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     | Friday, February 23, 2001 - 10:30 am  In the future we will see risk-based pricing for rent on properties. You'll come in to rent an apartment advertised at $600 a month and your application will be processed through a scoring model. The person will smile at you and say, "I'm sorry, but based on your history at other rental properties, we'll need to charge you $630 a month to live here, because there is a greater risk of you doing damage to our property or needing to be evicted." Or perhaps he'll smile at you and say, "Based on your excellent history we can offer you the $600 a month rent and only a $25.00 security deposit because we know what a fine tenant you are." That's my dream: to someday have a scoring model that can predict tenant behavior. We'll know which tenants are likely to stay long-term and which ones will move out too soon and leave a vacancy. We'll be able to charge those frequent movers extra to recover our costs.
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| | Friday, February 23, 2001 - 12:05 pm Shylock, why not just replace the brain with a processor? Or give everybody a lobotomy? Your dream is converting human beings to machines without emotions. Do you enjoy sex with a machine? It's a little odd that you've posted in favor of CHANGE, yet when it comes to *people,* you want them to be robots. I sure wouldn't want to be surrounded by drones, or even worse, become one myself. I can hardly stand going into cities anymore. People are rushing from work to the store to home to the gym ... like the worker ants. The ability to rationalize and CHANGE what I'm doing is what makes MY life worth living. I have choices, and *sometimes* I wished I didn't. It's often difficult to decide what to do. Shylock's dream is corporate's and the government's dream. Through legislation, public policy, advertisements and propaganda many people already have become drones. Get up in the morning, go to work, get so frustrated that all you can look forward to is have some beers and joints after work while watching some sitcoms on TV. That's after you dealt with your bills, credit report, and more frustration. And on the weekend you shop for more stuff you don't need, to reward yourself, to make you feel better. And on Monday you go back to work to your miserable job so you can pay for that stuff. I know many people who actually like this lifestyle. Anything to not have to think. The human brain is unpredictable. However, communist regimes certainly succeeded in a VERY predictable population. There are dissidents, but not many. It's really sad to see that America, of all places, is going down that same road as communism. Instead of encouraging individualism, realizing the full potential of our brains, expanding our consciousness, we are all supposed to be the same, to be like everybody else and do what everybody else does. We're being trained like rats. "Be like everybody else, conform, and you'll be ok!" We are profiled, tracked, monitored and strongly encouraged not to take any risks and to make no changes. You don't go to jail for shopping for the best interest rate, but you pay more. You don't go to jail for taking a year off to explore this beautiful planet, but you'll pay for it by not being able to get a good job afterwards as you might take off again. And of course your credit score will suck after you lived on cash for a year and you don't have any open accounts. Credit scoring is the GULAG of America. Webster's definition of gulag: the penal system of the U.S.S.R. consisting of a network of labor camps. You don't HAVE to strive for an acceptable score, but unless you're wealthy you'll PAY for having that low score. You'll work those extra hours or jobs to pay for the higher insurance premiums, to pay for deposits on cell phones and pagers, to pay for higher interest rates, rents, etc. etc. etc. I once again question why I support the American gulag by bringing attention to the importance of high credit scores at BayHouse.
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| | Friday, February 23, 2001 - 02:12 pm you're doing a wonderful job, christine, as we all want to be treated as the human beings we are, not like rats and ants that computer models not even now can predict patterns of behavior accurately. FICO is applying this to real people and real life, and it isn't working. the fed and much of the mortgage industry are sold on the belief that some quackware can give equitable consideration to every credit applicant under every set of circumstances--- my suggestion that they create models to evaluate the inherent risk of investing in the stock market have gone largely ignored. we are dealing with human beings here, not ants. credit scoring now has absolute rule over who gets credit, who doesn't and how much each person pays for credit. in most cases, nobody even looks at the credit profile anymore; all they see is the score. i made a long posting last night about this-- if people were made of silicon, perhaps FICO could work. when i was at harvard i recall a model that was used for squid migrations, and the fishermen improved their catch dramaticaly. there is a good place for computer models, and they can increase production, reduce costs, and make many things work more effeciently when applied appropriately. human behavior, and sectors such as marketplaces that are driven more by emotion than logic are NOT within domain of any form of predictability, and not even experts in related fields make the right call-- now absolute authority is delegated to a machine, under sanction and protection of the federal government, and has completely changed the way mortgage underwriting is done. i have had terrible problems with it because my shell may be slightly off color, or i came out of the egg with 7 legs and only one antenna. sorry, you don't fit the model, and SQUISH!!-- didn't hitler try to impose this type of thing on his country, under a veil of false promise, lies and hate?-- how many of us would still be around if he had won that war and was now judging the world through the eyes of a machine. look at what happened when he deceived his people into the belief that such a thing as the perfect person could exist, or actually be created. round and round we all go, because no matter how many times conformity is forced upon people from a higher authority, the result is destruction and chaos. nobody learns-- human beings are not ants! enough for now--- credit scoring is a SHAM when it is given power to take over roles which should be filled by people, not machines. heads in high places need to be yanked out of their owners' assholes, so real people can go back to being treated as such in a free market economy, and a free world. FICO SUCKS!!
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| | Friday, February 23, 2001 - 04:31 pm Credit scoring is not at all about predicting anything. It's about behaviour modification. We get points for what they want us to do, and we lose points for what they don't want us to do. You may substitute "points" with "cash." We know that we're NOT supposed to SHOP for the best deals. Inquiries are always bad. Corporate doesn't want us to shop because it lowers their profits, so they let us know about that. And of course they want us to make the payments on time, so they tell us that too. But we don't know if we have too many accounts, or too few accounts, too high a balance, or too low a balance, the list of unknowns is endless. The rats in the labs are running around the labyrinth trying to find the food. They don't get a map to read or any kind of directions. Just like the rats, we know for sure that there is the reward, somewhere, and we'll just have to try as hard as we can to get there. Just like the rats, we're desperately chasing our reward, the credit score needed to get that loan, insurance policy, apartment ... As soon as we get a clue about how to get our reward, they change the path! Fair Isaac creates new risk factors and modifies their algorythms, and there we go again, desperately trying to figure out how to get that required credit score. Can't we do better than rats?
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| | Friday, February 23, 2001 - 07:00 pm I knew that would get y'all going. ;)
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| | Friday, February 23, 2001 - 07:27 pm As so often, I didn't know whether you're serious! But every time I ask, you say you are. Reality is, your posting is exactly where we're at. Your dream is just about every decision maker's dream. Nobody wants to take responsibility. It's so much easier to blame a score or computer for the decline. Why think when you can avoid it? You might strain your brain ...
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| | Saturday, February 24, 2001 - 12:01 pm Christine: "As soon as we get a clue about how to get our reward, they change the path!" Precisely! That's why, after FICO tweaks their software to NextJunk, having the old credit scores will be useless, etc. etc. It truly IS chasing your own tail; and Fair Isaac wants it that way so they can score future software sales. The world corporate likes it because they feel they always need to have the "cutting-edge" risk predictors/decision makers in their company servers.
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| | Saturday, February 24, 2001 - 03:36 pm I was 100% serious about risk-based pricing in the rental industry, but I knew it would draw immediately knee-jerk flak. I giggled a little as I made my post. But in all seriousness, do any of you doubt that what I predicted is going to happen?
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| | Sunday, February 25, 2001 - 12:07 am it won't happen to you if you come to boston and want to rent one of my apartments, shylock. be glad there is still some humanity out here in the real estate industry. the fact that we may not share similar views re: quackware vs. qualified professional judgement for mortgage underwriting won't make me treat you any differently than any other applicant. try to teach that philosophy to a computer--- g'nite--  *
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| | Sunday, February 25, 2001 - 07:33 am I don't rent, I own. However when such a scoring system comes about I'd love to run an apartment building right next to yours and we'll see what works better for evaluating applicants: statistical models or the subjective judgement of a property manager.
