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     | Thursday, November 02, 2000 - 05:52 am  [[[[ Christine -I accidentally posted this first to the On-Line banking forum....you might want to delete it there ]]]]] Have a look at F-I "ficoguide" service it is offering to lenders. It gives THEM a detailed plain English discussion of ones FICO score, factors, etc....however they don't provide it to consumers. I guess that kind of blows up their old argument about how the poor dumb stoopid-ass consumer is just too freakin' ig'nert to understand all this here high-falootin' stuff. In F-I's mind, the lender is capable of understanding a comprehensive and detailed plain-language explanation of one's credit score, but gosh-darn it, ol' Joe and Suzy Blow just ain't got the noggin (or presumably teeth) to figger it out. Anyway....go to the address below and then click on "Sample Ficoguide" (left side of page). PAy special attention to the percentiles, percentage pf population within the increments, etc. For example, their discussion says that 670 is below average, placing one in the 30th percentile. It also says that you don't make the 60th percentile till your score is 750. Additionally, according to the distribution curve, it says that 20% of the population is in the 700-749 range, and that 29% is in the 750-799 range. This all sounds skewed to the right (top) of the range to me. https://www.ficoguide.com/ PS -for whatever reason this is a secure socket connection....don't see any reason for it to be so though.
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| | Thursday, November 02, 2000 - 10:36 am This flies in the face of everything I know about the FICO scores of US consumers. I wrote the computer code that approves card applications for one of the top credit card issuers in this country. If you do not have a 680 you are declined, period. The rates of APPROVAL were for traditional paper applications and phone applications combined at approximately 40% but never over 50% and less than 15% for online applications. These numbers are after weeding out those who don't meet the basic requirements (minimum age, income, etc.). So you are telling me that close to 70% of consumers qualify for these cards and are just not applying? That 40% comes from 15 years of data. How are the numbers Fair Isaac give possible?
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| | Thursday, November 02, 2000 - 06:01 pm Patricia -- "How are the numbers Fair Isaac give possible?" There is more than one Fico model. Different models have different score distributions. If the card issuer you were writing code for uses a different Fico model than the one used in the Fico guide example, that could be the cause of the discrepancy. Also, are you sure that your card issuer uses a Fico score? The bank I work with has its own credit score models. The in-house models produce 3-digit scores that look like Fico's, but have completely different distributions. This would also explain your discrepancy.
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| | Thursday, November 02, 2000 - 07:28 pm Thanks, Lynn. I'll have to check that out ASAP, having company for a few days.
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| | Friday, November 03, 2000 - 05:52 am The scores were coming from Experian directly. So what ever model Experian was using is what we were getting transmitted. I don't know if it was some sort of specialized calculation being done because of the size of the bank. That is possible. All I can say for certain is that the scores were coming directly from Experian and not through another source. Good observation though. I hadn't really considered it when I made the post.
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| | Friday, November 03, 2000 - 10:38 am It's not at all unusual for someone to score over 700. What is unusual is for someone to score over 700 and be seeking new credit. Most people haven't applied for any credit at all in the past 2 years. It's not uncommon for a person to have no new credit cards in the past 5 years. It's not unheard of for a person to have not gotten a new credit card in the past 15 years. Most applicants are poor credit risks.
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| | Sunday, November 05, 2000 - 04:17 pm Very interesting. I am relatively young and I think and I have a hard time envisioning not applying for any credit in the past 2 years between trying to get a cell, a house, changing jobs, etc. I do remember reading a breakdown of ages for credit-worthiness that said basically the ideal risk was about 40-50 years old. I guess that goes along with what you have stated above. Someone in that age bracket (like my very close to my parents age) don't apply for a lot of credit because their expenses and lifestyles are very stabilized.
