[UCGal]

[quote=davelj]

Probably true. Although even to this day, every banker is *supposed* to be underwriting to the “Three C’s of Credit”: Character, Capital and Capacity. (So, this idea of “character” in the lending function isn’t something I’m making up – just to be clear – it’s in every lender’s training manual, to be ignored at his or her own peril.)

Unfortunately, during the ’00s, the three C’s morphed into: Collateral Creates Character. That turned out to be incorrect.[/quote]

Dave
As I stated earlier – I don’t see how my character was looked at anywhere in the process of obtaining my mortgage, or refinancing. Both were handled through mortgage brokers. I did not provide personal references, proof I attend church (or not) whether I jaywalk or litter. Character never entered into it. In the refi I never had a face to face interaction with the broker and the underwriter was in another state and I had ZERO contact. They looked at my credit worthiness, capacity (income), my savings, and the LTV. Not my character.

The 3-C’s you’ve mentioned are usually referred to as CREDIT, Capacity, and Collateral. The big change in the 00’s was that someone with good credit did not have to prove the Capacity to qualify for an Alt-A.

Are you equating good credit scores with “character”?

And I agree with edna_mode on the “character” issue being used, historically, to redline entire neighborhoods that were non-white. My husband owned a home in a redlined neighborhood. They’ve changed how they redline – they ask questions like “what kind of roof does it have”… his neighborhood was mostly flat roofed row houses. His roof happened to not fall in that category and he could hear the surpise when he said he had a shingled/sloped roof. Then they asked about offstreet parking (not a lot in his neighborhood) – he happened to have a garage… again, he could sense the frustration when he said that. This happened with both the mortgage company and the insurance company. Both were looking for trumped up excuses not to do business in his neighborhood. (Frankford neighborhood of Philadelphia for anyone who cares.) Redlining still happens but they have to be sneakier about it. It was easier for the companies when they could just cite “character” if the applicant had dark skin or was in a less preferred area.

I agree with your personal morality that if you commit to a debt, you should honor it. But I don’t think banks ever considered my personal morality with any of the mortgages I’ve had. (I’m on my 4th.)

[UCGal]

[quote=davelj]

Probably true. Although even to this day, every banker is *supposed* to be underwriting to the “Three C’s of Credit”: Character, Capital and Capacity. (So, this idea of “character” in the lending function isn’t something I’m making up – just to be clear – it’s in every lender’s training manual, to be ignored at his or her own peril.)

Unfortunately, during the ’00s, the three C’s morphed into: Collateral Creates Character. That turned out to be incorrect.[/quote]

Dave
As I stated earlier – I don’t see how my character was looked at anywhere in the process of obtaining my mortgage, or refinancing. Both were handled through mortgage brokers. I did not provide personal references, proof I attend church (or not) whether I jaywalk or litter. Character never entered into it. In the refi I never had a face to face interaction with the broker and the underwriter was in another state and I had ZERO contact. They looked at my credit worthiness, capacity (income), my savings, and the LTV. Not my character.

The 3-C’s you’ve mentioned are usually referred to as CREDIT, Capacity, and Collateral. The big change in the 00’s was that someone with good credit did not have to prove the Capacity to qualify for an Alt-A.

Are you equating good credit scores with “character”?

And I agree with edna_mode on the “character” issue being used, historically, to redline entire neighborhoods that were non-white. My husband owned a home in a redlined neighborhood. They’ve changed how they redline – they ask questions like “what kind of roof does it have”… his neighborhood was mostly flat roofed row houses. His roof happened to not fall in that category and he could hear the surpise when he said he had a shingled/sloped roof. Then they asked about offstreet parking (not a lot in his neighborhood) – he happened to have a garage… again, he could sense the frustration when he said that. This happened with both the mortgage company and the insurance company. Both were looking for trumped up excuses not to do business in his neighborhood. (Frankford neighborhood of Philadelphia for anyone who cares.) Redlining still happens but they have to be sneakier about it. It was easier for the companies when they could just cite “character” if the applicant had dark skin or was in a less preferred area.

I agree with your personal morality that if you commit to a debt, you should honor it. But I don’t think banks ever considered my personal morality with any of the mortgages I’ve had. (I’m on my 4th.)

[UCGal]

[quote=davelj]

Probably true. Although even to this day, every banker is *supposed* to be underwriting to the “Three C’s of Credit”: Character, Capital and Capacity. (So, this idea of “character” in the lending function isn’t something I’m making up – just to be clear – it’s in every lender’s training manual, to be ignored at his or her own peril.)