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| | Sunday, February 25, 2001 - 12:14 pm Shylock, why are you so afraid to think for yourself? What's wrong with reviewing an applicant's rent application, evaluate his employment, have a conversation with that person, and then make a decision? Do we have any psychologists here? Decision making phobia? Lack of confidence? You're not an idiot. What are you so afraid of?
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| | Sunday, February 25, 2001 - 12:47 pm Mathematical algorithms don't take into account extenuating circumstances. Remember, bad credit isn't always indicative of bad character. Conversely, under the user pay U.S. medical system, people are routinely WIPED OUT, emotionally and financially, by severe illnesses, etc. Unfortunately, everybody, including the Fed most importantly, has bought into FICO and the like for automatic evaluation. It has grown in this fertile soil of popularity because of a systemic BACKLASH against the entitlement mentality; the "Me-ism" so prevalent in our society especially since the 1950's. This causes victims and casualties in the dogged effort to weed out the real abusers with these attitudes. For example, here in Ontario, the FIRST thing Mike Harris, our premier, did in government was to GO AFTER welfare cheats and IMMEDIATELY cut benefits by over 20%. This undoubtedly hurt every family who really NEEDED these payments in these efforts to follow what was perceived the public will in the tough legislation. The poor families STILL pay for the bad character of the real cheaters. I can't see in my lifetime how a computer program can take all this into account without hurting those who need help the most (i.e. through debt relief).
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| | Sunday, February 25, 2001 - 03:19 pm Christine, why are you so afraid of progress? Zachary1, why do you think it's ok to steal?
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| | Sunday, February 25, 2001 - 03:41 pm Me, afraid of progress? You gotta be kidding. I have solar and a wind gen, BayHouse was one of the first real estate/credit sites on the web, I jumped on the opportunity to work ANYWHERE and utilize cell phones and satellites and the net ... I LIVE for progress! BTW, I'm applying Webster's definition # 3 of PROGRESS : gradual betterment; especially: the progressive development of mankind Shylock, I'm willing to discuss your "dream" quite seriously. So give me an answer: "What's wrong with reviewing an applicant's rent application, evaluate his employment, have a conversation with that person, and then make a decision?" Also, maybe you could post the top 5 reasons for tenants' reasons to move out, I'm sure you got some statistics from your local apartment association.
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| | Sunday, February 25, 2001 - 04:11 pm It's amusing that you think wind and solar power is progress. Both of these are more expensive and less efficient than burning coal or gasoline. Anyway evaluating someone in terms of his rent application, employment, etc. is all fine and good, but you can only evaluate someone on a pass/fail basis. Even people with poor credit and/or past evictions need to live somewhere. There's a huge market out there of people who need housing, but get turned down everytime they apply. My girlfriend is one of them. This is a vast, untapped market that could be turned into a great profit by just charging these people enough to cover the risk they represent. But how can you know how much extra to charge? That's where you need some calculations to come in. And that's what computers specialize in.
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| | Sunday, February 25, 2001 - 04:15 pm What calculations?
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| | Monday, February 26, 2001 - 04:29 pm Once you know a person's likelihood of non-payment and the cost of eviction you can factor that into the rent. That's what calculations.
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| | Monday, February 26, 2001 - 05:20 pm Oh, didn't you want to predict early movers?
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| | Monday, February 26, 2001 - 05:30 pm Also, I greatly appreciate the calculating capabilities of my computer. BUT, ** I ** check the results with my own calculations. Too many times I have seen flawed formulas even in payware. How is some software supposed to know what YOUR cost of eviction is?
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| | Monday, February 26, 2001 - 06:34 pm i'm a rental broker, and what you are suggesting, shylock, is illegal in massachusetts. a landlord can ask for first month, last month, and security deposit up to one month's rent, and no more. very stiff penalties can be imposed if this protocol is not followed. using a computer model as an absolute determinant whether or not to rent to an applicant, or reason to jack the price because somebody didn't get the right numerical score, would land lots of people in court, especially authors of such quackware. FICO now governs the real estate lending industry nationwide only because fannie mae and freddie mac were sold on it. it will be one sad situation indeed when they run whining to congress for a bailout at taxpayer expense, or when the lawsuits pile so high hearing dates back up into the 22nd century-  *. that's just what they're asking for, and UNfairisaac will be long buried in the annals of american corporate bankruptcy once it becomes widely know that they are the ones who wrote this recipe for disaster-- cyanide cupcake delite-*. if a rental applicant has perfect references from previous tenancies and no history of delinquency on their outstanding credit accounts, i recommend approval without hesitation. in a more difficult scenario, asking for a security deposit and/or a co-signer on the lease is nearly always adequate. this does not guarantee that the tenant won't go into default or breach of contract-- i did have a sexual harrassment situation on one occasion, and obliged the tenant to sign an acknowledgement and required a co-signer, warning him out on your ass if it continues; fortunately, that was the end. rejecting an application outright is rare, and i have been renting apartments for many years with countless hundreds of applicants for equally many units. i usually drop my broker fee when renting my apartments; those working with me generally do not when renting theirs. my line of work requires me to review credit reports on a daily basis, and i grade A-F using my experience and objectivity-- C- or even D get conditional recommendations, and less than 2% of the tenants i, or anyone else in my department, suggest that an owner approve end up undergoing eviction ceremonies. if there is an inherent problem with the applicant, or the owner for that matter, it usually becomes apparent long before anybody sits at the table to execute legal documents. instability of any kind is difficult to conceal, especially when meeting other people face to face. yeah and behold, the world of real estate abounds with landlords i wouldn't wish on UN fair isaac himself, and i could tell stories to keep us up all night ROFLOAO, but i have other things to do. don't act like a machine if you are a landlord in massachusetts, shylock-- first time is $10,000-- it goes up from there, and you can see the inside of a jailhouse if you persist-- that's what would happen to FICO if it were used to reject tenants or attempt to adjust prices based upon a computer spit-out. just because the fed bought it doesn't mean we all have to, and i never will. i owe my livelihood to dealing with people, and treating them as i expect them to treat me. the fed is going to be mighty damn sorry it got blowjobbed into accepting this crap too; it's just a matter of when and how much. some people listen to money before allowing themselves to hear the truth, and that's how such idiocy initiates, propogates, and predominates-- greed talks, decency walks planks, and only when it goes to far does society take a serious look at what's going on, more often than not moments before it's too late. hitler?? cuban missile crisis?? how about facing that cacophony once called music the world's history is playing loudest, and doing something intelligent about it so we don't get blasted again in deafing refrain. block you ears all you want-- at 180-200db, sound concussion starts taking out capillaries in lungs and brain, and 230db is lethal within seconds. does the noise of suffering really have to get so loud in order for everyone to listen??? that's all. after talking with a human today, cendant approved my refinance request at 70%LTV, 7.625% with 3/4 of a point. maybe not the best rate out there, but at least i can say somebody still has their ears. i'll take if for sure when the loan closes--- FICO--- a unique program to bring hearing aids to the blind. federally funded. you got it--- bonne huit--- * douglas pratt
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| | Tuesday, February 27, 2001 - 04:43 pm Christine: I want to predict the potential tenant's profitability and liability from all sources. Douglas: There's nothing illegal about what I propose. Sure, there may be limits in your state about the amount of the security deposit that can be charged. I wasn't referring to a larger security deposit. I was referring to larger rent. That larger rent permits you to charge a larger last month's rent as well, doesn't it? It's easy to say that if the person has perfect references you just approve them. What if the person in question was evicted two years ago? Denial? What if everyone denies him? Where will he live?
