008 financial crisis disproportionately affected black homeowners because "subprime loans" were primarily given to low-income borrowers, who were overwhelmingly minorities.
Indeed. In Baltimore, where I live, the redlining maps are infamous and used as an explanation for the city's racial divide. But few people pay attention to that many of the original redlined areas were white neighborhoods while some of the blue areas later still rapidly declined. Racial attitudes absolutely played a role, as did white flight, but long term trends have always been more complicated than just race. The idea of building up generational wealth in real estate is undercut by that plenty of white people lost badly in real estate decisions over the same time period too.
Found records from about ten years back of a couple of nationwide lenders being found to have regularly discriminated against minority homebuyers in their lending practices-
The UK and Germany and others use credit scoring for mortgages much like we do.
Credit scores are a great predictor of future payment success or failure. People with good to great credit view it as an asset and protect it.
I'd love to see the data behind the predictions. I dropped over 100 points because I was carelessly 3 days late on a $200 credit card bill I didn't realize I owed. 805 to 700. I dropped 40 points once when I sold my motor home and paid off the loan.
That's a good point though about protecting your score.
Neither the U.K. or Germany's credit score systems are comparable to the US.
(you could argue that the UK is worse)
. If the above was true, then credit scores would simply be based on if you pay your bills on time, not debt to open lines of credit ratios, or length of time accounts are open , or oldest line of credit, or number of inquiries vs open accounts.
Understanding how the system works is not the same as thinking the system makes sense.
Your argument seems to be entirely based on you liking the system, rather than actually discussing if the criteria of it makes sense.
You are making my point for me, LOL
Don't flatter yourself. It's creepy and dishonest per our conversation.
1. Distinctions noted. My point was to counter your distortion that credit scoring is really only a US thing. Two very big EU economies and several others use credit scores for mortgages. Period.
2. If credit scoring wasn't viable companies would not pay to use the data/scores.
I'd love to see the data behind the predictions. I dropped over 100 points because I was carelessly 3 days late on a $200 credit card bill I didn't realize I owed. 805 to 700. I dropped 40 points once when I sold my motor home and paid off the loan.
That's a good point though about protecting your score.
Reports still turn up about people who are "steered" away from certain neighborhoods by RE agents, if they're POC. Or if they manage to buy in those neighborhoods, they encounter hostility. As if they crashed the gate, or something. Occasional incidents around the US.
And those reports are likely phony. Considering everyone has internet and there are dozens of mls websites, and demographics galore it's pretty much impossible to "steer" a buyer to a hood they otherwise don't like.
The film isn't about redlining currently. Redlining was made illegal decades ago. It's about historical redlining. People are saying it never existed.
I've been in banking and finance for almost 40 years, and redlining, in one form or another, certainly did exist and did happen at a couple of institutions I worked for. It still exists in one form or another.
To note- non-bank regulated financial companies (which are growing) at one point were not regulated by the Fair Housing Act or the Equal Credit Opportunity Act. That is now changing- https://www.klgates.com/Banks-and-No...zon-10-26-2021
Quote:
The expansion of redlining investigations to encompass non-bank lenders represents a seismic shift in the Department’s historical approach to the investigation and enforcement of redlining. Depository institutions are subject to the requirements of the Community Reinvestment Act (CRA), which require banks to meet the needs of the communities they serve. Every bank subject to the CRA self-identifies the communities that it serves by defining the bank’s “assessment area,” and federal regulators analyze that self-designated area. However, because non-depository institutions are not governed by the CRA, they are not required to define “assessment areas.” The question then becomes: What geographic area will the Department and the federal regulators use to evaluate redlining risks of non-depository institutions?
Classic 'redlining'- the old practice of drawing red lines on a map and NOT offering your services in that area have been largely replaced by algorithms that target product marketing, which happens to disproportionately exclude certain swaths of persons. And non-bank lenders could get away with it because they were not regulated like 'banks'.
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