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| | Sunday, November 19, 2000 - 01:22 am HI CHRISTINE BAKER--- YOU SEEM LIKE THE BEST PERSON TO CONTACT ABOUT MY ONGOING NIGHTMARE PRODUCED ENTIRELY BY FICO SCORING. MY STORY IS VERY LONG AND VERY EXPENSIVE. I'M WONDERING IF THERE IS AT PRESENT A CLASS ACTION LAWSUIT WHICH I MIGHT JOIN, AND I CAN DOCUMENT LOSSES OF MANY TENS OF THOUSANDS OF $$$, PROVIDE AFFADAVITS FROM LENDERS WHO HAVE WORKED WITH ME IN THE PAST AND WANT TO CONTINUE BUT CAN'T BECAUSE OF THIS CURSE CALLED FICO SCORING-- MY CREDIT IS IMPECCABLE BUT I STILL GET SUBSTANDARD SCORES AND AM TREATED LIKE A SUBSTANDARD BORROWER. ONE OF MY PROPERTIES APPRAISED IN JANUARY 2000 FOR $740,000. THE MORTGAGE WAS $453,000. I COULD NOT REFINANCE BECAUSE OF FICO, AND ENDED UP GOING THROUGH THE ORIGINAL (PORTFOLIO)LENDER, PAYING A MUCH HIGHER INTEREST RATE. GOOD RATES ARE OUT THERE, BUT FICO WON'T LET ME TOUCH THEM. NEARLY HALF OF MY INCOME FOR 1999 WAS PAID OUT IN EXCESSIVE INTEREST TO LENDERS NOT HELD HOSTAGE BY FICO. ONE OF MY LOANS IS NOW AT 11.5%. I HAD TO SELL ONE UNIT THIS YEAR BECAUSE MY CASH FLOW WAS FREEZING UP. THE 4%-7% CREDIT CARD PROMOTIONAL RATES THAT I USED TO PAY CONTRACTORS FOR RENOVATIONS EXPIRE AFTER 6 MONTHS OR SO, THEN IT'S 15%-22%. FICO IS THREATENING MY ENTIRE LIVELIHOOD. ANY HELP IS GREATLY APPRECIATED. I AM A NO-INCOME BORROWER BECAUSE I AM SELF EMPLOYED IN REAL ESTATE, AND HEAVILY TAX-SHELTERED, THIS WAS NEVER A PROBLEM UNTIL ABOUT 2 YEARS AGO. NOW IT'S SOMETHING ALOT WORSE THAN JUST A PROBLEM.
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| | Sunday, November 19, 2000 - 02:43 am First bit of advice, don't post in all caps, that is annoying. Second, hire a good lawyer and go to court if you feel you are wronged by FICO. It doesn't make any sense that your credit is impeccable but scores are substandard. Maybe it's the model thing. Christine can comment on that, but I warn you that she is not going to be happy about the all caps post. Rather than refinance that 740,000$ house, why not just sell it and take a 287,000$ income(minus commission/taxes)? You sound like a wheelin, dealin, kinda guy so a good lawyer shouldn't be hard to find. Best of luck. Mike
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| | Sunday, November 19, 2000 - 10:36 pm hi again-- and please pardon the all-caps post. i don't know christine, so therefore i have no way to know that this might be objectionable. i condoed that property, and sold one unit this past summer. the second unit is leased for an amount that covers its expenses, though i intend to sell that as well, to either the tenant, who is a close friend, or on the open market if he leaves. even though i will net about $800,000 out of it all, i'm into this project for about $760,000. i will probably do a 1031a when the 2nd unit goes to avoid the stars & stripes man wearing the tall hat with the carpet bag. my "into this" would be alot less if not for fico-shaft. my own house is worth about $625,000 and i can't get a decent rate to refinance here either for obvious reasons. the 3 year ARM loan i took in december 1997 is about to become another big toothache. (un)fair-isaac is going to be seeing me in court--of that there is no doubt. going it alone entails an enormous legal burden which for me is almost self-defeating, unless i win. my case may be very strong, but when it comes to juries, i might as well play it out in atlantic city or las vegas. without doubt, there are thousands of people all across the country who have been similarly affected by this foolish thing, and i have been told that class actions are already underway. the problem has been to find them-- my situation will make their cases that much stronger, and serve to our mutual benefit. lawyer money is like interest money-- tax-deductible, and fully flushed. i give the best to my tenants, and even keep their rents well below value in a rising market-- far better to live and let live, so long as nobody takes me for a fool; some of my units are 30% below what i could get if the tenants were to leave. knock on head hard, i have never had to evict anybody ever. when i renovate an apartment, i do it as if i was going to live there myself--- jenn-aire stoves, custom handmade red birch cabinetry, marble baths with jacuzzis, red oak flooring, fireplaces, etc. the value is always there. done right, one dollar today is a dollar and a half next week, and two dollars next year. i do make extensive use of my credit lines, especially when offered rates from 4% to 7%-- sometimes it's 0 interest- then i just plug off my highest paper, or stick it into a CD for 6 months and pay it back when 0% goes away. yes, this is free money, but i don't go looking for it-- the credit card people offer it, and i