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| | Tuesday, February 27, 2001 - 11:26 pm Christine: I want to predict the potential tenant's profitability and liability from all sources. all sources? As in what? A medical exam with gene analysis to predict default for medical reasons? A psychological exam and an evaluation of the stability of their relationship for couples? Drug tests? Evaluation of their driving records? You don't know WHAT makes someone a good tenant. You're looking for a crystal ball. Oh, it's the 8 Ball! If it can get people promoted I'm sure it can turn you into a successful PROFITABLE landlord
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| | Wednesday, February 28, 2001 - 03:22 pm I doubt anyone knows what makes someone a good tenant. Sure we can theorize that a person who has never been evicted and has a good job will make a good tenant, but you just never know. This is a good case for emperically derived scoring models. You put a few thousand tenants in one end and a year later you compare to see what you've learned and look for indications that one tenant is likely to stay long, vs. another that might leave quicker (and therefore cause vacancy) vs. another that may need to be evicted. I'm betting that a tenant that has a lot of inquiries is also likely to move more often, resulting in more vacancy and should be charged more to offset the cost.
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| | Wednesday, February 28, 2001 - 04:51 pm Of course you're right. People who shop and inquire are likely to move. (i.e. change, or progress.) Let's schedule our lobotomies so we can have a place to live. I refer back to my first posting.
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| | Wednesday, February 28, 2001 - 08:40 pm shylock, in my marketplace, the current vacancy rate is 0.4%. some of my apartments are 20-30% below market rent, because when a tenant is good to me, i find myself somewhat inclined to return the favor. in an academic community, turnover is fairly frequent, and it is at the time of someone going out that i do renovations and then rent the unit again for what the market will bear. a year down the road it's a bargain, and my usual policy is to increase rent $50 once every 2 years. never before [knock head] have i had an eviction. i am a cat lover, violently allergic to tobacco, so my personal preferences do show up-- no dogs, and if somebody smokes i turn green and hang my head out the window. there are 3 other apartments that get their heat off the same hot air system as the one i live in with my wife, so if somebody puffs on a cancerette, we all get it. anti-discrimination laws in massachusetts are the strictest in the country. if a landlord decides a tenant should pay more rent based upon a computer program, the state will want to know every little detail of what it is, how it works, and why such a landlord shouldn't be found guilty of arbitrary discrimination. plug in one factor such as race, religion [cooking habits notwithsanding!], tenant with kids, and judges lean very heavily toward an aggrieved party. add in punitive damages and your tenant might be owning the property if successful in court. needless to say, my apartments consist mainly of studios and 1 bedrooms, and i damn well do have deleading compliance for anything larger. legal implications aside, i consider deleading a necessary expenditure to be figured into purchase price of a new project-- i would never jeopardize the health or future of a child's life experience for sake of convenience or profit. i could give a flying Firetruck how many times a tenant's credit has been run, or by whom. if they have an eviction history, i take time to research the problem and listen to both sides of the story before making a decision. most quacks i encounter in this line of work are of the landlord variety, not incoming tenants. master's of asshology, with Ph.d (piled higher and deeper), specialty studies in schyts and pharz. enforced silence protocols, bizarre sexual inuendos, attendance at religious ceremonies [discrimination lawsuit] eating sheep heads (brains and all), landlord intrusion beyond that normally permitted by law, wiretapped phone lines, eavesdropping devices concealed throughout the apartment, blatant racism-- albeit rare, such owners get our database F3 (permakill,)-- if they come back for more, i don't hesitate to report it to the appropriate authorities. my wife has dark skin pigmentation which might place us into such a "minority" category, though it hasn't occurred to me that this may be a factor in credit scoring because the question is never asked on our loan applications. if i wanted to play dirty, it would be more than easy to throw this filth into their dish. it appears that unFair isaac took this into consideration when writing the quackware, and as far as i can tell it is upon this assumption that fannie mae and freddie mac bought into it and can thereby justify their endorsement of this lunacy as offering equitable treatment to one and all. let's take it back a few generations. people with dark skin pigmentation are now protected, but any and all firstborn children shall be sacrificed as burnt offerings unto the god Fucqokuack-- *** when the moon turns blue, roast baby girls. ducks fly, so they must be lighter than air. any parent whose baby girl is lighter than volumes of duck's airweight placed upon King Isaac's {un}Fair scale shall be spared. so let it be quackened, so let it be done-- * i'm not going to charge a tenant more rent that i ask for an apartment because of computer spit-up. burp the program, wipe the baby barf off, and lay it back down again. if it smells like a problem, looks like problem, makes loud problematic noises everywhere it goes, and everyone who knows of its past presences says it has always been a problem, chances are it's a problem. i don't want any more problems than i already have, and neither do the clients who place trust in me to me to keep their lives running smoothely- at $300 an hour or more, i pay dearly if i screw up, and i admit this does happen; once a month is far too much, and in this real world twice puts my ass on the griddle- i'll auction the meat on ebay if i ever lose it-- ** substandard rental applicants rarely get through the screening process without revealing the fact. when it comes to real estate loans, there remains one very important difference-- a borrower offers the property to the lender as collatoral SECURING a loan, whether or not they live there. land and buildings DO NOT get up and walk away from a bad situation, even if a borrower chooses to do so. a tenant has no vested interest in property rented from someone else; an owner always does, and when that owner defaults or packs up and leaves, they stand to lose everything invested-- down payment, closing cost, equity, improvements, appreciation, amortization, left with nothing or even liability following a sale at forecolsure. with hundreds of thousands of dollars equity and loan to value ratios between 65% and 75%, i have never asked for preferential consideration when seeking to refinace my properties. my (with wife) credit profile will show no late payments at all, not even one single 30-day in over 15 years. now we are B/C borrowers, similar to recent bankrupt, based upon a numerical FUCkO shitout. guess what? FICO SCORING ENCOURAGES BANKRUPTCY and penalizes software timeout, and a couple hours work lost-- here is what i posted so far, too tired to write it all over--- i'm with you all the way-- **- see what you can do to keep data from disappearing thanks-- * will continue== douglas pratt-- FICO fuckee-- *
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| | Thursday, March 01, 2001 - 03:38 pm If your rents are really 20-30% below market and you don't do everything in your power to raise them then you're the quack.
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| | Thursday, March 01, 2001 - 05:24 pm Why?
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| | Thursday, March 01, 2001 - 05:36 pm Just because Doug gives a fair deal to loyal residents does not make him a quack. He just said that he charges the going rate the first year, but if they are good tenants he doesn't raise the rent for a couple of years. I think that's a pretty smart business decision, since he'd lose much more money if he had tenants moving out all the time. Shylock - you're the one who implied that "risky" tenants should pay a higer rent. So, that means that "established" or "non-risky" tenants pay less rent. Isn't that exactly what Doug is doing? Not raising the rent to a higher amount for his established tenants? Yet, you call him a quack. Doug - I wish you owned rental property in Florida. I'd give my business to you as a londlord over Shylock any day. And guess what, Shylock? My yearly salary nears 6 figures, my job is VERY stable and I ALWAYS pay my rent on time. I'm a great tenant, never complain, never make noise. However, several years ago when I was in college I was late with my rent a few times due to delays in my financial aid. Your "computer calculated" score would probably consider me a risk and make you want to charge me outrageous rent. Guess what? I'd laugh in your face and rent from Doug instead. Your *idea* just gives you an excuse to take advantage of people who have made mistakes in the past. How about Joe Shmoe with a clean credit/rental history who has his girlfriend move in, then gets violent with her and destroys the place one night in a drunken rage? Was your computer able to predict that? No. And don't say that someone with clean credit isn't likely to do something like that - it happens in all kinds of families.
