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IMHO, consumer credit must be the tightest its been in 30 years. Im no financial whiz, but speaking from experience I have far less borrowing power now than I can ever recall.
 

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Banks will lend to anyone that qualifies. We saw what happened when they lent to a bunch of idiots. If you want a home mortgage today you must have 20% down, a good wage earning track record, and not be carrying a lot of other debt. That disqualifies a lot of people, as well it should.

This is how it was 40 years ago, and we never should have gotten away from it. We did and it was a disaster, because a lot of money was lent to people who had no possible means to pay it back. This isn't a Moon shot to figure out. It is just that people today don't like it because they can no longer be financially reckless, and buy everything they see with money they do not have.

You're going to start hearing a word in the lending industry you haven't heard in a while. It's called collateral. People today have little to nothing to make them anywhere near the term solvent, yet they expect banks to lend them money as if they were validating a parking ticket. It doesn't work that way, and never has. All the banks have done is gone back to solid lending principals. They never should have gotten away from it in the first place. Now, they damn well know it. The problem is it was like closing the barn door after the last horse leaves. Bill T.
 

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Now if the government can do the same thing,no spending without revenue to back it up,these upcoming budget talks are going to be interesting,and I hope the markets pressure congress to get it's house in order.

I think the unemployment data Friday will be interesting.
 

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Hobby = Snail Porn
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Banks will lend to anyone that qualifies. We saw what happened when they lent to a bunch of idiots. If you want a home mortgage today you must have 20% down, a good wage earning track record, and not be carrying a lot of other debt. That disqualifies a lot of people, as well it should.
Wrong! I currently have my house for sale. Those pesky Gov Loans with zero down is still out there. I should be upset about that, and I am. Problem is, THOSE are the only bites out there. :(
 

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Discussion Starter · #7 ·
Banks will lend to anyone that qualifies. We saw what happened when they lent to a bunch of idiots. If you want a home mortgage today you must have 20% down, a good wage earning track record, and not be carrying a lot of other debt. That disqualifies a lot of people, as well it should.

This is how it was 40 years ago, and we never should have gotten away from it. We did and it was a disaster, because a lot of money was lent to people who had no possible means to pay it back. This isn't a Moon shot to figure out. It is just that people today don't like it because they can no longer be financially reckless, and buy everything they see with money they do not have.

You're going to start hearing a word in the lending industry you haven't heard in a while. It's called collateral. People today have little to nothing to make them anywhere near the term solvent, yet they expect banks to lend them money as if they were validating a parking ticket. It doesn't work that way, and never has. All the banks have done is gone back to solid lending principals. They never should have gotten away from it in the first place. Now, they damn well know it. The problem is it was like closing the barn door after the last horse leaves. Bill T.
The article says that Banks are only lending to large corporations, that means not you.
 

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The article says that Banks are only lending to large corporations, that means not you.
The banks are lending to individuals, not just corporations. If they weren't they wouldn't be able to sell house or car one. Think about it and apply common sense. They just are being more selective about who they lend to. Bill T.
 

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Banks will lend to anyone that qualifies. We saw what happened when they lent to a bunch of idiots. If you want a home mortgage today you must have 20% down, a good wage earning track record, and not be carrying a lot of other debt. That disqualifies a lot of people, as well it should.

This is how it was 40 years ago, and we never should have gotten away from it. We did and it was a disaster, because a lot of money was lent to people who had no possible means to pay it back. This isn't a Moon shot to figure out. It is just that people today don't like it because they can no longer be financially reckless, and buy everything they see with money they do not have.

You're going to start hearing a word in the lending industry you haven't heard in a while. It's called collateral. People today have little to nothing to make them anywhere near the term solvent, yet they expect banks to lend them money as if they were validating a parking ticket. It doesn't work that way, and never has. All the banks have done is gone back to solid lending principals. They never should have gotten away from it in the first place. Now, they damn well know it. The problem is it was like closing the barn door after the last horse leaves. Bill T.
Ah, so the housing collapse and lower lending standards were just an accident.

Now the banks are back to solid lending standards(whatever that means in a FRB system) and things will be great again eh?
 

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Interesting thread. I think it is probably right, for the most part. But... with my credit in the mid to upper 600's, I have had no problem getting loans from CU's for a used 2007 F350 (paid it off in 16 months), a new 2010 36' RV (I put $2,500 down), and now a 2nd home (conventional, 10% down, 15 yrs @ 3.5%, and they DON'T sell the mortgage to some other servicing company!).

