NationStates Jolt Archive

Do you know what your credit score is? Do you care? How often do you check your credit score?

Well a credit score is supposed to be important if you are applying for a loan because in theory the higher your credit score the lower your interest rate.

Ok, so why bring this up? Mrs. C and I are applying for a loan to buy a manufactured home. My credit broker came up with two different loans, one was a conventional loan and the other is a government garanteed loan. For several reasons we opted for the conventional loan. We have great credit, low debt, good income, and enough land equity and cash for a 20% down payment.

I got an e-mail from my mortgage broker a couple of days ago and because of the current mortgage crisis NO CONVENTIONAL loans are available for a reasonable interest rate.

So, now it's back to square one and it looks like we will have to go for the government backed loan, which will end up costing us more in closing costs, but what the hell can you do.

Predatory lending practices and people who want more house than they can afford have caused this problem which means I have to pay more to get a loan I should have to pay less for. It also means that people with marginal credit scores are not going to be able to get homes and the American tax payer is going to have to shell out money to bail out the mortgage companies and irresponsable people.

So, has the current lending crisis hit you yet? Do you expect to pay more for a mortgage, car loan, credit card, or student loan because of it.

Even in the height of, what did they call it? Sub-prime lending? no institution in their right mind would have lent me a buck fifty to catch a bus the hell out of their building, much less a home loan or credit card or any like minded nonsense.

And, since I'm freelance and live a feast and famine lifestyle, credit just isn't a good idea anyway.

So all it's doing to me is making the things around me more expensive. Yay. But it hasn't made getting credit harder because it couldn't possibly get any harder.

So all it's doing to me is making the things around me more expensive. Yay. But it hasn't made getting credit harder because it couldn't possibly get any harder.

So, you vote #1?

So, you vote #1?

There's a difference between 'no credit' and 'credit so bad they might have to adjust the scale so the numbers can go even lower.'

Do you expect to pay more for a mortgage, car loan, credit card, or student loan because of it.

That. I've already got a ton of student loans, and I've got 2 more semesters to go before I'm even done with my undergrad, much less whatever other schooling I'll do.

There's a difference between 'no credit' and 'credit so bad they might have to adjust the scale so the numbers can go even lower.'
This smacks painfully familiar.

There's a difference between 'no credit' and 'credit so bad they might have to adjust the scale so the numbers can go even lower.'

ROFLMAO :p

So, has the current lending crisis hit you yet? Do you expect to pay more for a mortgage, car loan, credit card, or student loan because of it.

most of your student loans are goverment subsidized/backed so they will be largely unaffected. the alternative student loans could be fucked. to be honest interest rates need to be raised. which will raise interest rates people are paying on their loans if it is adjustable. too bad I don't have any.

It won't, because my only loan (car) is paid early every month and my credit card bill is paid in full at the end of the month.

Yay living within your means.

I have a strong aversion to loans. I prefer to save money, storing them in tradeable and profitable stocks, and pay in cash or bank transfer whenever possible. If I can't pay in cash for something, that means I can't afford it. Only in rare circumstances do I use credit, and then pay up as soon as possible.


By using credit, you're wasting money. You pay a considerable extra for getting absolutely the same, but a bit sooner. Just spend two years without big purchases, saving money, and you'll never need to use credit. What's more, the investment return on this money will provide you with a stable bonus to income.
Of course, it doesn't include subsidized loans.

I have very little credit, and virtually no need for any for quite some time. The only shame, being, that this didn't come a few years later, especially the bursting of the housing bubble, because in about three or four years, I will be looking for my first house, and there would be so many, many bargains out there had this held off a little longer.

Alas, the market will likely have rebounded by then, leaving me having to pay full price, once again. *shrugs*

I can only assume my credit is good (or at least not bad). My credit card company just doubled my limit last month, but I would never spend that much and I pay the card off in full every month.

I don't have any debt (unless we're counting the stuff I put on the card and pay off at the end of the month as debt) and I'm managing to put away what's usually a decent amount of my paycheque each month. I also don't plan on going into debt anytime soon. I figure I won't get a house until I have a mostly permanent sort of job (grad student isn't a permanent job) which won't be until after I'm done my PhD and a (couple of) postdoc(s) at which point I'll be earning much more than I do now so I should be able to afford it (and any credit crisis should be over).

Also, I'm not sure if the credit crisis is just in the US...

I don't really borrow money, but I am applying to work in the financial industry. So one way or another, it will affect my work.

Which I don't mind, because to me it's just plain exciting.

It affects me just fine. The more stupid decisions people make with their finances the more work I have and the more money I make.

Speaking of, you shouldn't borrow money on a manufactered home, it doesn't even count as real estate.