take them up on it. no one should be penalized for that. along comes fico. the same companies begging me to take their money at rates well below what the bond market is paying now send me solicitations to "re-establish my credit" by depositing a small amount of cash in a savings account, receiving in turn a credit card which can be used to borrow against my $1000(2%), for the privelege of paying 18% or more. that's great for recent bankruptees (no offense-- i've been there too). i don't want to use the words to say what kind of an insult it is when sitting on a relatively small but well-managed real estate portfolio, without a single late payment at any time in the past 10 years. no doubt, it's another artifact of the wondrous world of fico scoring, so i just tear it up and throw it into the trash, which is where this despicable problem of mine should have been chucked long ago. for someone in my position, fico has created what is commonly referred to as a catch-22 situation. as a project approaches conclusion, i refinance the property to pay off debt that has accumulated along the way. an intelligent banker can see that my intention is to dispense with outstanding debt via equity that is in the property following an extensive renovation. fico isn't a bank; in fact it isn't even human. it's a computer program that was originally designed as a tool to help human beings make lending decisions that can seriously affect the lives of other human beings. today it has become the decision maker. none of my anger and frustration is directed against the computer; this is a tool, and computers do only what people who make and program them tell them to do. i live half my life on my computer. legal action i plan to take is not going to be against boxes full of silicon chips and megabytes. in a criminal case, does the gun ever get prosecuted?? same idea-  . identifying the actual source of the problem has been half the battle-- until just recently, even the mortgage industry itself was never given the paramaters of fico scoring, nor the mechanics of automated programs such as loan prospector and desktop underwriter. when i have a larger amount of cash available, time comes to consider what to do with it. if not for fico scoring, i could go on daisy-chaining properties with positive cash flow, and build rental incomes and equity into an inheritance to pass along to my children and then some. as it stands, equity is slowly eroding, and most of my earned income is going out to service debtload. interest rates are ridiculous, thankyou all to guess what?? everything would be at 6.75% if not for fico scoring. gotta love that friendly neighborhood banker who went to 100% LTV on one of my properties, and looked the other way when i said self-employed, no-doc. he loves me too, and the 11.5% interest i've been paying for the last 18 months. he wasn't bound and gagged by fico, so he could talk with me about reality, and shake my hand when i signed his note. i said 90 days, and trying to refinance the property ever since. any guesses as to why i can't???-- even at 70% LTV??? selling off property, or refinancing twice with a non ficobound lender in little over a year is not the way to build a real estate portfolio, or even make any money at all when a project is through. fico scoring allows lenders to take advantage of a borrower's compromised position. glue on a bit to the rate, the points, closing costs-- because the computer didn't spit out a "yes" based upon the model of the ideal, all-american borrower. 2 kids, a dog who doesn't bark too much, 4 credit cards, and farts that don't smell. this is what computer modelling does-- it's as bad as racial sterotyping. it's unfair, it violates the rights of any borrower it penalizes, not to mention the guidelines proponents of equal opportunity have fought for along with civil rights. my wife is in a minority class. if i wanted to cry woolif, this alone could serve as an excuse, but i honestly don't believe that this is what the computer has been told to see. i don't need excuses to qualify for credit, and a consistent history of reliable repayment in conjunction with strong equity in every property i have sought to buy or refinance should be quite sufficient to convince anybody with a reasonable head on top of their shoulders that i am no substandard borrower or substandard client, and don't deserve to be treated as such. the business of lending great sums of money is not one to be shoved off on an arbitrary, or at the very least highly inaccurate, computer model. imposing this burden upon consumers and an entire industry alike is a serious mistake. it has been a violation of our rights, and should be tolerated no longer. see you in court, (un)fair isaac, and your blight upon the american dream.