Unfortunately, during the ’00s, the three C’s morphed into: Collateral Creates Character. That turned out to be incorrect.[/quote]

Dave
As I stated earlier – I don’t see how my character was looked at anywhere in the process of obtaining my mortgage, or refinancing. Both were handled through mortgage brokers. I did not provide personal references, proof I attend church (or not) whether I jaywalk or litter. Character never entered into it. In the refi I never had a face to face interaction with the broker and the underwriter was in another state and I had ZERO contact. They looked at my credit worthiness, capacity (income), my savings, and the LTV. Not my character.

The 3-C’s you’ve mentioned are usually referred to as CREDIT, Capacity, and Collateral. The big change in the 00’s was that someone with good credit did not have to prove the Capacity to qualify for an Alt-A.

Are you equating good credit scores with “character”?

And I agree with edna_mode on the “character” issue being used, historically, to redline entire neighborhoods that were non-white. My husband owned a home in a redlined neighborhood. They’ve changed how they redline – they ask questions like “what kind of roof does it have”… his neighborhood was mostly flat roofed row houses. His roof happened to not fall in that category and he could hear the surpise when he said he had a shingled/sloped roof. Then they asked about offstreet parking (not a lot in his neighborhood) – he happened to have a garage… again, he could sense the frustration when he said that. This happened with both the mortgage company and the insurance company. Both were looking for trumped up excuses not to do business in his neighborhood. (Frankford neighborhood of Philadelphia for anyone who cares.) Redlining still happens but they have to be sneakier about it. It was easier for the companies when they could just cite “character” if the applicant had dark skin or was in a less preferred area.

I agree with your personal morality that if you commit to a debt, you should honor it. But I don’t think banks ever considered my personal morality with any of the mortgages I’ve had. (I’m on my 4th.)

[UCGal]

[quote=davelj][quote=zk]
First of all, most loans are paid back regardless of any moral component. They’re paid back because the consequences of not paying outweigh the consequences of paying. I’d say precious few loans are made where the lender is counting on the moral standards of the borrower.
[/quote]

I agree with your first and second sentences above. Your last sentence is clearly written from the perspective of someone who has never sat on the loan committee of a bank. Yes, you require collateral and cashflow as the fundamental basis for the loan. But if you think that the “character” of the borrower (as explained in court by JP Morgan back in the 1930s) isn’t a big issue, you’re mistaken. (Although, admittedly, the character issue is much more important at the community bank level than at the national bank level.)

[quote=zk]
What changed over the last 7 years
wasn’t moral standards, it was lending standards. If you have adequate lending standards, there will be plenty of loans made and enough of them will be paid back that we won’t end up in a mess like the one we’re in.[/quote]

I will agree with you that it was lending standards that changed MORE than moral standards (among the pool of total borrowers). Lending standards really went into the shitter and I agree that that is indeed the crux of the problem. But it’s pretty clear to me that moral standards have changed too. Although, one could argue that the lax lending standards allowed a large group of folks into the borrowing pool that never should have been there in the first place and gave them every incentive to act in an immoral manner.

Having said all that, I’m clearly biased about this “character” issue because I deal with it all the time. Bank of America, et al, however, probably don’t give it much thought as a result of how their business is run.[/quote]

Character might have played a part in olden days… but when I refi’d last year I never met my mortgage broker in person (it was all on the phone, fax, email.) The underwriter was a nameless person in another state who looked at me from a numbers perspective – I had the income/capacity and good credit and the LTV was less than 50%. Character NEVER came into it – how could it when the only person I met, face to face, during the process, was a notary that came out for doc signing.

How can you tell character? FICO score is about credit worthiness, not character. LTV is about debt levels, not character. Income is about capacity not character. No one asked me my views on paying off debt.

Once the mortgages started being sold off to agencies to be securitized, character stopped being a factor. It was about arbitrary mathematical criteria. And with banks (or brokers) making a percentage of every loan made – but little risk if the loan goes south a few years later – character became a total non issue. Character might matter if the banks actually HELD the paper – but that doesn’t happen anymore.

[UCGal]

[quote=davelj][quote=zk]
First of all, most loans are paid back regardless of any moral component. They’re paid back because the consequences of not paying outweigh the consequences of paying. I’d say precious few loans are made where the lender is counting on the moral standards of the borrower.
[/quote]

I agree with your first and second sentences above. Your last sentence is clearly written from the perspective of someone who has never sat on the loan committee of a bank. Yes, you require collateral and cashflow as the fundamental basis for the loan. But if you think that the “character” of the borrower (as explained in court by JP Morgan back in the 1930s) isn’t a big issue, you’re mistaken. (Although, admittedly, the character issue is much more important at the community bank level than at the national bank level.)