People have borrowed too much. Now its the time that they blame the government for increased expences. Anyone who borrows should work out if they can repay the money at a higher interest rate level. Look at the worst realistic case scenarion, not the current or best

Also, I'm not sure if the credit crisis is just in the US...
It's not, the financial industry is the most globalised in the world. Northern Rock in the UK and two (state-owned) Landesbanken in Germany went down along with Bear Stearns for example, and here in Oz two banks are merging to deal with the funding costs. Countless smaller lenders here are also in all sorts of trouble.

The reason is that banks can get some of their money from deposits people have with them. But these days it was often cheaper and quicker not to bother with all the regulations, branches and other investment that is required to be able to offer people a place to put money, so they grabbed their money from the wholesale market or from securitising mortgages. Both have been hit, and the effect is the same on financial institutions all over the world.

My credit score is near perfect and I don't expect that to change. I have never missed a payment on a credit card or anything else. Why? Because I'm an adult and I fulfill any and all obligations I may have.

I do technically have debt in the form of student loans...however, my parents are paying them off, so in reality, I basically have no debt.

It won't. I took a fixed rate when everybody said I was dumb. Gut instinct said it was a bad idea.

However, I hold the industry more to blame then this uncountable mass of "irresponsible" people.

The industry has the tools to evaluate the value and the prospect of the loans.

Even when I wanted a fixed rate; I got heavy sales pitching for the variable.

Even when I basically said "ok blank blank what part of fixed don't you blank understand?;" they still said I had to take a second line of credit on a variable rate.

If I hadn't of refinanced to eliminate that second line; it would have killed me.

So the banking and loan industry is hardly the victim as suggested by many cons.....

Do you know what your credit score is? Do you care? How often do you check your credit score?

The interests I get on my bank account will get even lower (currently it's 0,50%/year), but I don't give a shit. I regularily transfer money on short- and mid-term ultra-safe investments, like the bonds issued by the italian post service (AAA), with yearly interests in the range of 4% - 5%. Not much... just to keep my buying power safe from inflation.

As for loans, I don't foresee asking loans.
As for credit cards, I am pondering about getting one (I use debt cards so I cannot ever get in the negative numbers). I would just use it in the unlikely case I'd have to rent a car - anyway the credit crisis won't hit me at all.

I might add that if one is so reckless to ask for a loan (yes, credit cards ARE a sort of loan) without being 100% sure of repaying it, he deserves to get punished. Also, variable-rate mortgages are a speculation... so, if the rates go up, well, you knew the risks you were taking.

My credit score is perfect - my bank account never went below the "alert level" I've decided, that is 1000 €.

A few people who are also suffering quite badly: http://www.bloomberg.com/apps/news?pid=20601109&sid=ayIvmRwa4t6E&refer=home

``We get lots of CEOs of companies, traders, high-end business guys,'' says Managing Director Brendan Quinn. ``They want treatment, but they want it to be discreet.''

Financial services firms in the U.K. are trying to break the stigma of mental illness as the number of people seeking help increases. JPMorgan Cazenove Ltd. and Herbert Smith LLP sponsored a conference yesterday where employers were urged to do more to help workers with psychological problems and recognize they can still be productive.

Mental health is a growing concern as the credit crunch adds to stress in the City of London, the U.K. capital's financial district. The number of men in the City who sought help for depression and stress rose 47 percent from a year earlier in the past three months, according to British United Provident Association Ltd., the U.K.'s largest private health insurer.

Poor rich bankers :(

Well, the credit crises have impacted my family in a way that you wouldn't expect. We have in fact lost money; we had some money in a finance company, and as a result of the credit crises, many of the finance companies in New Zealand have gone bankrupt, with a likely recovery of only small amounts in the dollar.

Basically, we have lost money, but the credit crises have not effected us. What has effected us more has been the increase in the price of commodities.

Poor rich bankers :(
It's quite serious actually. The numbers of promising (and I mean it, it's the hardest work in the world to get into) young people who have killed themselves in London's financial industry is ridiculous. I for one am seriously wondering whether I'd ever want to work there. Singapore, HK, Tokyo, NY okay...but London I'm not sure about.

My only debt is my stdent loan and (interest-free) overdraft.

So I'm okay.

It won't, because my only loan (car) is paid early every month and my credit card bill is paid in full at the end of the month.

Yay living within your means.

Likewise.

It's amazing what a bit of responsibility will get ya.

i don't use creadit. i keep getting offers, that if you read the fine print the rates are generally quite usurous, 23.5%, 25%, a fee to join and use, and so on.

the whole financial service sector, other then streight forward banking, (and how much of even that any more even is?), when i was growing was called a con game, and people used to go to jail for it.

credit = indenture. thanks but no thanks.

i'd rather live without whatever it takes living without to put an end to the tyranny of the dominance of aggressiveness.

=^^=
.../\...

Likewise.