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| | Thursday, March 01, 2001 - 05:47 pm care to try evicting a tenant in massachusetts because they're not paying their rent, shylock? you're thinking like a machine. my lawyers charge $120-$300 an hour, depending on which one i need and how serious the legal event may be. unhappy tenants tend to become problem tenants, and when a tenant moves, i increase rent to market rates. with prices going up 10%-25% per year, my tenants get bargains when they renew their lease, even if i give my usual $50 increase every two years. fico doesn't know anything about that either. it knows only what it has been told to know. i hope you don't think this way when you're with that special someone in your life, shylock. FICO doesn't yet have divorce programs, at least as far as i know. make love by numbers????-- *
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| | Thursday, March 01, 2001 - 07:03 pm Ok, it's time for a link. New Scoring Possibility (Sean's Dating Score!) I often think Shylock (Sean) is really on "our" side. He certainly creates a lot of awareness of what's in store for us if we don't pay attention. While there isn't a "Dating Score" yet, there are numerous lawyers specializing in checking out dates. Not the dates on accounting statements, but the dates you have dinner with. And yes, they'll run your credit. Dating is now a legitimate reason to have your credit files reviewed, WITHOUT your permission. I haven't seen an FTC opinion on it, but the lawyers seem to think that when you meet some person in a chat room you need to run their credit before you meet them in person because it could reveal: "serial killer"
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| | Friday, March 02, 2001 - 03:30 pm Ok, I’m going to address a lot of issues here very quickly and very briefly. This isn’t a property management course – we’re talking about scoring. On the other hand a lot of issues have been raised that I’d like to address. Here goes. Douglas has a vacancy rate of 0.4% and his rents are 20% below market. Let’s say I buy the place next door and charge market rents but have 10% vacancy. Who is making more money? Income producing properties are appraised not based on comparable sales but based on market capitalization. If a person looks at a property that produces $100,000 net operating income (NOI) and he wants to make 12% return on his money he’s going to pay $833,000 for the place. Let’s generalize this to say that a person is willing to pay 8.33 times the NOI. If my NOI is 13% more that means my property is worth 13% more. Let’s say we both owe $600,000 on the property. His property has an LTV of 72% but mine, worth 13% more, would have an LTV of 63.7. Which property is going to be easier to refinance? Not to mention that the extra money could be reducing your revolving debt and improving your score. As for waiting two years to raise rent that’s a poor idea. The best idea is to get the rent raise up front. How? Offer the 13th month free with a 12-month lease. The problem tenants won’t get the free 13th month because you’ll have them evicted by then so you gain a little on them. Experience will tell you that many people will be willing to pay 5-8% above market rent for the 13th month free. That being the case at the end of the year you’ve already got your 5-8% rent raise built right in. You can even LOWER their rent at the end of 12 months, look like a hero, and still be raking in the cash far better than Doug’s $50 every 2 years method. Regarding dating scores and credit reports, I’m way ahead of you. The FTC has indicated that credit reports can be pulled for any valid business reason and they don’t consider dating to be a business reason (damn them to hell). Anyway, I’m not on ‘your side’ it’s just that I’m so far away from your side it scares you and invigorates you just like NRA membership swells every time they pass more anti-gun legislation. Charging high-risk tenants more isn’t cruel. What is cruel is turning them down so they have nowhere to go at all. The way I fill my vacancies is clever marketing. I take my unit with a market rent of $600 and I advertise it for $525 a month. Suddenly my phone is ringing off the hook. I tell everyone that I’ll be available to show the unit on Saturday at 10:30AM. Let’s say I get 20 calls. Considering that tenants are notorious flakes, I’ll probably only get 8-10 in attendance. I show them all the unit, explain its features all at once (a great timesaver) and then I lay the bad news on them. Obviously with 8 people there and only one unit 7 people are going to be disappointed. I give them all little cards and say, “If you’re interested in the unit write down your name and phone number and the amount of rent you’d be willing to pay.” I have already explained to them the 13th month free system, so they’re factoring that in. I usually get 5 cards. The problem is that you run the credit on the guy that’s offered the most and chances are good he’s got lousy credit and he was offering extra to ‘sweeten the deal’ for the landlord. Now you’re not sure what to do and THAT’S where a rental scoring system would come in and do wonders.
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| | Friday, March 02, 2001 - 03:56 pm What factors do you WANT in your rental scoring system?
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| | Friday, March 02, 2001 - 04:11 pm From one renter's perspective: My rent just went up a couple months ago. From $625 to $644! A whole $19! This is the thanks I get for 3 1/2 years of on-time rent payments! I gave them my 30 days notice a couple days ago. Actually that isn't really the reason I'm moving, but from my perspective if I've been living there for awhile then the landlord has been making good money just because he doesn't have to fix the place up, advertise, and all the other costs that go into filling a vacancy. Plus all these new tenants in the building are always moving into freshly painted and new carpeted apartments while my stuff is all 3 1/2 years old. My apartment has depreciated in value as far as I'm concerned. As far as this whole scoring idea goes I don't like it for the same reasons I don't like credit scoring: it's impossible maintain a report with completely accurate data (credit, financial, whatever rent relating) on the entire population and the formula (even if it were open source) would almost certainly penalize people who live their lives a bit different than the norm. If you could solve those two problems then maybe I could support such a system.
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| | Saturday, March 03, 2001 - 07:02 am What factors to include in a rental scoring system? Well, public records is the biggest thing -- an eviction in the past would be a major negative factor. Derogatory credit information and excessive debt would also be negative. Recent inquiries, length of credit history, etc. As for Erik, where I'm at property tax goes up 2% a year. That means after 3 years your landlord's had 6% increase on his taxes. He raised your rent a pitiful 3% after 3.5 years -- that's less than 1% a year, but you're all incensed about it? Give me a break. I'll bet that wherever you move you'll be paying the same or more.
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| | Saturday, March 03, 2001 - 09:58 am Shylock wrote: What factors to include in a rental scoring system? Well, public records is the biggest thing -- an eviction in the past would be a major negative factor. Derogatory credit information and excessive debt would also be negative. Recent inquiries, length of credit history, etc. Are you telling me you can't read the credit report yourself? Don't you think you can do better than some score by evaluating a tenant with the RENT application AND the credit AND the IN PERSON INTERVIEW I know ** I ** can.
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| | Saturday, March 03, 2001 - 09:58 am I was being sarcastic about being completely outraged about the $19 increase. But still I think when any renter gets that notice that he's getting a rent increase (of any size) the first thought is 'Dammit, I should move!'. Even though it may be irrational I think that is a very natural emotional response. Actually when I figured out it was only $19 I laughed and thought it was very small and reasonable. But at the same time I had been thinking about moving anyway for some time and it was just one more reason to do so. Just something for you landlords to consider. BTW, I'll probably be paying more because I'm planning to move into a better neighborhood and into a better apartment which are the main reasons I'm moving. But whereever I move at least I'll have new carpets and new paint. I was actually defending your marketing strategy with regards to overcharging at the start and not increasing the rent. I wonder what the rate is for tenants moving out within 12 months of a rent increase vs. tenants with the same time renting without a rent increase.
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| | Saturday, March 03, 2001 - 07:53 pm Can you, Christine? Ok here's a simple test. You have two people in front of you applying for a unit you have available for rent. Neither of them have derogatory credit information, nor public records. One of them currently owes 70% of their revolving account limits and the other owes 30 percent. The one that owes 70% also has three inquiries in the past year and one new account opened in the past 6 months, which is already at 80% of maximum. The other has no inquiries in the past 24 months and no new accounts in the past 5 years. They both have stable jobs that they've been at for two years. They both seem conscientious, nice and quiet. Their current landlords give both of them fine marks for paying on time. How much more would the high-debt-load person have to pay than the low-debt-load person to make it worth our while? ************************************************* Sorry that I didn't catch the sarcasm, but you know I hear all kinds of things on this forum that sound absolutely stark-raving loony to me and the people honestly mean it! I assumed this was more of the same. Obviously the psychological factor of a rent raise is disconcerting and the larger the rent raise is the more likely the person is to move. That's why giving someone a rate pass on rent is crazy -- it just increases the size of the rent raise you're eventually going to have to hit them with. I can't imagine a tenant moving out over a $10 rent raise that wouldn't have moved out anyway.