[quote=zk]
What changed over the last 7 years
wasn’t moral standards, it was lending standards. If you have adequate lending standards, there will be plenty of loans made and enough of them will be paid back that we won’t end up in a mess like the one we’re in.[/quote]

I will agree with you that it was lending standards that changed MORE than moral standards (among the pool of total borrowers). Lending standards really went into the shitter and I agree that that is indeed the crux of the problem. But it’s pretty clear to me that moral standards have changed too. Although, one could argue that the lax lending standards allowed a large group of folks into the borrowing pool that never should have been there in the first place and gave them every incentive to act in an immoral manner.

Having said all that, I’m clearly biased about this “character” issue because I deal with it all the time. Bank of America, et al, however, probably don’t give it much thought as a result of how their business is run.[/quote]

Character might have played a part in olden days… but when I refi’d last year I never met my mortgage broker in person (it was all on the phone, fax, email.) The underwriter was a nameless person in another state who looked at me from a numbers perspective – I had the income/capacity and good credit and the LTV was less than 50%. Character NEVER came into it – how could it when the only person I met, face to face, during the process, was a notary that came out for doc signing.

How can you tell character? FICO score is about credit worthiness, not character. LTV is about debt levels, not character. Income is about capacity not character. No one asked me my views on paying off debt.

Once the mortgages started being sold off to agencies to be securitized, character stopped being a factor. It was about arbitrary mathematical criteria. And with banks (or brokers) making a percentage of every loan made – but little risk if the loan goes south a few years later – character became a total non issue. Character might matter if the banks actually HELD the paper – but that doesn’t happen anymore.

[UCGal]

[quote=davelj][quote=zk]
First of all, most loans are paid back regardless of any moral component. They’re paid back because the consequences of not paying outweigh the consequences of paying. I’d say precious few loans are made where the lender is counting on the moral standards of the borrower.
[/quote]

I agree with your first and second sentences above. Your last sentence is clearly written from the perspective of someone who has never sat on the loan committee of a bank. Yes, you require collateral and cashflow as the fundamental basis for the loan. But if you think that the “character” of the borrower (as explained in court by JP Morgan back in the 1930s) isn’t a big issue, you’re mistaken. (Although, admittedly, the character issue is much more important at the community bank level than at the national bank level.)

[quote=zk]
What changed over the last 7 years
wasn’t moral standards, it was lending standards. If you have adequate lending standards, there will be plenty of loans made and enough of them will be paid back that we won’t end up in a mess like the one we’re in.[/quote]

I will agree with you that it was lending standards that changed MORE than moral standards (among the pool of total borrowers). Lending standards really went into the shitter and I agree that that is indeed the crux of the problem. But it’s pretty clear to me that moral standards have changed too. Although, one could argue that the lax lending standards allowed a large group of folks into the borrowing pool that never should have been there in the first place and gave them every incentive to act in an immoral manner.

Having said all that, I’m clearly biased about this “character” issue because I deal with it all the time. Bank of America, et al, however, probably don’t give it much thought as a result of how their business is run.[/quote]

Character might have played a part in olden days… but when I refi’d last year I never met my mortgage broker in person (it was all on the phone, fax, email.) The underwriter was a nameless person in another state who looked at me from a numbers perspective – I had the income/capacity and good credit and the LTV was less than 50%. Character NEVER came into it – how could it when the only person I met, face to face, during the process, was a notary that came out for doc signing.

How can you tell character? FICO score is about credit worthiness, not character. LTV is about debt levels, not character. Income is about capacity not character. No one asked me my views on paying off debt.

Once the mortgages started being sold off to agencies to be securitized, character stopped being a factor. It was about arbitrary mathematical criteria. And with banks (or brokers) making a percentage of every loan made – but little risk if the loan goes south a few years later – character became a total non issue. Character might matter if the banks actually HELD the paper – but that doesn’t happen anymore.

