On Fri, 05 Dec 2008 12:34:31 -0600, wrote:

On Fri, 05 Dec 2008 13:10:55 -0500, Reginald P. Smithers III, Esq. wrote:


Yes, it had to do with packaging bad loans with a high probability of
default, the loans I mentioned above. Those investment instruments
would be a great investment, if the loans were going to be paid, or they
could recoup the money in foreclosure. neither can be done, when there
is no down payment, and the mortgage was for more than the home was
worth. Home loans have been packaged as investments for over 50 yrs,
and probably much longer, and were considered a fairly safe investment,
when we used reasonable criteria for determining who would get the loan.
Once Fannie Mae said, guaranteed that they would buy and resell the
loan, regardless of risk, it opened the flood gates for all banks and
mortgage companies to disregard the ability of the person to repay the
loan.

I would argue a healthy bank should be able to withstand the present
default rates. It wasn't the default rates that brought banks down, it
was leverage. 33 to 1 in Lehman's case.

I would also point out, when you lose 1/2 million jobs, as we did in
November, it isn't only the subprime loans that go into foreclosure.

Thunder, thunder, thunder road....the subprime problem started the
downslide a couple years back -- not in November!
--
John H.

On Fri, 05 Dec 2008 11:12:19 -0600, Vic Smith
wrote:


So all the ads I see on TV inviting morgtage and loan applications are just
a front?

I think you need high FICO scores to acquire those loans.
This country has been running on debt for years.
So the mechanism is broken.
All the squawking about money not being available is from those
already too far in debt.
The squeaky wheel is not getting the oil.

Old saying in the banking business:

"Any fool can lend money out - the trick is to get it back."

Once the gimmicks are gone, sometimes the old way makes sense. :-)

On Fri, 05 Dec 2008 13:10:55 -0500, "Reginald P. Smithers III, Esq."
wrote:

Yes, it had to do with packaging bad loans with a high probability of
default, the loans I mentioned above. Those investment instruments
would be a great investment, if the loans were going to be paid, or they
could recoup the money in foreclosure. neither can be done, when there
is no down payment, and the mortgage was for more than the home was
worth. Home loans have been packaged as investments for over 50 yrs,
and probably much longer, and were considered a fairly safe investment,
when we used reasonable criteria for determining who would get the loan.
Once Fannie Mae said, guaranteed that they would buy and resell the
loan, regardless of risk, it opened the flood gates for all banks and
mortgage companies to disregard the ability of the person to repay the
loan.

The problem was that the demand for packaged loans became almost
infinite as people discovered the so called "carry trade" which used
inexpensive borrowed money from Japan to buy high yielding bonds. It
was almost a license to steal limited only by the supply of bonds to
invest in. Packaging and selling these bonds was also highly
profitable to the investment bankers. Mortgage brokers sprang up on
every corner to help meet the demand, and the money was flowing like
water to anyone who wanted to buy a house or speculate in the housing
market. That pushed up real estate prices across the country
creating the bubble which eventually broke as all bubbles must.

The rest is becoming history.

On Fri, 05 Dec 2008 15:00:18 -0500, Tom Francis - SWSports
wrote:

Go get a car loan from a bank with a 720 credit score.

Go ahead - I'll wait.

Might depend on who made the car.

Tom Francis - SWSports wrote:
On Fri, 05 Dec 2008 12:49:55 -0500, "Reginald P. Smithers III, Esq."
wrote:

Loans are available for anyone with good credit. They are being
selective on who they make loans to.

Really?

Go get a car loan from a bank with a 720 credit score.

Go ahead - I'll wait.

That's your problem, you need to get your credit rating up in the 800's.

"JohnH" wrote in message
...
On Fri, 5 Dec 2008 11:26:55 -0500, "Eisboch" wrote:

Help me out here.

I hear the economy is frozen. Banks won't lend. No mortgages. Hoarding
their bailout money.

Yet, virtually every commercial break on MSNBC or CNN features at least
one
pitch from a major bank or a mortgage company (Ditech comes to mind, which
is a GMAC subsidiary) offering low interests mortgages, loans and "we
have
money to lend" announcements.

So, why aren't they lending? Seems to me that this would be an ideal
time
for people to re-finance for lower rates, etc.

Economics confuses me.

Eisboch



I applied for an LL Bean card over the internet last week. I filled out
the
application, hit the button, and was approved within about seven seconds.
For $31,000! Hell, all I wanted was free shipping and monogramming.

Don't ask me what's going on. I think the liberals just want to bitch
about
banks and anything that's non-union. It'll all get fixed when Obama takes
office.
--
John H.

Not really a good idea to open a lot of credit accounts for the sake of free
shipping, etc. It can affect your FICO score negatively.