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| | Monday, November 20, 2000 - 03:44 am No offense but why not transfer most of your portfolio into LLCs and hire yourself on as a consultant or employee. You can pay yourself a salary from each LLC almost as great as the positive cash flow from each property. Suddenly there is no need for the no doc loans, your liability is limited in case (knock hard on head) one of your tenants kills themself and some do-gooder lawyer decides to sue you over it AND Uncle Sam treats one-person LLCs using the same social security number of the owner as though they don't exist for tax purposes so there are no added complications on your 1040.
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| | Tuesday, November 21, 2000 - 12:24 pm Shylock- After reading your posting above a few times it suddenly dawned on me how very little I know about what REALLY goes on in the business world! Sofa King
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| | Tuesday, November 21, 2000 - 09:59 pm hi-- thanks for that advice shylock-- i'll ask my tax man about it. it would be nice too if i could refinance property into the name of an LLC as well to get it off my own credit report. i do own one LLC, but it is an investment in somebody else's company. trying to sell it out or borrow against it has been impossible, because their stock isn't pubicly traded. my wife and i were just talking tonight about getting a new couch. do you have a website for your products sofa king? the quality of our last 2 has been pretty sad, and once it starts falling apart she gives it away. the one we have now is our third in the past 5 years. thanks again everybody-- *
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| | Saturday, November 25, 2000 - 09:06 pm I doubt the LLC plan would work. Isn't there a question about self employment on the app? Real estate investors have always been difficult to finance, and a LOT of work to underwrite. I really hope Doug sues Fair Isaac.
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| | Tuesday, November 28, 2000 - 05:33 pm Well, as Im not even close to the situation of Mr. Pratt, the credit game is all relative. I recently applied for a loan on a new boat, only to be told that my Beacon score was too low (576). Until that day, I had no idea what a Beacon score was, let alone how it worked. I still dont. Then along comes this thing known as FICO. I found Fair Isaacs website and some interesting reading only to discover that theres no explanation for how these scores are based. Call me silly, but shouldnt consumers have the right to know how to improve their scores which apparently are the judge and jury in the pursuit of the American dream?? Who decided that we can be "scored" on our credit strengths and/or faults without giving us a guideline to base it all on? Im currently in the "credit re-building" phase of my life, and have been scrounging any and all info I can find to help me in this battle. But it seems that the more I find out, the less I want to know. Ive read that Fair Isaac is going to release consumer scores soon, but are they going to tell us how to maintain or increase them??..... Based on some of the feedback Ive read here, the scoring companies arent accurate, or consistent, and the consumers will suffer until something changes.
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| | Wednesday, November 29, 2000 - 03:22 pm You have a misunderstanding of what a "right" is. A right is something that a person naturally has and which the government, morally, shouldn't take away from you. Clear examples would be the right to religion. Everyone inherently has the right to believe in God and worship him/her/it however they choose. In the past governments have tried to crack down on religions they aren't fond of. The current situation in Communist China is a good example of a government violating the rights of the people to religion. However the word "right" is being used more and more loosely by the year. Now we need a "patient's bill of rights" so I'm told. These are not inherent "rights" but are expectations of proper treatment by a patient from a doctor. It's more along the lines of contractual obligations than anything else. Having said that let's smack this problem right on the nose by acknowledging that neither you, I, or anyone else has a RIGHT to a loan. We may want a loan. We may need a loan. That doesn't give us a right to use someone else's money. They own that money and they have the inalienable right to dispose of it how they see fit. Now there are many people that are