It's amazing what a bit of responsibility will get ya.
Some people would say if you were responsible you wouldn't have financed something like a car or whatever stupid shit you bought on credit.

i don't use creadit. i keep getting offers, that if you read the fine print the rates are generally quite usurous, 23.5%, 25%, a fee to join and use, and so on.

the whole financial service sector, other then streight forward banking, (and how much of even that any more even is?), when i was growing was called a con game, and people used to go to jail for it.

credit = indenture. thanks but no thanks.

i'd rather live without whatever it takes living without to put an end to the tyranny of the dominance of aggressiveness.

=^^=
.../\...
You know, there is a way to get off the credit offer lists. ;)

I have no credit and do not plan to apply for credit for anything for several years. I try to live on less than I make, so I pay cash for things. If I can't afford it, I don't buy it. That said, the credit crisis will affect me because everything the government is doing to 'solve' the problem will negatively affect me by causing inflation, which reduces the value of my money. Government meddling caused the current credit crisis, and will not solve the underling economic issues.

where is the it wont affect me because as a veteran i get to borrow money for a home at 2%. or less. (1.25% with 10% down)

A few people who are also suffering quite badly: http://www.bloomberg.com/apps/news?pid=20601109&sid=ayIvmRwa4t6E&refer=home

Wow. It must be very stressful not knowing how to spend the money they have.


To think I thought people looking a foreclosure, decreased lifestyle, etc. had it worst.

Shame on me for not think the rich bankers were people too.

[/sarcasm]

I hope it won't. I owe nothing on my home, except taxes, which are low. I have one credit card which, as soon as I get it paid off (in about a million years), I intend cancelling. As far as I'm concerned, now, more than ever is not the time to take on debt.

I wonder what would happen to lending institutions if everyone suddenly decided to do business on a cash basis?

Do you know what your credit score is? Do you care? How often do you check your credit score?

Well a credit score is supposed to be important if you are applying for a loan because in theory the higher your credit score the lower your interest rate.

Ok, so why bring this up? Mrs. C and I are applying for a loan to buy a manufactured home. My credit broker came up with two different loans, one was a conventional loan and the other is a government garanteed loan. For several reasons we opted for the conventional loan. We have great credit, low debt, good income, and enough land equity and cash for a 20% down payment.

I got an e-mail from my mortgage broker a couple of days ago and because of the current mortgage crisis NO CONVENTIONAL loans are available for a reasonable interest rate.
....
So, has the current lending crisis hit you yet? Do you expect to pay more for a mortgage, car loan, credit card, or student loan because of it.

I'm pretty much in the same boat except I don't have the option of a government-guaranteed loan. My choices so far are a conventional loan at a ridiculous rate, or continuing to rent. My credit score is superb and I have a ton saved up for a down payment, but nobody will lend me the balance. I continue to shop, and hope!

Wow. It must be very stressful not knowing how to spend the money they have.


To think I thought people looking a foreclosure, decreased lifestyle, etc. had it worst.

Shame on me for not think the rich bankers were people too.

[/sarcasm]

Actually, the people who are losing their homes don't have it worst. I can think of many people who are suffering far more. People in Darfur for instance.

Fortunately I have the ability to sympathise with everyone who suffers misfortune, not just the people at the very bottom.

I'm pretty much in the same boat except I don't have the option of a government-guaranteed loan. My choices so far are a conventional loan at a ridiculous rate, or continuing to rent. My credit score is superb and I have a ton saved up for a down payment, but nobody will lend me the balance. I continue to shop, and hope!

easy way to get goverment backed loan is join the military and server your country. then laff it up with a 2% interest rate on your home and no down payment requirement.

easy way to get goverment backed loan is join the military and server your country. then laff it up with a 2% interest rate on your home and no down payment requirement.

Yes, I tried that. First they wouldn't let me in because I was crazy. Now they won't let me in because I'm pregnant. Discrimination, sez I!

Yes, I tried that. First they wouldn't let me in because I was crazy. Now they won't let me in because I'm pregnant. Discrimination, sez I!

please tell me your insanity is not genetic. hate for that to be passed on to your kids.

Wow. It must be very stressful not knowing how to spend the money they have.
That's hardly their problem. Mental health issues are quite serious, and they're amplified in an environment in which you can't show the slightest hint of weakness and in which everything hangs on being the hardest mofo on the block.

Neu, can you explain something for me por favor?

I get the sense that whilst "credit crunch" may be a useful term for the problems with lending and borrowing, it has been run with by the media to the point of inanity and used as an umbrella term for any current economic downturn or pessimism. I guess what I want to know is: how does the credit crunch affect people like me who don't borrow much if anything and what effect has it had on the wider economy?

That's hardly their problem. Mental health issues are quite serious, and they're amplified in an environment in which you can't show the slightest hint of weakness and in which everything hangs on being the hardest mofo on the block.