On Sat, 6 Dec 2008 08:33:40 -0500, "D.Duck" wrote:


"JohnH" wrote in message
.. .
On Fri, 5 Dec 2008 11:26:55 -0500, "Eisboch" wrote:

Help me out here.

I hear the economy is frozen. Banks won't lend. No mortgages. Hoarding
their bailout money.

Yet, virtually every commercial break on MSNBC or CNN features at least
one
pitch from a major bank or a mortgage company (Ditech comes to mind, which
is a GMAC subsidiary) offering low interests mortgages, loans and "we
have
money to lend" announcements.

So, why aren't they lending? Seems to me that this would be an ideal
time
for people to re-finance for lower rates, etc.

Economics confuses me.

Eisboch



I applied for an LL Bean card over the internet last week. I filled out
the
application, hit the button, and was approved within about seven seconds.
For $31,000! Hell, all I wanted was free shipping and monogramming.

Don't ask me what's going on. I think the liberals just want to bitch
about
banks and anything that's non-union. It'll all get fixed when Obama takes
office.
--
John H.

Not really a good idea to open a lot of credit accounts for the sake of free
shipping, etc. It can affect your FICO score negatively.


You get to a point in life where you don't really worry about your FICO
score. I'm there.

Anyone looking at the two credit cards I carry would never see a dime's
worth of interest paid to either company.

I've actually got a pretty good score, for a guy who was stupid enough to
get drafted.
--
John H.

"JohnH" wrote in message
...
On Sat, 6 Dec 2008 08:33:40 -0500, "D.Duck" wrote:


"JohnH" wrote in message
. ..
On Fri, 5 Dec 2008 11:26:55 -0500, "Eisboch"
wrote:

Help me out here.

I hear the economy is frozen. Banks won't lend. No mortgages.
Hoarding
their bailout money.

Yet, virtually every commercial break on MSNBC or CNN features at least
one
pitch from a major bank or a mortgage company (Ditech comes to mind,
which
is a GMAC subsidiary) offering low interests mortgages, loans and "we
have
money to lend" announcements.

So, why aren't they lending? Seems to me that this would be an ideal
time
for people to re-finance for lower rates, etc.

Economics confuses me.

Eisboch



I applied for an LL Bean card over the internet last week. I filled out
the
application, hit the button, and was approved within about seven
seconds.
For $31,000! Hell, all I wanted was free shipping and monogramming.

Don't ask me what's going on. I think the liberals just want to bitch
about
banks and anything that's non-union. It'll all get fixed when Obama
takes
office.
--
John H.

Not really a good idea to open a lot of credit accounts for the sake of
free
shipping, etc. It can affect your FICO score negatively.


You get to a point in life where you don't really worry about your FICO
score. I'm there.

Anyone looking at the two credit cards I carry would never see a dime's
worth of interest paid to either company.

I've actually got a pretty good score, for a guy who was stupid enough to
get drafted.
--
John H.

I'm pretty much in the same position. I haven't had a loan payment in over
20 years (FICO now 800+) and hopefully won't need one again in this
lifetime. For those that will need credit, the extra baggage on the credit
report won't help.

"D.Duck" wrote in message
...


I'm pretty much in the same position. I haven't had a loan payment in
over 20 years (FICO now 800+) and hopefully won't need one again in this
lifetime. For those that will need credit, the extra baggage on the
credit report won't help.




The last credit report I read indicated that my score was not as high as it
could be because I didn't have a mortgage.

??????????

I am like you and JohnH now. Now that I don't need it, I have all kinds of
credit available and I don't use any of it.

But, I also remember that it took me 10 years to pay off a small balance on
a stupid Hechinger's credit card that I had back in the Navy. Every penny
counted for many years.

Eisboch

On Sat, 6 Dec 2008 11:30:04 -0500, "Eisboch" wrote:


"D.Duck" wrote in message
m...


I'm pretty much in the same position. I haven't had a loan payment in
over 20 years (FICO now 800+) and hopefully won't need one again in this
lifetime. For those that will need credit, the extra baggage on the
credit report won't help.




The last credit report I read indicated that my score was not as high as it
could be because I didn't have a mortgage.

??????????

I am like you and JohnH now. Now that I don't need it, I have all kinds of
credit available and I don't use any of it.

But, I also remember that it took me 10 years to pay off a small balance on
a stupid Hechinger's credit card that I had back in the Navy. Every penny
counted for many years.

I had a guy bug me with some crap about a magazine subscription my
daughter had canceled. It was in my name. He said if I didn't pay
(it was a lousy 15 bucks or so) my credit rating could be hurt.
I basically told him to go ferk himself because I don't care about the
credit score. Don't know how that turned out. I hung up.
But I have heard that insurance companies use your FICO as an element
in setting your premium. Don't know if it's true - but I use it as a
"counseling" tool when preaching the evil of debt to my kids.

--Vic