in the business of making money by loaning money out or buying loans on the secondary market (myself included). This is a risky proposition, mainly because the law is very, very solidly on the side of the borrower and not hardly at all on the side of the lender. Should a borrower fail to pay you can't show up at his house late at night and pound on the door. You can't post signs around his house proclaiming him a deadbeat. You're not permitted to seize his car, house or anything else even though that person has broken an agreement and stolen from you. Instead you are obligated to go to court. This is an expensive and tedious process. You have to serve notice on the person that owes the money. This is not as simple as just posting a note on his door telling him where the hearing will be. You need to pay someone big bucks to track this guy down and hand him the paper and show up in court to attest that he was physically handed the paper. In many cases the person will avoid being handed the paper for quite some time by refusing to open the door, slipping out the back or having people stall for him. Once you do manage to sue him often times he doesn't even bother to show up. You sit around in court for a few hours and you get a deficiency judgment. How much is that worth? Very little. You still don't have the right to go pound on his door, take his car or bank account money or anything. No, you still need to do more suing in order to get some kind of satisfaction. In fact, often you don't even get the judgement to include the cost of the lawsuit in addition to the amount he owes. A lot of debtors proceed by immediately garnishing wages. This is rarely effective. The person usually either files bankruptcy (in which case all your hard work on suing them is wasted) or they just quit working and find ways to make money "under the table" where it can't be garnished. During all this period of time a clock called the statute of limitations is ticking against you. Is it any wonder that lenders try to lend only to credit worthy people and those that are proven uncreditworthy often get nothing more than a negative entry on their credit and a phone call once a year from someone asking them to pay? But this isn't foolproof either. The nasty, lurking fear out there is the discrimination lawsuit that often costs millions to defend against because some poor, uncreditworthy black person feels like a victim when you aren't willing to take a chance on her. Enter the salvation of lenders: FICO Scoring. People may unintentionally discriminate, but there's very little discriminatory about a computer that pumps out a 580 score. That's a no-pass. Here's your OCC-approved form letter saying the exact reasons why you didn't score higher. You say, "Based on some of the feedback Ive read here, the scoring companies arent accurate..." Oh contrare! FICO scores are pinpoint accurate. That's probably what pisses people off the most about them. A FICO-lender will always be more profitable than a non-FICO lender. Accordingly lenders in droves are jumping on the FICO bandwagon. There may soon be no non-FICO lenders around. You complain that you don't know how to become more creditworthy, but you hint in other posts that you haven't been paying your past bills on time. In all likelihood that is the problem right there! Other lenders have lost money on you in the past and now no one wants to give you a chance except those people who charge you $250 up front for a $300.00 credit limit.
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| | Wednesday, November 29, 2000 - 04:22 pm I have a hard time believing that FICO scores are pinpoint accurate when there are so many mistakes on the credit reports themselves. The FICO scoring models could be much improved if credit reports were accurate and more info was actually reported to the credit bureus. Things like paying your rent, paying your utilities. This would help those poor black people who actually are credit worthy to have a chance at a loan. If the model was actually revealed to the public it could be scrutinized and improved. And of course consumers would know how many credit cards is the right number to have.
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| | Wednesday, November 29, 2000 - 07:15 pm Shylock wrote: "Oh contrare! FICO scores are pinpoint accurate." http://www.bayhouse.com/FICOisFRAUD.html Those scanned reports are proof beyond ANY doubt that FICO Scoring is right there with astrology and palm reading. One day the borrower is approved, the next day he's declined, based on that "pinpoint accurate" FICO Score.