If you want to talk about mental health of soldiers, policemen and firemen, I am all for it.

Poor little rich bankers? Sorry I just don't feel for them.

Neu, can you explain something for me por favor?

I get the sense that whilst "credit crunch" may be a useful term for the problems with lending and borrowing, it has been run with by the media to the point of inanity and used as an umbrella term for any current economic downturn or pessimism. I guess what I want to know is: how does the credit crunch affect people like me who don't borrow much if anything and what effect has it had on the wider economy?
Well, the main effect is through investment. GDP is made up of private consumption, government spending, net exports and investment. And that latter bit is also the most volatile.

Two primary channels cut investment in a credit crunch: businesses that need to borrow to invest in new capacity, and the collapse in financial markets that ruins the other source of funding for them. Then there are a few more channels that just generally filter the effect from interest rate changes into the real economy.

So when investment falls, employment comes soon after. And that combines with a real cut in household wealth right now as house prices fall all over the place and larger parts of income will be spent on aggregate interest payments, which also reduces consumption (along with the generally bad mood).

On the plus side, the weak dollar should improve the trade deficit somewhat, but not enough to cancel out those other effects. Basically, credit crunches were the main reason (they had their own causes obviously) for the Asian Crisis and the Great Depression, for example, though those were worse than what we see at this point.

If you want to talk about mental health of soldiers, policemen and firemen, I am all for it.

Poor little rich bankers? Sorry I just don't feel for them.
That's childish.

That's childish.

How so?

Why is it tragic they have mental health issues and the resources to deal with them?

Ever live with somebody that can't afford proper mental care?

Why is it tragic they have mental health issues and the resources to deal with them?
They don't. Money is not the only resource that is needed to get over something like depression, bipolar disorder or stress-related breakdowns.

Two primary channels cut investment in a credit crunch: businesses that need to borrow to invest in new capacity, and the collapse in financial markets that ruins the other source of funding for them. Then there are a few more channels that just generally filter the effect from interest rate changes into the real economy.


There is too much capacity probably. And it's not as if all credit markets have frozen. Plenty of hot money is still whizzing round looking for a home. Vulture funds seem to be able to raise capital for example.

It sucks for a lot of IBs though, because in order for the securitization model to be profitable going forward the value of the securitized assets has to continue to rise, & since the underlying valuations got to unrealistic heights their business is gone - nevermind the losses. So take Lehman, even when this is over, its going to be a long time before it is ever making money like it was.

Toldja the bear stearns thing was a waste of time though.

There is too much capacity probably. And it's not as if all credit markets have frozen. Plenty of hot money is still whizzing round looking for a home. Vulture funds seem to be able to raise capital for example.
So are you saying the recession, if it comes, is all in people's heads? :p

It sucks for a lot of IBs though, because in order for the securitization model to be profitable going forward the value of the securitized assets has to continue to rise, & since the underlying valuations got to unrealistic heights their business is gone - nevermind the losses. So take Lehman, even when this is over, its going to be a long time before it is ever making money like it was.
They'll manage. Goldman seems to be doing things right for example, there is money to be made in prime brokerage and commodities. These organisations don't deserve to earn the sort of money they do if they don't stay at the cutting edge at all times. They exist because they push the envelope, and if one product ends its life, they need to find something else.

Toldja the bear stearns thing was a waste of time though.
I wouldn't call it a waste of time. Putting out a housefire in Hiroshima a week before the bomb drops may in retrospect have been a futile effort, but you wouldn't say it was the wrong thing to do.

And besides, we'll still have to see how this thing shakes out. Though connected, Bear was about Wall Street and a financial panic, while this thing now is just fall-out from the real, initial problem, namely the housing collapse.

So are you saying the recession, if it comes, is all in people's heads? :p

No, I'm saying that a lot of the 'credit crunch' is actually people waking up to the fact that these valuations were unrealistic to say the least (and that a lot of the structured products were crap. The pie is only so big, and you can't make it any bigger, no matter how cleverly you slice it). Of course a recession is coming, I've been saying this for a while, but when it does it is actually a normal process of wringing out of the excesses everyone (well nearly everyone) admits that were there. Completely healthy process, though painful for many.


They'll manage. Goldman seems to be doing things right for example, there is money to be made in prime brokerage and commodities. These organisations don't deserve to earn the sort of money they do if they don't stay at the cutting edge at all times. They exist because they push the envelope, and if one product ends its life, they need to find something else.

Yah. I'm not saying IBs will disappear. That's for the tinfoil crowd. I do say however that their business will be substantially reduced going forward for a while because the structured products have shown up the weaknesses in the rating agencies and the poor internal controls that many of the IBs had (even goldman - though they seem to find a new pony every quarter so I'm sure they'll be just fine).