I should add that this was with 3 outstanding (but old and disputed) collections showing.
Also, to be a little more clear, I have a good paying job, have been there for over 6 yrs, in the same field for over 18 yrs, not missed a single payment (or even been late) in 6 yrs, paid off my last 4 vehicles early and have a debt to income ratio of about 31%.

My point is this:

There is more to it than just your credit score.
Debt to income ratio is crucial.
Steady employment is crucial. (especially in the same field)
Several years of proven payment history is crucial. (3 or more years)
Quit going to banks. Go to Credit Unions!!! They tend to be more willing to lend and have better rates, but shorter terms and focus on DTI ratios.

YMMV, but I am not having any issues with finding loans. The cost of living, fuel, food, on the other hand... ugh! (oh, and I pay for at least 4 - 5 other people's living expenses).
 

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Discussion Starter · #11 ·
Banks will lend to anyone that qualifies. We saw what happened when they lent to a bunch of idiots. If you want a home mortgage today you must have 20% down, a good wage earning track record, and not be carrying a lot of other debt. That disqualifies a lot of people, as well it should.

This is how it was 40 years ago, and we never should have gotten away from it. We did and it was a disaster, because a lot of money was lent to people who had no possible means to pay it back. This isn't a Moon shot to figure out. It is just that people today don't like it because they can no longer be financially reckless, and buy everything they see with money they do not have.

You're going to start hearing a word in the lending industry you haven't heard in a while. It's called collateral. People today have little to nothing to make them anywhere near the term solvent, yet they expect banks to lend them money as if they were validating a parking ticket. It doesn't work that way, and never has. All the banks have done is gone back to solid lending principals. They never should have gotten away from it in the first place. Now, they damn well know it. The problem is it was like closing the barn door after the last horse leaves. Bill T.
They went from going too loose to too tight.

A solid job is good enough as collateral.

If they want solid assets as collateral, that rules out 90% of the marketplace.

They just need the market to recover enough where they are willing to own the underlying property if the mortgage defaults.
 

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Ah, so the housing collapse and lower lending standards were just an accident. Now the banks are back to solid lending standards(whatever that means in a FRB system) and things will be great again eh?
What point are you trying to make? As I said, this isn't that difficult to figure out. The housing mess was based on the bigger idiot theory. In lending markets there will always be a certain percentage of people who will try to over borrow. They are normally held in checks by the banks and lending institutions who simply will not loan them the money.

In the case of the housing boondoggle, the banks became the "bigger idiots" in the equation because they were sucked into the belief that the market was never going to end. As a result they were loaning money to most any clown who walked in the door, "pre qualifying" them for ridiculous sums they could never possibly pay back. They were betting on future equity that never materialized due to the fact the market collapsed because there was no actual wealth in it. Much like the dot com craze.

Also, to add insult to injury, Fannie and Freddie were insuring loans there was no possible way they could make good on. In addition you had the government pushing these banks to loan money to worthless minorities, who normally would have never qualified because of this total nonsense that, "Every American has a right to own a home!"

Add it up and it equals total collapse of what once was one of the most stable investments in the country, real estate. Now these banks and institutions that have been badly burned in all of this are going back to principals they never should have disregarded in the first place. No, it isn't going to insure that "things will be great again". But what it will do is prevent a repeat performance in the future.

This will take years to reverse because it will take actual wealth to get the market going again, not the borrowed wealth that over inflated the real estate market to begin with, causing it to crash. It takes time to create actual wealth because it has to be earned and saved, not gotten by simply strolling into a bank and signing on the dotted line. Bill T.
 

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Discussion Starter · #13 ·
What point are you trying to make? As I said, this isn't that difficult to figure out. The housing mess was based on the bigger idiot theory. In lending markets there will always be a certain percentage of people who will try to over borrow. They are normally held in checks by the banks and lending institutions who simply will not loan them the money.

In the case of the housing boondoggle, the banks became the "bigger idiots" in the equation because they were sucked into the belief that the market was never going to end. As a result they were loaning money to most any clown who walked in the door, "pre qualifying" them for ridiculous sums they could never possibly pay back. They were betting on future equity that never materialized due to the fact the market collapsed because there was no actual wealth in it. Much like the dot com craze.

Also, to add insult to injury, Fannie and Freddie were insuring loans there was no possible way they could make good on. In addition you had the government pushing these banks to loan money to worthless minorities, who normally would have never qualified because of this total nonsense that, "Every American has a right to own a home!"