[UCGal]

[quote=davelj][quote=zk]
First of all, most loans are paid back regardless of any moral component. They’re paid back because the consequences of not paying outweigh the consequences of paying. I’d say precious few loans are made where the lender is counting on the moral standards of the borrower.
[/quote]

I agree with your first and second sentences above. Your last sentence is clearly written from the perspective of someone who has never sat on the loan committee of a bank. Yes, you require collateral and cashflow as the fundamental basis for the loan. But if you think that the “character” of the borrower (as explained in court by JP Morgan back in the 1930s) isn’t a big issue, you’re mistaken. (Although, admittedly, the character issue is much more important at the community bank level than at the national bank level.)

[quote=zk]
What changed over the last 7 years
wasn’t moral standards, it was lending standards. If you have adequate lending standards, there will be plenty of loans made and enough of them will be paid back that we won’t end up in a mess like the one we’re in.[/quote]

I will agree with you that it was lending standards that changed MORE than moral standards (among the pool of total borrowers). Lending standards really went into the shitter and I agree that that is indeed the crux of the problem. But it’s pretty clear to me that moral standards have changed too. Although, one could argue that the lax lending standards allowed a large group of folks into the borrowing pool that never should have been there in the first place and gave them every incentive to act in an immoral manner.

Having said all that, I’m clearly biased about this “character” issue because I deal with it all the time. Bank of America, et al, however, probably don’t give it much thought as a result of how their business is run.[/quote]

Character might have played a part in olden days… but when I refi’d last year I never met my mortgage broker in person (it was all on the phone, fax, email.) The underwriter was a nameless person in another state who looked at me from a numbers perspective – I had the income/capacity and good credit and the LTV was less than 50%. Character NEVER came into it – how could it when the only person I met, face to face, during the process, was a notary that came out for doc signing.

How can you tell character? FICO score is about credit worthiness, not character. LTV is about debt levels, not character. Income is about capacity not character. No one asked me my views on paying off debt.

Once the mortgages started being sold off to agencies to be securitized, character stopped being a factor. It was about arbitrary mathematical criteria. And with banks (or brokers) making a percentage of every loan made – but little risk if the loan goes south a few years later – character became a total non issue. Character might matter if the banks actually HELD the paper – but that doesn’t happen anymore.

[UCGal]

[quote=davelj][quote=zk]
First of all, most loans are paid back regardless of any moral component. They’re paid back because the consequences of not paying outweigh the consequences of paying. I’d say precious few loans are made where the lender is counting on the moral standards of the borrower.
[/quote]

I agree with your first and second sentences above. Your last sentence is clearly written from the perspective of someone who has never sat on the loan committee of a bank. Yes, you require collateral and cashflow as the fundamental basis for the loan. But if you think that the “character” of the borrower (as explained in court by JP Morgan back in the 1930s) isn’t a big issue, you’re mistaken. (Although, admittedly, the character issue is much more important at the community bank level than at the national bank level.)

[quote=zk]
What changed over the last 7 years
wasn’t moral standards, it was lending standards. If you have adequate lending standards, there will be plenty of loans made and enough of them will be paid back that we won’t end up in a mess like the one we’re in.[/quote]

I will agree with you that it was lending standards that changed MORE than moral standards (among the pool of total borrowers). Lending standards really went into the shitter and I agree that that is indeed the crux of the problem. But it’s pretty clear to me that moral standards have changed too. Although, one could argue that the lax lending standards allowed a large group of folks into the borrowing pool that never should have been there in the first place and gave them every incentive to act in an immoral manner.

Having said all that, I’m clearly biased about this “character” issue because I deal with it all the time. Bank of America, et al, however, probably don’t give it much thought as a result of how their business is run.[/quote]

Character might have played a part in olden days… but when I refi’d last year I never met my mortgage broker in person (it was all on the phone, fax, email.) The underwriter was a nameless person in another state who looked at me from a numbers perspective – I had the income/capacity and good credit and the LTV was less than 50%. Character NEVER came into it – how could it when the only person I met, face to face, during the process, was a notary that came out for doc signing.

How can you tell character? FICO score is about credit worthiness, not character. LTV is about debt levels, not character. Income is about capacity not character. No one asked me my views on paying off debt.

Once the mortgages started being sold off to agencies to be securitized, character stopped being a factor. It was about arbitrary mathematical criteria. And with banks (or brokers) making a percentage of every loan made – but little risk if the loan goes south a few years later – character became a total non issue. Character might matter if the banks actually HELD the paper – but that doesn’t happen anymore.

[UCGal]

Update:
No recissions ever showed up.
Today the trustee sale data showed up again on priorityposting.com. Date is 15 days from today – so it was missing because of the window. (Which is why I checked today… to see if that was the reason.)