So until the ratings problem is sorted, they won't be able to sell products out the back to pension funds and insurance companies the way there were able to over the past ten years or so, regardless of whether or not they come up with something new. Not that there will be much need for it in the immediate future anyway. I would normally expect a round of consolidation, but that might be problematic from a regulatory standpoint after the Bear debacle.

End of the day, there is going to be a rather substantial contraction in overall IB activity. It's unavoidable since that's sort of the ground zero for the whole thing. Of course certain departments within the IBs will also prosper, so it all depends where you sit.


I wouldn't call it a waste of time. Putting out a housefire in Hiroshima a week before the bomb drops may in retrospect have been a futile effort, but you wouldn't say it was the wrong thing to do.

And besides, we'll still have to see how this thing shakes out. Though connected, Bear was about Wall Street and a financial panic, while this thing now is just fall-out from the real, initial problem, namely the housing collapse.

Well it was if you new the bomb was going to drop and it was going to cost twenty nine billion to put it out. I listened to Paulson last week and he was talking about waiting for private money to return to buying the hard to price assets. Well, he'll have a long wait. People are actually ready to swoop on them, but not until they actually go out for a market bid, something which the government is unwilling to let happen at the moment. It's unreal.

I don't really think you can separate bears problems - such as they were - from the housing fall out either. The problems in the credit markets had spread to beyond housing by January.

On the other hand, Dimon just realized that he was hosed too. So I suppose it all ends well. (Though if I was him I'd be worrying about all those second mortgages I was carrying in california).

Do you know what your credit score is? Do you care? How often do you check your credit score?

Well a credit score is supposed to be important if you are applying for a loan because in theory the higher your credit score the lower your interest rate.

Ok, so why bring this up? Mrs. C and I are applying for a loan to buy a manufactured home. My credit broker came up with two different loans, one was a conventional loan and the other is a government garanteed loan. For several reasons we opted for the conventional loan. We have great credit, low debt, good income, and enough land equity and cash for a 20% down payment.

I got an e-mail from my mortgage broker a couple of days ago and because of the current mortgage crisis NO CONVENTIONAL loans are available for a reasonable interest rate.

So, now it's back to square one and it looks like we will have to go for the government backed loan, which will end up costing us more in closing costs, but what the hell can you do.

Predatory lending practices and people who want more house than they can afford have caused this problem which means I have to pay more to get a loan I should have to pay less for. It also means that people with marginal credit scores are not going to be able to get homes and the American tax payer is going to have to shell out money to bail out the mortgage companies and irresponsable people.

So, has the current lending crisis hit you yet? Do you expect to pay more for a mortgage, car loan, credit card, or student loan because of it.

It is a way for the bank to screw you.

Under the old rules, if you had a VA or FHA loan, there were provisions to help the homeowner that conventional loans did not. Banks say that they do not want to foreclose a home, because they have to take possession of the house and resell it. However, about 5 years ago, the banking industry had a late night change done by the congress. If you get foreclosed on a VA or FHA loan, VA or FHA has to pay off the mortgage to the bank, and they have to take control of the residence and resell it instead of the bank.

Do you remember all the foreclosures that ocurred between 02-05? Most of those were VA or FHA loans. One dirty trick that the banks will play is that they will place a foreclosure notice on your credit report, that way you are stuck with them since no one else will refinance.

If the mortgage holder is Washington Mutual (WAMU) or HomeSide, run like hell. They will change the terms of the original mortgage and "fail" to notify you. Of course, they cannot do that, but it does not stop them.

I was a career firefighter and had a career ending injury, and ended up loosing my job with the FD. WAMU kept telling me that they would work with me to deal with the income loss, and they still foreclosed on me. What really blew my mind about WAMU was that after they foreclosed on me and the eviction notice was served on me, they sold the mortgage to Wells Fargo one year FHA payed WAMU!!!

I have a strong aversion to loans. I prefer to save money, storing them in tradeable and profitable stocks, and pay in cash or bank transfer whenever possible. If I can't pay in cash for something, that means I can't afford it. Only in rare circumstances do I use credit, and then pay up as soon as possible.


By using credit, you're wasting money. You pay a considerable extra for getting absolutely the same, but a bit sooner. Just spend two years without big purchases, saving money, and you'll never need to use credit. What's more, the investment return on this money will provide you with a stable bonus to income.
Of course, it doesn't include subsidized loans.

Really? Try saving your money for two years and buying a house with no mortgage in most real estate markets. Credit is important if you are going to get a mortgage to buy a home and the interest tends to be super cheap after taxes.

It won't, because my only loan (car) is paid early every month and my credit card bill is paid in full at the end of the month.
House: paid for
Car: paid for
Credit cards: charged $400 in 2003, paid it off that month
Bills: autopay monthly
Wife: ex
Job: pretty much solid
Yay living within your means.
Yay living way beneath your means.