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| | Saturday, March 03, 2001 - 10:25 pm Shylock, of course I can. As mortgage broker I had to sign a contract with every wholesaler. Each contract contained a "buy back" clause. Had one of my loans gone bad, under certain conditions I would have had to buy back the loan, send a check for the amount of the loan to the wholesaler. I operated as a sole proprietor, and everything I owned was on the line. It would have NEVER occurred to me to take a score into consideration. I specialized in working with first-time buyers and minorities, i.e. low scorers. I'm not aware of a single late payment by any of my clients. I told everybody to contact me immediately should they have any payment problems, and that includes my real estate clients prior to the mortgage biz. There were a few prospective borrowers and buyers I declined to work with, NOT because of their score, but based on my conversations with them. Your example has NOTHING to do with scoring. How could a score evaluate MY financial risk? I'd have to consider the condition of the place, how much damage could be done? How long does it take to evict someone? How much does the eviction cost? What IS my risk? Am I renting a high end house or a low end apartment? What's the rent? I don't believe in fleecing people. By charging a higher rent to the high risk tenant I would obviously INCREASE the likelihood of an eviction. If I felt that the high risk person can AFFORD the payments (after the interview I'd know) and it wasn't a luxury place, and I LIKE that person, I'd take that risk. I don't think non payment is such a big risk. There are the late payment fees, and 2 months deposit (the max in Cal.) How big a risk is that? So I'd rent at market with some incentives for timely payments. There's nothing like happy tenants that don't cause problems and don't waste my time. My rental experiences were mostly with roommates and renting houses. I learned that the best qualified tenants sometimes were a pain in the ass. After all, they could live ANYWHERE with their perfect credit and high disposable income. I rather gave someone a break and then they wouldn't bug me all the time and take care of the place. I never got into apartment rentals, it's just not my thing. For years I shared my office with a broker who had a low end apartment complex. The problems he had, just unbelievable. He was CONSTANTLY dealing with repairs and leaky roofs, HIRING a manager (once he had a manager who turned out to be a convicted sex offender,) attending neighborhood meetings, ... one problem after the other! Of course he had evictions too, but they weren't that big a problem. Except when once his lawyer didn't show up, he subsequently lost the case. Then he sued the lawyer in Small Claims, and LOST again! I have NO idea how you expect some score to do YOUR thinking. Of course you got to have experience too. Einstein probably would not have done well as an apartment manager. You don't even seem to understand that the only reason ANYONE uses credit scores is because it's so much FASTER than manual underwriting AND they can overcharge the low scorers. SPEED is the ONLY benefit of scoring. I don't understand why you don't understand that. And if you don't like dealing with unpredictable people, why do you want to rent property? Why not do some day trading instead?
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| | Saturday, March 03, 2001 - 11:21 pm in a marketplace where average rents went up 20% last year, a $19 increase is a laugh. if a tenant who went in at $1200 in 1999 moves out this year because i bump them up to $1250, i wish them well and get $1600 for the unit with hours during high season {may-sept}, or $1500 within a week at any other time of year. first-come first-serve is strict policy here. if an applicant is viable, in they go. if there are problems, i clear the air as quickly as possible, and then in they go. a numerical quack-off from a computer model isn't my idea of a problem. having no source of income, lots of bad references, or a criminal record is my idea of a problem. DUI from 1976 or writing two bumm checks totalling $85 in august 1985 isn't a problem-- aggravated rape and posession of four kilos of cocaine with intent to distribute is a problem. student with xillionaire for a daddy isn't a problem, so long as he signs on as a guarantor. a minimum wage worker who says $2200 a month is easy to pay and can't say how he plans to make the payments isn't easy to trust. a fairy godmother in washington state goes through the same screening process as does a twinklie-ass godchild, and both get the big raspberry spittle if they don't qualify. once an application comes in on any apartment, we stop showing and put it on a pending status until the applicant is either approved or rejected. on occasion, two or more applications may appear at the same time, and are then presented together. in virtually all cases, one applicant inevitably backs out, or has needs and expectations that put them at marked advantage or disadvantage over the other, such as animals, lease term requirements, parking, smoking, children, public transportation and highway access, furniture, school districts, amenities, type of dwelling [building vs house], character [modern, old-fashioned], special needs and desires [mobility impairments, "has to have a fireplace," "no main drags," etc., and infinitum et ad pukium-- **- landlords and tenants usually become aware of these things long before anybody is forced into making decisions, and if they have any sense of dignity and respect for others, they tend to act accordingly. one small problem with computer modeling: UN fair isaac forgot to program respect and dignity, or perhaps they don't know how to do it. how about special requirements or preferences of tenants or landlords?? local markets, where demand and price can vary tremendously from one block to the next? how about a long street where one end is paradise and the other end is a war zone? an applicant who gets a rent hike on one side of the street could very well get a discount on the other, depending upon what the computer is told to see and how to score it. redlining/blockbusting?- this gets your license suspended in massachusetts, with a stiff fine to boot in many cases. neighborhood safety?, go ask the cops if you want to know, because this is also a subjective evaluation, and a broker can get into trouble making representations there as well. has FICO biased the way their models score a neighborhood, or any class of borrower, due to the property location?? nobody knows, because the fed agrees with the quacks that every applicant for real estate financing is treated fairly, and knowing how a numerical score is generated by the programs is irrelevant. if actually true, it goes without saying that all consumers should receive exemplary scores so long as accounts are kept in good standing and payments are made as agreed. given my true credit history, cases where UN fair isaac's models give numerical scores as low as mine may be rare-- in a conversation with our in-house mortgage analyst we debated between A or A- for a grade, while FICO buttfucks me with C-/D+. the only issue between A and A- was the amount of outstanding consumer debt, all of which vanishes instantly once i refinance my house or investment property. corresponding to my actual numerical score, i can run the scenario backward to simulate my image of an applicant similar to how UN fair isaac judges me as of feb. 26, 2001: bankruptcy-- discharge, chapter 13 within past 12 months, or chapter 7 within past 24 months. charge-offs, numerical average 6-10 accounts, all past due at least 150 days prior to filing. foreclosure, uncommon repossesions, one likely, but not necessarily delinquent payment history, extensive, most or all accounts running from current to 120+ days; multiple lates going back over 2 years. credit accounts carried through bankruptcy current. many show closed at credit grantors' request utilities, one or more usually in collection, though not necessarily registry, this is where most collection accounts end up, along with tax liens, civil judgements, unpaid medical bills, and utility accounts. C/D usually shows one or two entries, sometimes none, sometimes several. most will show settled or in a settlment status if an applicant has made efforts to resolve it. comparing this to me and my wife is easy, unless you're a computer UNfortunate enough to have been fed UNfair isaac's quackware: no late payments on any accounts at any time-- home owners, with over $1,000,000 in real estate holdings-- outstanding debt under 10% of collatoral value. you have 2 people standing in front of you asking for a mortgage. one is the C/D applicant, and the other is me and my wife. you, the lender, have 2 computer generated numbers. which borrower do you loan $440,000 to? given the choice, shylock, wouldn't you want to know a bit more about each applicant, or do you trust the machine? yes, you do trust machines. if fUCKo ever succeed in driving me into bankruptcy, you're the first person i'll contact of finance my recovery, and given the way UNfair isaac looks at the world, i bet you'll consider me a better risk at that time than i am today. go make your fortune now with computer modeling behind you all the way--- ** goodnight again-- douglas pratt
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| | Sunday, March 04, 2001 - 05:22 am Christine: So your response is simply to rent to no one unless they have perfect A+ credit then? Scoring's advantage is not that it's FASTER than traditional underwriting. It's both BETTER and CHEAPER. Douglas: Would I rather lend money to you or a C/D borrower? It wouldn't matter. You're both C/D borrowers.
