New data released today by FICO Inc. show that a whopping 25.5 percent of consumers now have a credit score of 599 or below. That’s a market of more than 43 million people, and growing every day, too—thanks to unemployment levels that appear set to remain painfully high for the next five years. All of which underscores a unique irony to the financial mess we’re now in: much of the growth in demand... [more]
New data released today by FICO Inc. show that a whopping 25.5 percent of consumers now have a credit score of 599 or below. That’s a market of more than 43 million people, and growing every day, too—thanks to unemployment levels that appear set to remain painfully high for the next five years.
All of which underscores a unique irony to the financial mess we’re now in: much of the growth in demand for mortgages in recent history came out of the subprime sector, now thoroughly villianized and vaporized. Subprime mortgages represented between 8 and 15 percent of total origination volume between 1995 and 2003, according to data published by Inside Mortgage Finance.
http://www.housingwire.com/2010/07/12/subprime-lending-is-dead-long-live-subprime-lending[less]
Response by Riversider
about 16 years ago
Posts: 13573
Member since: Apr 2009
Of course the problem wasn't low quality lending, the problem was stated income/liar loans, poor appraisals, and exotic products that did not meet a need.
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Response by Bernie123
about 16 years ago
Posts: 281
Member since: Apr 2009
The score itself doesn't mean anything per se it's meaning is like this: every 20 pt drop doubles the chance of a default. But it's true that there are certain pyschological thresholds: actually < 660 is normally called subprime and < 600 is "deep subprime". But the article's right: this segment isn't being lent a dime by anyone - even if banks wanted to take the risk the Fed won't allow it.
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Response by notadmin
about 16 years ago
Posts: 3835
Member since: Jul 2008
Did the proposal to ban potential employers from checking credit score of employee candidates went through? Sounds to me like not going anywhere, but wonder how many of the well paying jobs actually check the score. I know it's common in finance and several companies like boeing. Anybody knows this?
Of course the problem wasn't low quality lending, the problem was stated income/liar loans, poor appraisals, and exotic products that did not meet a need.
The score itself doesn't mean anything per se it's meaning is like this: every 20 pt drop doubles the chance of a default. But it's true that there are certain pyschological thresholds: actually < 660 is normally called subprime and < 600 is "deep subprime". But the article's right: this segment isn't being lent a dime by anyone - even if banks wanted to take the risk the Fed won't allow it.
Did the proposal to ban potential employers from checking credit score of employee candidates went through? Sounds to me like not going anywhere, but wonder how many of the well paying jobs actually check the score. I know it's common in finance and several companies like boeing. Anybody knows this?