Really? Try saving your money for two years and buying a house with no mortgage in most real estate markets. Credit is important if you are going to get a mortgage to buy a home and the interest tends to be super cheap after taxes.

None of that is true.

You don't need "credit" from debt to get a mortgage. I've never had debt aside from medical bills and I got a 15 year fixed rate at a low interest rate. Got approved in less than 3 days by the first bank I called. You do need a down payment, however NOBODY should be buying a house if they can't even scrape together 20% down.

The net savings on your tax return is so low it's not even funny. It doesn't mitigate the interest you pay in the least and it doesn't even really help on your taxes. You would be better served giving the same amount to charity that you would pay in interest, that way you still get the deduction, and you aren't risking default on a house because you're too stupid to do basic math.

Yay living way beneath your means.

;) I knew someone here was smart. I didn't expect it to be you......:D *runs away*

Won't affect me. Don't have a mortgage and not planning on buying a house.

I have zero balance on all 4 credit cards and I live well within my income.

Really? Try saving your money for two years and buying a house with no mortgage in most real estate markets. Credit is important if you are going to get a mortgage to buy a home and the interest tends to be super cheap after taxes.
House mortgages are separate from just credit. First of all, a house is indeed too expensive, second, you need to live somewhere anyway. So in case of a house you save on rent by getting it earlier. Plus this market is effectively subsidized.

In case of most stuff, like new furniture, electronic toys, etc, it doesn't really matter if you rush with credit or just wait for a while; yet you can save a lot.
I'm especially amused by people using credit for rapidly depreciating goods - with interest, charges and depreciation combined, they could get it for half the price in just a couple months.

Cars are also much cheaper to buy when you have enough cash, not to mention you can enter the used car market and get much better value for money.

Do you know what your credit score is? Do you care? How often do you check your credit score?

Well a credit score is supposed to be important if you are applying for a loan because in theory the higher your credit score the lower your interest rate.

Ok, so why bring this up? Mrs. C and I are applying for a loan to buy a manufactured home. My credit broker came up with two different loans, one was a conventional loan and the other is a government garanteed loan. For several reasons we opted for the conventional loan. We have great credit, low debt, good income, and enough land equity and cash for a 20% down payment.

I got an e-mail from my mortgage broker a couple of days ago and because of the current mortgage crisis NO CONVENTIONAL loans are available for a reasonable interest rate.

So, now it's back to square one and it looks like we will have to go for the government backed loan, which will end up costing us more in closing costs, but what the hell can you do.

Predatory lending practices and people who want more house than they can afford have caused this problem which means I have to pay more to get a loan I should have to pay less for. It also means that people with marginal credit scores are not going to be able to get homes and the American tax payer is going to have to shell out money to bail out the mortgage companies and irresponsable people.

So, has the current lending crisis hit you yet? Do you expect to pay more for a mortgage, car loan, credit card, or student loan because of it.
Can you join a credit union? We just got a conventional loan from Navy Federal at 5.5 % for a cabin in north Georgia.
If you can put 20% down, you should be able to do better than a gov't backed loan (VA?)

It is more than just mortgages.

Things are more linked together than most people realize, and most large scale investors are going to experience losses.

This includes every large investor from rich people (like Warren Buffett) to regional banks, to entire countries.

Additionally, while many may see this as a US-only problem, it actually affects every Western nation that has engaged in deficit spending and/or has large consumer debt in the form of mortgages or unsecured credit cards.

A crisis of confidence in one nation, where a large portion of debt is held by foreign nations, easily spreads to another similar nation, where a large portion of debt is held by foreign nations.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/16/ccusdebt116.xml

If the banks go, and the governments can't raise money by borrowing because confidence is shot, you can kiss a lot of things goodbye:

1. Mortgages will become extremely difficult to obtain. Kiss owning your own house goodbye for most people.
2. You may lose any savings you have over the government insured limit.
3. You may find that the government isn't doing a lot anymore, from repairing or building roads, to buying new schoolbooks, to sending the military somewhere (you may like that last bit).
4. We're going to experience inflation, in a major way, and not just in the US.

Keynes was an ass, and the whole of American government seems to have been based on deficit spending (while the annual deficit may have been close to "balanced" on paper, the overall debt of the US, especially when Fannie Mae and Freddie Mac are included, has been astronomical for decades).

Add a few supply side shocks, like our current oil crisis, and every Western nation with deficit spending and massive government debt is fucked.

So its apparent that everyone on NS has good credit and lives within their means. Too bad the rest of the country doesnt reflect that.

So its apparent that everyone on NS has good credit and lives within their means. Too bad the rest of the country doesnt reflect that.

I find the first part extremely improbable. I think that some here live in their parents' house, some are students at uni, some are barely scraping by and therefore have bad or little credit, and some are doing better (but probably have spotted credit histories and substantial debt).

