Relevant:

Credit scoring - should it be killed?

2009-07-12 — examiner.com

"In the years that the mortgage industry has used credit-scoring as a tool to determine borrowers' creditworthiness, or a borrowers' ability to pay back a mortgage, the industry has not experienced a market like this. Even the historical data used to create the scoring model does not date back to a market like this."

Comments:

catherine at 19:50 2009-07-13 said:

during the 80s the banks created these scores and started using them in the early 90s and took it out of the hands of underwriters.

However there is no such thing as PERFECT UNDERWRITING

there can be no way to account for property falling 50% and 1 million a month losing their jobs.

this is why the government is going to own housing and mortgages. They were freaking when they found out that there is really no hard wired penalty for walking away from an investment as large as a house.

Next time we have this downfall you will be walking away on a government loan and THE IRS WILL FOLLOW YOU UNTIL YOU DIE.

All the bashing of bad underwriting and subprime loans causing this mess was a huge smokescreeen, THERE IS NO WAY TO FIGURE OUT WHO WILL LOSE THEIR JOB OR NO WAY TO KEEP VALUES UP ARTIFICIALLY

and alas NO WAY TO FIGURE OUT WHO WALKS

CONSEQUENTLY THE GOVERNMENT WILL BE DOING RENT TO OWN MORTGAGES SOONER THAN YOU THINK................. Permalink

Mr. X at 21:56 2009-07-13 said:

In my opinion it would be easier for banks to redline w/out using credit scores. The problem isn't with using credit scores, the problem is with the decisions to rely on the credit score alone. Permalink

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