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| | Thursday, November 30, 2000 - 01:42 am the US constitution, written in 1787, defines the rights to live. the government of communist china does not give rights of any kind to its citizens. anyone speaking out against doctrine is subject to arbitrary imprisonment, torture, subscription into slave labor, or murder. at this time, the government of the "people's" "republic" of china is by far the vastest and most deplorable criminal enterprise on the planet, bar NONE. the columbian drug lords are saints compared to what the people of china (and neighbors[such as tibet]) have been forced to endure since Mao Tse Tung brought reign of hate and horror to this most populous country in the world in 1948. hitler was 3rd worst mass murderer of all time at 67,000,000 dead; stalin 2nd at 110,000,000, and chairman mao 132,000,000 (est.), and still counting many, many years after going the way of the do-do. i'm truly grateful that the US constitution makes this only a matter of money, and not whether my loved ones and i should be forced to work for our tormentors to live, or taken out into a field and shot in the back of the head and plowed under---- FICO passes judgement, without consideration for individual rights and circumstances. it came into being to assist lenders in making decisions. now it makes decisions for lenders, even when there may be a difference of opinion. idiots may claim that FICO doesn't force decisions, but there is no disputing the fact that it ultimately dictates the saleability of any given note secured by real estate on secondary markets, regardless of equity position or a borrower's past credit history. i am about to refinance my primary residence again, at 8.375% with 1.875 points. the mortgage broker sitting 2 desks over in my office has 7.125 with 2 points, but can't offer it to me because of the FICO scoring system. closing costs with the FICO free lender are higher as well- these lenders see those of us who don't get instantlt qualified for premium rate loans as substandard borrowers, thus excusing higher rates and other mortgage related expenses. this would be OK if i had an extensive history of delinquency, charge-off, reposessions, etc.-- but i don't. my credit is flawless, and i have hundreds of thousands of dollars equity in the properties i own, though FICO is taking bites out of my flesh faster than it regenerates. i did have to sell one property this year to quell the snowballing debtload, and i can document it down to the last nickel, complete with affadavits from numerous lenders and bankers to demonstrate that FICO scoring alone is responsible. refinancing is a solution for long term stability, not stop-gap to prevent freeze-up of available cash. sitting on $1.5 meg property with $920,000 out against it should not cause problems for a responsible real estate professional in an accelerating market. it never did, until FICO changed all the rules. when you can't take equity out of property you own at high LTV, consumer debt balloons up and compounds the problem. FICO-driven catch-22. if it were me alone in court against (un)fair isaac, i think i might have a chance. that's just a chance, nothing sure if they show up with a lawyer who can blow his ass harder than any jury can stand, and i would plan to come in with real facts, not alot of hot air that asphyxiates from far off distant places. i wouldn't want to win my case based on a lie--- the truth should suffice. given the fact that my employer is not presently willing to support me in any legal action i may undertake, i declare without hesitation that i am in no position to challenge the fed in open court alone. the US constitution might save us from the boneyard, but any quirk o(F)law could put me and my retired wife on the street-corner begging for spare change in a matter of days. that's the nature of the beast--- here's hoping we all can continue to prosper, and the big nasty becomes a vegetarian---- ****
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| | Thursday, November 30, 2000 - 06:41 am Shylock...Im not here to whine about the fact that Ive been irresponsible with some past credit obligations. Im here to gain knowledge and information on how to turn myself around and be looked upon as a "good" credit risk. Im finally understanding what a tremendous impact your credit report is on your life. As far as rights go...if someone sued you in court, wouldnt you want to know why, and what for? I know I would. It just seems to me that if some company like Fair Isaac has the power to score me, then I should have the power to know what they base their score on. Granted, timely payments and not defaulting on credit obligations are obviously (or should be)ways to score better. So whats their excuse for Doug Pratt?? And have you seen the post about the 3 different score on three consecutive days when NOTHING changed on that persons credit report? Ive been told a few different stories when it came to getting new credit. I was once told that I didnt have enough debt to qualify for a loan. Ive also been declined for carrying balances too high on credit cards. So heres the two extremes: 1) Youre penalized for carrying a high balance on an account. 2) Youre penalized for carrying not enough of a balance because creditors can look at it as "potential" debt. So is there a median balance where you can get the "perfect" FICO score?? If you have a credit card with a 5K limit, and you carry a balance of say 2K, does that score higher than carrying a balance of 1500?? This is my main question, and as a consumer, I feel I have the "right" to know.
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| | Thursday, November 30, 2000 - 11:30 am Fair, Issac is also a company therefore is entitled to make a profit off of their peon's sweat. Their scoring methodology is a trade secret and they have the same right as Coke does to protect their trade secrets. Yes, we all want to know how the system works so we can work best within its parameters. Fair, Isacc created a product to forecast. The same way Vegas creates betting lines for football games. Sometimes they are right, sometimes the low score guy upsets them and is capable of paying off 15 maxed out credit cards every month for the rest of his life without ever declaring bankruptcy. That is why they play the game. The system is made to predict therefore it is not perfect. Yet there has to be a basis for it or else the market would reject it. And remember FICO has different profiles that a score can be generated through. And depending on how the business wants to use it, you can have too little debt and too much debt with exactly the same amount of debt. Their system is not perfect. But it isn't going away. I agree that if you are being scored, then that score should be available to you. But asking them to give up their trade secrets is as bad as asking for Coke's recipe and for Microsoft's to use open source code. Mr Pratt himself says that he had to sell a property to quell the snowballing debt. Yes, FICO scoring may indirectly add to his debt, but they very well be right in forecasting a potential for future problems. I wanted my credit union to approve a loan for me to consolidate one loan that I have out with them and one bank loan. The result would have been a wash in my overall debt (since the two would be closed) and and extra $100 bucks a month in my pocket. It was declined because of having eight inquiries in the last year (two of them with the C.U., the original loan and overdraft protection). They do not use FICO at all. Just because you feel capable on wheeling and dealing and renegotiating your debt, that does not mean that corporations need to feel the same way. Every company has their own indicators of potential problems, whether it is FICO on home-grown.