Yeah, it just seems like only the people that dont have credit problems are posting. I want to see horror stories, man. Not "I dont use credit cards, house and car paid for"

I want to see "I have 5 credit cards that are maxed out and my house is being foreclosed"

Where are you? Do you people go on the internets?

Yeah, it just seems like only the people that dont have credit problems are posting. I want to see horror stories, man. Not "I dont use credit cards, house and car paid for"

I want to see "I have 5 credit cards that are maxed out and my house is being foreclosed"

Where are you? Do you people go on the internets?

I figure that most people are not telling the truth about their credit history on this forum.

Well that sucks. What good is a thread like this without a misery and dread post?

4. We're going to experience inflation, in a major way, and not just in the US.
Add a few supply side shocks, like our current oil crisis, and every Western nation with deficit spending and massive government debt is fucked.
Indeed. The inflation is going to get massive.

The US Dollar is getting useless. It's not backed by anything. It's not backed by gold, it's not a highly desirable currency, it's not backed by an economy to match its use, it's not backed by oil - it's just supported by everyone since no one wants it to fall.
Oil is pretty much the XX century gold. It's not just that oil prices that are jumping, but also the dollar and dollar-based currencies that are falling. And it's not just oil. Copper, aluminium, steel - the resources - are rising in price; or, rather, the Dollar is falling relative to them.

Drop the final backing for the USD, the US economy, and the dollar is going down. Then, if it's going down, there's a risk that nations will start selling their reserves. The whole world is working to keep USD afloat, they cut support, and it plummets.

Indeed. The inflation is going to get massive.

The US Dollar is getting useless. It's not backed by anything. It's not backed by gold, it's not a highly desirable currency, it's not backed by an economy to match its use, it's not backed by oil - it's just supported by everyone since no one wants it to fall.
Oil is pretty much the XX century gold. It's not just that oil prices that are jumping, but also the dollar and dollar-based currencies that are falling. And it's not just oil. Copper, aluminium, steel - the resources - are rising in price; or, rather, the Dollar is falling relative to them.

Drop the final backing for the USD, the US economy, and the dollar is going down. Then, if it's going down, there's a risk that nations will start selling their reserves. The whole world is working to keep USD afloat, they cut support, and it plummets.

QFT. No fiat currency is stable, and the current policy of issuing dollars and going into debt is crushing the value of my money. the stimulus checks are created bu more government debt. the bailouts in the financial sector are finaced through debt and through issuing more money. We may be facing hyperinflation soon unless sound government policies are enacted (riiiiiight...) and we are definitely losing even if we only face standard inflationary trends. recall that the great depression occurred less than 20 years after the federal reserve act, which supposedly was going to eliminate those scary recession dangers of a gold-backed dollar.

Over the past century, our glorious dollar has fallen to only about 5% of its old buying power.that did not happen when the dollar was backed by precious metals - some analysts say nthat the value even increased in value during the first century of US history.

I figure that most people are not telling the truth about their credit history on this forum.

not really...
http://img229.imageshack.us/img229/9972/63186140fe9.jpg

Deflation is the real worry here. Not inflation.

Deflation? How do you figure? The dollar has been dropping like a rock, and they're not about to stop making more dollars.

Personally, I'm taking out my first student loan, since my assistantship hasn't been enough to make ends meet, but I'm not worried about suffering from the credit crisis.

Especially since interest is going to be deferred until I'm done with school, everything I leave sitting in the bank will earn interest in my favor in the mean time (another 4-7 years), the dollar is likely to continue to fall, english-speaking Ph. Ds will still be in demand somewhere in the world even if the US economy tanks, and the amount of money is very small compared to the salary I can expect to pull.

Between that and the grace period, I expect to be able to have everything paid back before I have to pay a full year's interest on that student loan.

It shouldn't have a big impact on myself. Our assets are fairly good and we don't personally have an issue on getting credit. I actually plan on making a bit of money on this whole mess. I have the ability to put money down and still get the good rates.

Deflation is the real worry here. Not inflation.

How is deflation bad? I means that those of us who have saved money will be wealthier than ever before!

Yeah, it just seems like only the people that dont have credit problems are posting. I want to see horror stories, man. Not "I dont use credit cards, house and car paid for"

I want to see "I have 5 credit cards that are maxed out and my house is being foreclosed"

Where are you? Do you people go on the internets?

Did you miss the dude upthread with 4 mortgages? That scared me.

I could tell you horror stories about my clients, but you might not be able to sleep.

How is deflation bad? I means that those of us who have saved money will be wealthier than ever before!
Actually, deflation is a bigger problem than inflation. Deflation makes people wait with spending money, which cuts employment leading to further price decreases and so on and so forth. Getting out of that sort of thing is very difficult and quite painful, especially since monetary policy is somewhat constrained at some point.