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| | Sunday, March 04, 2001 - 11:00 am Shylock, I previously posted: "I don't believe in fleecing people. By charging a higher rent to the high risk tenant I would obviously INCREASE the likelihood of an eviction. If I felt that the high risk person can AFFORD the payments (after the interview I'd know) and it wasn't a luxury place, and I LIKE that person, I'd take that risk. I don't think non payment is such a big risk. There are the late payment fees, and 2 months deposit (the max in Cal.) How big a risk is that? So I'd rent at market with some incentives for timely payments. There's nothing like happy tenants that don't cause problems and don't waste my time. My rental experiences were mostly with roommates and renting houses. I learned that the best qualified tenants sometimes were a pain in the ass. After all, they could live ANYWHERE with their perfect credit and high disposable income. I rather gave someone a break and then they wouldn't bug me all the time and take care of the place." You wrote: You're both C/D borrowers. I'm not sure what you mean.
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| | Sunday, March 04, 2001 - 11:35 am Shylock wrote: Scoring's advantage is not that it's FASTER than traditional underwriting. It's both BETTER and CHEAPER. Had I relied on credit scoring, I probably would have gotten one of those "buy back" demands. How is that cheaper? And, how is it better when none of my clients had any defaults? Many would have had scores in the 500 range. I KNOW that scoring is wrong.
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| | Sunday, March 04, 2001 - 06:08 pm Shylock wrote: "You have two people in front of you applying for a unit you have available for rent. Neither of them have derogatory credit information, nor public records. One of them currently owes 70% of their revolving account limits and the other owes 30 percent. The one that owes 70% also has three inquiries in the past year and one new account opened in the past 6 months, which is already at 80% of maximum. The other has no inquiries in the past 24 months and no new accounts in the past 5 years." They both have stable jobs that they've been at for two years. They both seem conscientious, nice and quiet. Their current landlords give both of them fine marks for paying on time. How much more would the high-debt-load person have to pay than the low-debt-load person to make it worth our while?" You really think some score can predict which of those applicants is more likely to not pay the rent? They both appear to be a good risk. Are you saying you'd charge a higher rent to the person who owes 70% on his credit cards? Ok, let's take it a step further. This is what the score DIDN'T tell you: All you might know from the score is that guy number one has a high balance to limit ratio. What the score doesn't tell you is that he chose to never apply or accept cards with high limits because he doesn't need it and doesn't want to fall into large debt. Thus, he only had one card with a $2000 limit that he rarely used. Until recently it had 0 balance. Possibly his father passed away the previous month and he had to purchase a $1500 plane ticket at the last minute. As for the new account at 80%, he opened it a few months earlier when his father first became ill because they offered 2% APR for 6 months and he thought it would be nice to have for a plane ticket. He decided to carry the balances on both cards for a few months since his cards both offer 2% APR, while the cash sits in his investment account earning 8%. As for the 3 inquiries, one was for the new card mentioned above, one was completely unauthorized, and the third was from another rental property he's considering (and will probably take when he finds out you'd jack up the rent over some *score*). Oh, and he also has $10000 in his savings account. Just because someone doesn't have several credit cards with high limits doesn't have to mean that they couldn't have them. Some people chose NOT to have them. As for the second guy who *only* owes 30%, his total limits equal $50K with an average APR of 7%. That means he owes $15K on his credit cards. He has no savings account. The *calculator* doesn't factor in this information to compute the score. After meeting with both applicants and learning all this information, I'd consider the second guy the higher risk. But, in your model the score has labeled guy number one the higher risk. Does that seem fair?
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| | Sunday, March 04, 2001 - 11:53 pm saying we're both c/d borrowers, shylock means that he wouldn't make a loan to either me or the hypotheical c/d borrower i outlinded in my post. hoping you never get hurt in a car accident, this link is for you, shylock-- http://www.insure.com/auto/collision/colossus.html i was A borrower until FICO came along and branded me C/D. my lenders are surprised and highly annoyed that they can't underwrite loans for me anymore. it should come as no surprised to anyone when the rate of default on FICO approved mortgages starts to sky-rocket, especially in a softening economy. credit scoring is a new and interesting idea, and when computers have all the faculties of human minds, it might actually work. we are about to have a massive blizzard here in boston-- last night they said 6-10 inchers, this morning it was a foot or more, and now it's 2-3 feet predicted over the next few days. the weather man said that computer models are being used extensively for these forecasts, and this is one application where it can be of great help, as imprecise as it actually still is. check out how fractal geometry works- it's much like a software kaleidoscpe, with the path of each variable going forward in time based upon their interaction with other variables in the equation-- the more things the model has to contend with, the more complex the equations used to manage the data become, and this phenomena increases exponentially with the number and types of variables, what their action upon each other is, with time itself perhaps the most unpredictable element of all. take a child's kaleidoscope, put it up to your eye, and turn the wheel. the pretty paterns you see are created by beads of glass & plastic rolling over one another as the scope is rotated, and given symmetry using mirrors to duplicate the portion of view visible through the eyepiece at any given moment. not all of the beads will appear at every sampling, and what is seen this second is determined by how the instrument is held, the way the user turns the chamber containing the beads, and random outcome. to give an example of how quickly such a simple model can easily overwhelm a supercomputer within a very short period of time, assume 100 beads in the tube, which is rotated once per second. a child holding a kaleidoscope is unlikely to be maintaining precise control; the tube may tilt or shake, and be held at difference angles. thereby, the positions of the beads, if this were to be sampled at one second intervals, will be random. over the course of many samplings, patterns may be seen, with the object of the problem being to predict what the next sample will look like based upon information contained in the previous ones. gravity and the user's motion will generate an outcome which is largely random- a computer model will have to take all the information it has, and convert it into mathematical terms, and apply an algorithm taking into account the variables such as forces acting upon the tube, the beads, fluid motion as they tumble over one another, and even the way the user handles the scope may help give a better evaluation of a probable outcome of the image produced by the next rotation. all possible results of how the beads will come to rest must be considered, and this will be based extensively upon how they sat following the last rotation. of course, color combinations that could never show as a result based upon specifics of the beads in the tube can de eliminated de facto. each bead's individual characteristics [such as size, weight, composition, specific gravity, reflective and/or refractive indices, transparency, hue, shape, and any anomolies] must be programmed into the model; the more information provided, the more accurate the computer's outcome is likely to be. fractal geometry applies in the formation of ice crystals such as snowflakes, and it is well known that no two snowflakes are exactly alike. it is equally well known that no to people are exactly alike, even indentical twins {they can get pretty close, but only the genome is virtually 100%}-- DNA does make errors when replicating. the computer models hard at work monitoring this incoming boston blizzard have a fairly lame rate of real precision. we know it's going to snow, we have a rather broad range of how much is going to come down where-- as the actual event approaches, the time variable is decreasing as the number of samplings available for analysis are increasing, so the forecast becomes more accurate as the storm is bearing down. 24 hours seems to be the outside limit where statistic show that computer modeling is any more accurate in meteorology than the proverbial penny [sunny side/rainy side]-- in the past, many forecasters have obtained better overall results resorting to much less scientific methods, such as filling jars with oil and water, brine, vinegar, etc. and floating eggs in various stages of incubation (or cooking), or by watching the sleeping patterns, grazing habits, and other subtle behaviors of cows and goats. before FICO came along, i never had difficulty in getting loans. the fed claims it is a guideline-- i have written proof from several lenders that it is the absolute decision maker, in my situation. the intention may have been to eliminate possible discrimination-- if ethnicity of neither borrower nor geographic areas are part of the model, that solves one issue- [but then again, nobody knows]. has it treated me fairly?? i believe not- shylock obviously believes it has. to make a long story short, the fact is that computer technology has a long way to go before it can predict whether or not a borrower will perform on a loan obligation. 