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| | Thursday, November 30, 2000 - 01:02 pm I think Fair Isaac is afraid to give out their formulas because they are afraid of being sued. Also the flaws of their formulas would become clear and companies would drop them. Too many people are willing to believe that these scores are perfect. What independent studies have been done to verify their accuracy? As for giving out their trade secrets I think that is baloney. If Fair Isaac was willing to open up their trade secrets then I'm sure those in the government would be happy to pass laws giving their profits special protection. They are not selling a specially made addictive beverage like Coke. They are selling a formula that grades people. This formula is effectively the definition of good credit in the USA. If they are going to grade consumers and have that grade be treated as gospel by the lending and credit establishment then consumers need full disclosure. It is too important of an issue to write it off as a trade secret and let it go at that.
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| | Thursday, November 30, 2000 - 02:09 pm Their scores arent accurate because theres no designated points system. Its all based on percentages and variable factors. I found THIS which explains why no one person can have a "perfect" score because no such thing exists. These scores are computed by the CRA's, so theres always the possibility of human input error in the program which could result in different scores on different days for the exact same credit report. The part that really hurts consumers here is that no one in the world can tell you how to increase your score from say, 679 to 680 to get the approval for that cute 'lil house with the white picket fence. ~sigh~
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| | Thursday, November 30, 2000 - 04:37 pm "We hold these truths to be self-evident. That all men are created equal and are equally endowed, by their Creator, with certain inalienable rights and that among these rights are life, liberty and the pursuit of happiness." Point 1: The US Constitution doesn't give us our rights. Our Creator has given us rights. Somewhere along the line this understanding of rights seems to have been commonly lost. Nowadays people talk about their "right to an education" which normally means they claim that it's right for them to force other people to pay to educate them. That's a sick joke, if you ask me. Fair Isaac scores are designed to do one thing and one thing only: To indicate with precise accuracy the number of people in any group of people that will become 60 days or more delinquent on an obligation within the next 24 months. Since Fair Isaac does not have a crystal ball they can't say how any individual borrower will repay. Scores predict on groups only. A person with a 350 score paying on time for the next 24 months doesn't make the score inaccurate anymore than a person having an 850 score becoming 30 days delinquent tomorrow. Similarly if a person has a 400 score on one report, 600 on the next and 800 on the next all three scores are equally valid for that same borrower and that's no proof that FICO scores aren't completely accurate. The only way to test FICO scores for accuracy would be to run credit scores on 100,000 people today and run credit reports on those same 100,000 people in 24 months and see if the scores accurately predicted the delinquency rate of that group of people. Studies have been done to determine if FICO scores have a predictive value. Independent studies done by both Fannie Mae and Freddie Mac determined that scores do have a correlation to mortgage borrower's performance. I don't know of a single person anywhere, including this board, that thinks if you took 1,000 people with 700 scores and 1,000 people with 500 scores that you wouldn't find more delinquencies and derogatories in the future among the people scoring 500. It is not complicated for a person to get a good score. First they should pay all their bills on time. Second they should check their credit reports regularly to ensure that the information is accurate and complete. Third they should pay their credit obligations down as far as they can. Fourth they should apply for no new credit. The longer that a person does this the higher that their score will rise. There are specific reason codes to indicate why a person may have lost points in the scoring algorithm. Accordingly there is no mystery as to what makes a person's score. If a person has serious delinquent, derogatory or other negative information on their credit profile it's already been posted on here how to deal with that. If a person has inaccurate information on their credit report the procedure to deal with that has been posted here as well. Fair Isaac does not have a monopoly on the credit scoring system. Providian uses its own scoring system as does Columbus Bank and Trust, issuers of the Aspire card. Experian, Equifax and Trans Union all have their home grown scoring systems. Chase Manhattan, Bank of America, MBNA and all major issuers of credit cards have their own scoring system and criteria. Each company thinks their own system is the best. Competition will tell, but so far MBNA seems to be the best scoring considering that they are soon to pass Citibank as the largest credit card issuer nationwide.