Hence why central banks prefer some positive level of inflation to aiming for zero. Afterall, some level of inflation also reflects the fact that products get better and should be more expensive as they provide a greater benefit, but don't necessarily form a new category in price index baskets. A car in 1950 may have cost less, but a car today also has a whole bunch of extra features. But when you compare the two with statistical methods, it may not be feasible to reflect those differences properly, and you end up comparing "car" with "car".

Anyways, I don't think deflation is that big a worry. I mean, the new figures came out and US inflation is at a 26 year record (http://www.businessspectator.com.au/bs.nsf/Article/US-June-CPI-rise-biggest-in-26-yrs-GLHAM?OpenDocument).

Actually, deflation is a bigger problem than inflation. Deflation makes people wait with spending money, which cuts employment leading to further price decreases and so on and so forth. Getting out of that sort of thing is very difficult and quite painful, especially since monetary policy is somewhat constrained at some point.

Hence why central banks prefer some positive level of inflation to aiming for zero. Afterall, some level of inflation also reflects the fact that products get better and should be more expensive as they provide a greater benefit, but don't necessarily form a new category in price index baskets. A car in 1950 may have cost less, but a car today also has a whole bunch of extra features. But when you compare the two with statistical methods, it may not be feasible to reflect those differences properly, and you end up comparing "car" with "car".

Anyways, I don't think deflation is that big a worry. I mean, the new figures came out and US inflation is at a 26 year record (http://www.businessspectator.com.au/bs.nsf/Article/US-June-CPI-rise-biggest-in-26-yrs-GLHAM?OpenDocument).

I request proof. Your statement is purely hypothetical, since there hasn't been an example of a deflating currency in the history of the world to the best of my knowledge. All I acn say is that inflation is clearly a problem, and it's therefore possible that the reverse would be beneficial. If the value of your money increases, it is advantageous to save. the poor benefit as muchas the wealthy, because the necessities are cheaper and they can escape the subsistence lifestyle.

Anyways, I don't think deflation is that big a worry. I mean, the new figures came out and US inflation is at a 26 year record (http://www.businessspectator.com.au/bs.nsf/Article/US-June-CPI-rise-biggest-in-26-yrs-GLHAM?OpenDocument).

The potential for deflation is clearly there. You can't have all that debt defaulting and credit lines being pulled without it. Plus consumers have only just started to really pull their horns in. I'd be surprised if the CPI goes very much higher than this.

I'd guess that once the we are well into the turn and the slowdown has spread - both geographically and across sectors - commodities, which have been driving this, are ready for a sharp fall.

The potential for deflation is clearly there. You can't have all that debt defaulting and credit lines being pulled without it. Plus consumers have only just started to really pull their horns in. I'd be surprised if the CPI goes very much higher than this.

I'd guess that once the we are well into the turn and the slowdown has spread - both geographically and across sectors - commodities, which have been driving this, are ready for a sharp fall.

So back to cheap gas?

I request proof. Your statement is purely hypothetical, since there hasn't been an example of a deflating currency in the history of the world to the best of my knowledge. All I acn say is that inflation is clearly a problem, and it's therefore possible that the reverse would be beneficial. If the value of your money increases, it is advantageous to save. the poor benefit as muchas the wealthy, because the necessities are cheaper and they can escape the subsistence lifestyle.

US, late 1929-1934. That's an example of deflation.

So back to cheap gas?

Nah. Not gas. People have to live with that.

(Though actually cheaper gas is probably on the cards. Demand destruction and all that).

Interesting read:

http://www.drschoon.com/articles%5CBankersBullshitAndBullioin.pdf

Your statement is purely hypothetical, since there hasn't been an example of a deflating currency in the history of the world to the best of my knowledge.
Oh, it's been lots of times. Back in the times of gold-backed currency it happened every few years or so, but back then it wasn't a problem. In more recent cases, it was.

The potential for deflation is clearly there. You can't have all that debt defaulting and credit lines being pulled without it. Plus consumers have only just started to really pull their horns in. I'd be surprised if the CPI goes very much higher than this.
So then the choice is between stagflation and deflation. Nice.

US, late 1929-1934. That's an example of deflation.
And then there's Japan in the 90s.

House: paid for
Car: paid for
Credit cards: charged $400 in 2003, paid it off that month
Bills: autopay monthly
Wife: ex
Job: pretty much solid

Yay living way beneath your means.


Nice, key here is living well beneath ones means. I know the wife and I do. No matter what amount of a living wage one makes really you need to live beneath it. It is surprising how much money adds up over time if you save and invest it.

Yeah, it just seems like only the people that dont have credit problems are posting. I want to see horror stories, man. Not "I dont use credit cards, house and car paid for"

I want to see "I have 5 credit cards that are maxed out and my house is being foreclosed"

Where are you? Do you people go on the internets?


No money, no Internet.