Interesting observation… it appears that foreclosureradars free search does NOT show properties that are in that priorityposting ‘out of 15 day window’ state. It had appeared as an auction property, previously, on FR. When it was no longer visible through Priority, it disappeared from FR as well. As of this morning, it hasn’t shown up on FR again – but I suspect that’s a data lag – it will show up in the next few days. That seems to be a hole in FR’s data if it only shows homes that are listed on Priority that are within the 15 day window.

I fully expect this trustee sale to be postponed again – it’s got a pending short sale going. (Although I don’t think the short sale will go through since there are tax liens and absentee judgments).

[UCGal]

Update:
No recissions ever showed up.
Today the trustee sale data showed up again on priorityposting.com. Date is 15 days from today – so it was missing because of the window. (Which is why I checked today… to see if that was the reason.)

Interesting observation… it appears that foreclosureradars free search does NOT show properties that are in that priorityposting ‘out of 15 day window’ state. It had appeared as an auction property, previously, on FR. When it was no longer visible through Priority, it disappeared from FR as well. As of this morning, it hasn’t shown up on FR again – but I suspect that’s a data lag – it will show up in the next few days. That seems to be a hole in FR’s data if it only shows homes that are listed on Priority that are within the 15 day window.

I fully expect this trustee sale to be postponed again – it’s got a pending short sale going. (Although I don’t think the short sale will go through since there are tax liens and absentee judgments).

[UCGal]

Update:
No recissions ever showed up.
Today the trustee sale data showed up again on priorityposting.com. Date is 15 days from today – so it was missing because of the window. (Which is why I checked today… to see if that was the reason.)

Interesting observation… it appears that foreclosureradars free search does NOT show properties that are in that priorityposting ‘out of 15 day window’ state. It had appeared as an auction property, previously, on FR. When it was no longer visible through Priority, it disappeared from FR as well. As of this morning, it hasn’t shown up on FR again – but I suspect that’s a data lag – it will show up in the next few days. That seems to be a hole in FR’s data if it only shows homes that are listed on Priority that are within the 15 day window.

I fully expect this trustee sale to be postponed again – it’s got a pending short sale going. (Although I don’t think the short sale will go through since there are tax liens and absentee judgments).

[UCGal]

Update:
No recissions ever showed up.
Today the trustee sale data showed up again on priorityposting.com. Date is 15 days from today – so it was missing because of the window. (Which is why I checked today… to see if that was the reason.)

Interesting observation… it appears that foreclosureradars free search does NOT show properties that are in that priorityposting ‘out of 15 day window’ state. It had appeared as an auction property, previously, on FR. When it was no longer visible through Priority, it disappeared from FR as well. As of this morning, it hasn’t shown up on FR again – but I suspect that’s a data lag – it will show up in the next few days. That seems to be a hole in FR’s data if it only shows homes that are listed on Priority that are within the 15 day window.

I fully expect this trustee sale to be postponed again – it’s got a pending short sale going. (Although I don’t think the short sale will go through since there are tax liens and absentee judgments).

[UCGal]

Update:
No recissions ever showed up.
Today the trustee sale data showed up again on priorityposting.com. Date is 15 days from today – so it was missing because of the window. (Which is why I checked today… to see if that was the reason.)

Interesting observation… it appears that foreclosureradars free search does NOT show properties that are in that priorityposting ‘out of 15 day window’ state. It had appeared as an auction property, previously, on FR. When it was no longer visible through Priority, it disappeared from FR as well. As of this morning, it hasn’t shown up on FR again – but I suspect that’s a data lag – it will show up in the next few days. That seems to be a hole in FR’s data if it only shows homes that are listed on Priority that are within the 15 day window.

I fully expect this trustee sale to be postponed again – it’s got a pending short sale going. (Although I don’t think the short sale will go through since there are tax liens and absentee judgments).

[UCGal]

92026 – family of 4 (2 minor kids), dad lost job. Wife still employed. House sold short for $300k less than they paid. (aprox 800k to 500k) Lost their $50k downpayment. Probably got some free rent along the way. Now renting. Both parents college educated and have/had power careers. Kids go to private schools. Decision was based on degree they were underwater.

[UCGal]

92026 – family of 4 (2 minor kids), dad lost job. Wife still employed. House sold short for $300k less than they paid. (aprox 800k to 500k) Lost their $50k downpayment. Probably got some free rent along the way. Now renting. Both parents college educated and have/had power careers. Kids go to private schools. Decision was based on degree they were underwater.

[Author]

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