15 years of flawless payment history doesn't seem to cut it, and i have a fair amount of consumer debt outstanding only because the FICO system won't allow me to access the equity in properties i already own-- this fundamental aspect of the real estate and development industry was left out of the software. i finished my last project at the end of 1999, and since then have done nothing but pour a large part of my income into the ever- increasing debt service as locks on low interest rate mortgages and credit cards expire and i pay more and more every month; in january alone came the end of the 3rd year on the libor note on my primary redidence, and that alone is costing me an additional $500+ in bank interest. excluded from conventional loans by FICO, the alternative is B/C portfolio lenders, whose rates are similar or even higher that what i presently have. credit scoring is a failure, just as communism is a failure--- take a look at russia's economy and then tell us that any system that thinks like a machine, treats people like machines, and expects people to act like machines, can be imposed from above by power(ful idiot)s that be on high. learn a lesson from history and watch WARGAMES shylock- i think you just might learn something-- if you don't have access to it let me know and i'll send you a vhs copy or dvd. up all night again, and the snow is falling-- i really, really hate snow-- * i hate FICO scoring worse than i hate snow-- * goodnight everybody-- **
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| | Monday, March 05, 2001 - 05:14 am Doug, do you ever listen to what you post before you post it? First you say how complicated the weather is including hundreds or perhaps even thousands of different variables -- more than a person could ever hope to consider at the same time. Then you use this as an argument for why computers shouldn't get involved in keeping track of all these variables? And what does any of this have to do with credit or mortgages? Nothing. Then you get into sophistry about communism and how it's like FICO scores. FICO scores predict the delinquency rates of groups of people. Communism kills groups of people and doesn't predict anything. The two have nothing to do with each other. Here in the United States we have a capitalist society where consumers make all the decisions. Consumers have consistently 'voted with their dollars' for FICO scores because they generate lower prices to lending institutions, which savings is passed on to consumers in the form of lower lending costs. You say that before you were an "A" borrower. What you mean to say is that you were mistakenly considered to be an A borrower, but now you are known to be a C/D borrower. Truth hurts, doesn't it? Of course you could probably get a loan with the scores that you have if you documented your income. Since you're not willing to do that, what do you expect? I have seen Wargames and it's completely implausible that the nuclear defense system of the United States could be accessed by a modem, that the software engineer that created the system would leave a backdoor, that the backdoor password would be his son's name, that none of the follow-up coders would discover this backdoor, that a kid would discover it first (instead of the KGB) ... and on and on. Again none of this has anything to do with FICO scores. As a final word you keep going on and on about your 15 years of timely payment history. You don't have 15 years of timely payment history you have SEVEN. That's the amount of time that payment history can be legally kept on your credit profile.
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| | Monday, March 05, 2001 - 09:17 am Shylock wrote "Communism kills groups of people and doesn't predict anything." Credit scoring kills people's credit rating based on the actions of a completely UNRELATED GROUP (people you don't even know) and doesn't predict anything. Didn't your score just go down because you had a few inquiries? Now you're a C/D borrower?
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| | Monday, March 05, 2001 - 09:52 am computer models are very useful tools for weather forecasting, albeit inaccurate. based upon last night's forecast, massachusetts declared a state of emergency, and everything is shut down. it's now after 2pm, and we have one inch of wet snow on the ground-- more is coming tonight and tomorrow, with the totals revised again from 20-30 inches in boston to 6-12 when the whole thing winds down. what do you think it has cost for the state to shut down-- banks, stores, offices, all forms of business are on hold for a computer modeled nightmare that has turned out to be one inch of wet snow. i don't say that models should not be used in weather forecasting-- quite to the contrary, this is far from an exact science, and anything that can be done to improve it is welcome here. predicting human behavior is a much less exact science; in fact, it's quite impossible in the way FICO is attempting to do it. i have always used no-income verification loans because owning property and being self employed generate a great deal of tax write-off. the alternative is not to take deductions to which i am legally entitled and pay tens of thousands in unnecessary income taxes. nothing about my credit profile has changed in many years. FICO spits out a number indicative of financial problems and irresponsible management of money, a situation which plain and simple does not exist. when an underwriter looks at my loans, they say i am very strong, and shouldn't have any trouble getting competitive rate mortgages. FICO spits out a number that means automatic rejection of my application, and referral to B/C portfolio lenders. at no time are individual circumstances evaluated and considered by a banker or mortgage underwriter. i don't fit the mold, so i am trash. that's it. hitler did likewise with the disabled. i cite weather forecasts to point out inaccuracy inherent in computer models, and the kaleidoscope analogy is to give an idea of how complex the job actually is, even with something far simpler than atmospheric behavior and human beings. communism did kill alot of people and accomplish a whole lot of nothing when it tried to make an ant farm out of a society. i get low numerical scores from the FICO models because i'm not your typical type of borrower ant. the scenario in WARGAMES could never play out, as the military would never be stupid enough to turn command of a nuclear arsenal over to a computer-- it illustrates how far out of hand things can get when the human element is taken out of real life, and thinking is delegated to a machine so people don't have to. automated underwriting is fast and convenient, and it is for this reason that it has been so widely embraced by the lending industry. this has gotten to the point where an underwriter doesn't even look at a borrower profile like mine because the FICO scores are ABSOLUTE with fannie mae and freddie mac in my particular situation. i'm sure more people are treated fairly by this system than not-- my case shows that no computer model can treat everybody fairly, and that there should be a human alternative available to the borrower when it fails. it wouldn't be hard, but it could become very expensive, for me to prove this in court, especially with support from human lenders with whom i have long standing rapport who feel that the system as it is penalizes me in a most unfair and arbitrary fashion. the fed has bought into credit scoring, and could easily buy out if cases such as mine are brought into public view. that's what i have to do. FICO is seriously flawed, and should be used how it was designed to be used-- as a guideline. today it has replaced a vast majority of the professionals banker and underwriters, PEOPLE who are most qualified to be making FINAL decisions on who gets credit and who doesn't. as it stands, i'm packed off to the back of the bus, and discrimination is just as bad if a computer is told to do it as it is when a bigot does it-- and if it's arbitrary and baseless, the "reason" is really no more than an excuse. FICO sucks-- *
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| | Monday, March 05, 2001 - 04:50 pm All these lenders love to stand around and say what a great credit risk you are ... they're just not willing to put their money where their mouth is and loan you any of their money, eh?
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| | Monday, March 05, 2001 - 05:05 pm Shylock, you didn't answer my question: "Didn't your score just go down because you had a few inquiries? Now you're a C/D borrower?" Am I confusing you with another reader or was that you?