Add it up and it equals total collapse of what once was one of the most stable investments in the country, real estate. Now these banks and institutions that have been badly burned in all of this are going back to principals they never should have disregarded in the first place. No, it isn't going to insure that "things will be great again". But what it will do is prevent a repeat performance in the future.

This will take years to reverse because it will take actual wealth to get the market going again, not the borrowed wealth that over inflated the real estate market to begin with, causing it to crash. It takes time to create actual wealth because it has to be earned and saved, not gotten by simply strolling into a bank and signing on the dotted line. Bill T.
Every idiot does have a right to own a home. They just have to pay for it themselves. If Fannie and Freddie wants to lend to them, they should only do so if they feel confident that they could sell it if the underlying mortgage defaults.
 

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A solid job is good enough as collateral.
No it is not. A job can be lost in a moment, and the chances of replacing it are poor at best, terrible in fact in today's economy. An individual has to have some of their own wealth in the investment, not borrow 100% of it. That is what caused this mess in the first place. Prices plummeted faster than people could sell forcing banks to take 100% of the loss because the "home owner" simply tossed the keys on the desk and walked away.

When the home owner is vested at least 20% in the actual purchase price it gives the lender a cushion to operate under. In short it spreads the risk. People aren't so willing to walk away from something they have worked and saved to purchase. "Easy money" created this whole thing, and going back to it, especially in a real estate market that is not through tanking yet in many areas would be just plain stupid. Bill T.
 

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Discussion Starter · #15 ·
No it is not. A job can be lost in a moment, and the chances of replacing it are poor at best, terrible in fact in today's economy. An individual has to have some of their own wealth in the investment, not borrow 100% of it. That is what caused this mess in the first place. Prices plummeted faster than people could sell forcing banks to take 100% of the loss because the "home owner" simply tossed the keys on the desk and walked away.

When the home owner is vested at least 20% in the actual purchase price it gives the lender a cushion to operate under. In short it spreads the risk. People aren't so willing to walk away from something they have worked and saved to purchase. "Easy money" created this whole thing, and going back to it, especially in a real estate market that is not through tanking yet in many areas would be just plain stupid. Bill T.
Ok, so have a good paying job and the 20% down is good enough, because then, the bank can sell the property for at least 20% off and still make a profit.

Wasn't that the criteria 20 years ago?
 

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Banks will lend to anyone that qualifies. We saw what happened when they lent to a bunch of idiots. If you want a home mortgage today you must have 20% down, a good wage earning track record, and not be carrying a lot of other debt. That disqualifies a lot of people, as well it should.
Can I get an "Amen" brotha!

"Amen!"

This is the only way I buy my house. I put 20% down, always.

This is how it was 40 years ago, and we never should have gotten away from it. We did and it was a disaster, because a lot of money was lent to people who had no possible means to pay it back. This isn't a Moon shot to figure out. It is just that people today don't like it because they can no longer be financially reckless, and buy everything they see with money they do not have.
 

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My point was, and what everyone here seems to be missing in the whole damn thing was this....

The banks had to make those loans in order not to go brankrupt sooner then they are.

Our system is built on ever increasing loans, that is how the system works, when they could find no one to borrow more money, they lowered lending standards.

you HAVE to have more loans each year to service the interest on loans outstanding.
 

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Discussion Starter · #18 ·
My point was, and what everyone here seems to be missing in the whole damn thing was this....

The banks had to make those loans in order not to go brankrupt sooner then they are.

Our system is built on ever increasing loans, that is how the system works, when they could find no one to borrow more money, they lowered lending standards.

you HAVE to have more loans each year to service the interest on loans outstanding.
That's only true if the banks owe money to someone else.

The banks are in trouble because of them selling naked CDSs, that got called. And guess what none of the banks had any "C"s to cover their "S"s.
 

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That's only true if the banks owe money to someone else.

The banks are in trouble because of them selling naked CDSs, that got called. And guess what none of the banks had any "C"s to cover their "S"s.

No thats 100% true due to the fact that banks dont create interest along with the loans they write, the interest people pay back the bank comes from other peoples principal. That is why defaults are written into the system, because there is not enough money to pay back all the loans and interest.

As more people pay off their loans, money is taken out of the system(destroyed), so in order for people to keep paying, they need more money coming into the system. Hence the lower lending standards.

Everyone should really understand how our system works, money is created with interest ATTACHED but never is that interest CREATED.
 

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For the last 2 months I'v been getting non-stop (2-3daily) preapproved credit card letters... All the cards I cut up last year are begging to have me back.
I thought ya right.. junk mail, well I called Discover and bam..got a 0% for 12 months with a high limit..hehe,cut it up too :)
 
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