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| | Monday, March 05, 2001 - 08:56 pm they have in the past, but can't now BECAUSE of the numerical spitout from FICO. wells fargo has put this in writing to me. bear in mind that no one ever looks at my credit profile, equity, or gets to know anything about my real life history as a borrower and as a mortgage applicant. they see only my name, social security number, and a group of 3 digit numbers representing me and my wife's credit scores from equifax, experian, and transunion. approval or rejection are automatic, and no one is allowed to approve the application once the computer has scored and denied it. we got another 2 inches of wet snow today, along with some rain and freezing drizzle; 10pm and the white shit is falling out of the sky moderately, not heavily-- still under 5 inches total. i drove home from my office tonight just after 8pm and it was a bit sloppy. the decision to close down the state was a human call (governor), but was based largely upon models that yesterday predicted 18"+ by now, and totals up to 40 inches in the area by whensday morning. maybe we will get 40 inches by then-- meanwhile, the state is paying for workers to enjoy a day off, and passing the same along to thousands of offices and businesses who followed suit. i worked a half day with no staff-- if the weather is too severe to go in, i stay home. again, i cite this example not to protest the use of computer models in weather forecasting-- it is only to point out how imprecise this technology still is. accurate predictions of sun, rain, snow and wind could save countless millions, and in medical science it can even save lives. the more linear the data a computer has to work with, the easier it is to calculate a precise result- it is non-linear models that still has computer science wetting diapers, while linear models using purely exponential data are nearing perfection. take chess for example-- the game is an excellent representation of linear modeling from computers' standpoints, and for human players is a wonderful exercise in foresight, psychology, and strategy. i am not a very good player at all, though i have won an occasional tournament not by my own skill, but by an opponent's error. in this world of real human beings, i find that the game of chess is rarely won by superior knowledge or proficiency-- it is gifted to one's opponent, yellow ribbon and sentimental card, cake and candles optional, via blunder-- victory and defeat simply indicate who made the first mistake. while the greatest chess players often prevail by unique tactical approach and strategy, aspiration to world class is easily attainable by anyone able to completely eliminate fatal errors from their modality of play. this is where computers hold a distinct advantage, as the number of possible moves and outcomes to the game are indeed finite, albeit rather astronomical. a move in chess represents a sampling of data-- at any point during the game, players have a finite number of options-- no variable changes until the opposing player in turn makes a move, so on until the game ends in victory for one, or a draw. the fact that a game of chess can conclude without a victor or loser presents a realm of consideration in itself-- if both sides have played perfectly, this should be the normal outcome. some experts acknowledge a slight advantage to White, as this player to make the first move. IBM's deep thought is a remarkable testament to what computer models can actually do within the limits of present day development; the finest players in the world are sometimes victorious and sometimes defeated- bear in mind, shylock, that chess is linearly variable in possible outcome, and its sampling rate rarely exceeds 200 events [100 moves on each side]-- now look at the role this wonderous game has enjoyed over the centuries in history, tradition, culture and mystique. i'm really not up to more examples from what i know, and as a simple harvard BA, i'm sure somebody representing UN fair isaac can tell it all better than i can-- Jesus Fucking H Christ and God forgive me, these quacks are Ph.D. out of MIT-- **- how much snow do you want, and where does it go???? no hard alma mater feelings-- we are not opponents here, so i'm just moving one pawn. calling checki-pooh on you is better placed at the feet of king shithouse FICOfucK, who snows on my life until i suffocate. the approach i have taken to build prosperity and long term security seems to have stumbled afoul of how credit models now control the industry where i live and thrive- care to sample my flatulence, shylock?- * that's why none of my properties have roaches-- the only exterminator bills i have are for ants and mice. catch-22: have you seen this film, shylock? FICO doesn't recognize perfect repayment or consider how much equity an applicant has in the property they seek to refinance. most of my net worth has gone into real estate i own, and consumer debt i owe has gone into renovation of these properties. when i finished my last project christmas, 1999, it appraised at $740,000-- mortgage was $453,000. 80% LTV industry standard for a no-doc loan means $592,000. another one across town has $440,000 in loan and appraised for $654,000. that's half a M equity in real estate alone, not to mention stock and securities, and art rarely mentioned [i have been privately interviewed by NBC news], and say no more. proverbial references from this film bear witness to college graduates' frustrations, asking why so many young people had to go die fighting somebody else's war, or face prison/flight from the USA as an alternative. damned if you do, damned if you don't-- that is the choice. when in doubt, run an indignant black bickup down the board five black squares, and a call proud "checki-poo on you" to that fat monarch sitting on his decrepit throne, and make your presence known. even when you lose, every game in life was well worth playing, so long as you haven't decided to walk away from defeat with absolutely nothing-- ** bonne nuit and i'm falling asleep. snow and FICO both suck--- **
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| | Monday, March 05, 2001 - 09:37 pm I'm wondering if the BayHouse site is still available at libraries and in schools.
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| | Monday, March 05, 2001 - 11:03 pm it is--- *** check out an average day's pornospam on AOL if a few bad words might be of concern-- keep on pluggin' sweet christine--- *****
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| | Tuesday, March 06, 2001 - 04:18 am Just an unrelated remark... Shylock, Don't be so quick to dismiss back doors. It is so easy it isn't funny. First off, most software systems are developed by multiple people. Seldom does one hand know what the other is doing or coding other than 'their' piece. Second, in general software quality assurance is usually very superficial, done quickly, and more often than not done by the same people who wrote the code. And lastly, software testing is usually positive testing to make sure that the code does all of the 'shalls' in the specs. There is very little negative testing involved. This is a very unfortunate state of affairs, but having programmed for both the military and civilian worlds, take my word for how easy it is. And the military is by far, far the worst.
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| | Tuesday, March 06, 2001 - 05:06 am Christine: Are we back to the simple math thing again? FICO Scores range from 300-900. That's a 600 point spread. Since past payment history is 35% of the model and debt management is 30% of the model that means 65% of the score range (600 point range, 65% of that is 390) plus the 300 base score you're going to get means that anyone who pays on time and keeps their debt low automatically scores 690. Inquiries, number of charge cards, length of credit history, etc. don't matter unless or until you have a problem in one of the first two areas (as Douglas does). Douglas: You're still not addressing the point that I brought up. I'm glad that dozens of people who don't have their own money to risk tell you what a great borrowing risk you are. If you're such a great risk, why don't they put their money where their mouths are at?
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| | Tuesday, March 06, 2001 - 11:29 am Shylock, here's my question AGAIN: "Didn't your score just go down because you had a few inquiries? Now you're a C/D borrower?" Which part don't you understand? I sure don't understand your answer.
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| | Tuesday, March 06, 2001 - 02:30 pm Christine: Are we back to simple math again? Inquiries count for 10% of the model. Since the range is from approximately 300-900 (a 600 point spread) the most that these items could cost me would be 60 points. That's enough to drop me to an 840. Being dropped to an 840 from a 900 doesn't make you a C/D borrower. In order for you to be a C/D borrower you must either have delinquencies or owe too much in proportion to your limits. I currently have credit card limits of $12,900 and I owe $10,090 for a credit utilization of 78 percent (which is down significantly from last month). Will that level of debt hurt my FICO score? Probably. Do I care? Not really, because I've already been approved for the vehicle loan I need and anyway, you gotta borrow to lend. The key to my improving my score would be to pay my debt down not to obsess over inquiries or number of revolving accounts. Those items just don't have enough weight in the model to matter.
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| | Tuesday, March 06, 2001 - 04:02 pm Are you now a C/D borrower? Would you rent to yourself?
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| | Tuesday, March 06, 2001 - 07:44 pm shylock:--- conventional lenders DO NOT RISK THEIR OWN MONEY. they make loans, and immediately resell them on the scondary markets. FICO prevents me from refiancing my properties because fannie mae and freddie mac bought into the quackware, which now mandates that any lender underwriting loans in absence of minimum scoring barfed out means they can never sell it, have to service it forever, and sit on it as an illiquid asset until it is either restructured, paid in full, matures, or goes into default. care to sit on some notes, shylock? who would run to me with cash, no questions asked?? surely not real world investors. congress has re-introduced racism to the american business world. monkey say monkey puke. silicon bus driver say all blackies go back, or bussie no gowhere. sorry, you can't sue a computer. FUCO still sICKs-- *** do you need a barf bag?
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| | Wednesday, March 07, 2001 - 09:53 am You're missing the point, Christine. The point of a rental scoring system would be enabling you to rent to more people, not less.
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| | Wednesday, March 07, 2001 - 10:45 am Shylock, YOU are missing the point. YOU are that Low Scorer you described in your previous question to me. You don't like to answer whether you'd rent to yourself, because according to your OWN example, you are a HIGH RISK tenant. Shylock posted on Feb. 6: "I found out my FICO score today (Experian) and it's 608 (down from 657 in December)". and "I have no delinquencies or derogatories on my credit profile either. Do you hear me whining? No. In fact part of the reason why my score is low is because of excessive inquiries. One of those inquiries is a result of the person that holds my mortgage and to whom I make payments trying to sell that mortgage on the secondary market. That racked up 7 chargable inquiries as he shopped the note." Shylock, you can't explain WHAT would make you a high risk tenant in February, while in December your score was MUCH better. I'm going to end this discussion (remove the new messages button), it's not going anywhere and it takes forever to load this page. Please start a NEW topic if there is more to say.
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