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| | Friday, December 01, 2000 - 04:15 am Again I have to agree with Shylock. Your FICO scores aren't judging YOU. They are merely predicting that (for instance) 80% of the people with your credit circumstances will have a 30 day deliquency within the next two years and 10% of those will eventually file BK. Which also means that 20% of those people will have no problems at all. Businesses have a right to use that type of info to make valid business decisions. Don't take your score as a person validation or a personal attack. Use the info and support that you find here at this board to work with the system and improve your scores.
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| | Tuesday, December 05, 2000 - 05:23 am Don, point taken. Im being graded on a curve, batched in with people who havent performed perfectly with regards to their credit obligations. I made my bed, and now have to lie in it. I can handle that. Whats not right here is that Fair Isaac itself admits that theres no perfect recipe for a good credit rating. You can pay all your bills ontime for 5 years straight, but that doesnt guarantee that your score will be good. Fair Isaac uses phrases like "On the other hand", and "However". Thats B.S. if you ask me. What we need here is a hard lined points system based on individual performance. If we had that, then there would be no mystery about how to improve your credit score.
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| | Tuesday, December 05, 2000 - 02:48 pm If you pay all your debts on time for 5 years, have little or no revolving debt and have paid off 50% or more of all your installment debt then heck yeah you'll score good. If you're not sure what an acceptable credit profile with some delinquencies looks like check this out. I've posted it before, but it bears repeating.
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| | Wednesday, December 06, 2000 - 06:14 pm hi--- bankers might consider any given credit profile risky or not-- that is their call. FICO scoring is the sole determing factor as to whether or not a mortgage is saleable on the secondary market. mortgage underwriting software automatically approves or denies credit, and a lender who may wish to make a loan to a well qualified borrower now cannot, because of the score spit out by a computer--- until just recently, not even the morgage industry itself was told how the scoring models work, and consumers have been left totally blind as to what courses of action they might take to get the scores to improve. high risk or low risk is a subjective evaluation, and if a lender feels that any particular loan involves too much risk, they can decline it and send their business elsewhere. FICO has taken that liberty away from the lender, and brands the consumer as a substandard risk based upon computer modeling alone. UN fair isaac wrote the book on it, and they are going to be the first to be named on the class action lawsuit i am going to file against them, with enough documentation and supporting witnesses to show that what they have done to me personally amounts to countless thousands of dollars in actual damages, not to mention what the real estate industry as a whole has been forced to endure since conventional mortgage lending has been delegatged over to computers using UN fair isaac's arbitrary and highly flawed borrower evaluation programs. if i own $1.5 M in property and have $920K out against it in liens, that represents an equity position of nearly 40%. add on $120K in consumer debt that accumulated by renovating the properties, then go to a lender and apply for a 75% or 80% mortgage at a rate of interest that makes the monthly outlay for debt service 30% lower, or even less. my lenders look at my situation and want to make the loans; FICO makes this impossible. if FICO is designed to evaluate inherent risk and statistical probability of default, something has been left out---- many years of spotless payment history might tend to statistically indicate that if i were to default on my mortgages, it would be because i choose not to make the payment, not that i am unable to pay. if, by approving a loan application based entirely upon scoring models, as FICO definitively does, a borrower's cash flow improves, the borrower builds equity more quickly as lower interest rates on large dollar amounts of outstanding debt leave more cash available to pay down principal (not to mention tax benefits), something is seriously wrong with the way these models are structured. FICO scoring has been around for years, and can be a very useful tool in helping lenders make decisions. it is now the decision maker-- the dog is walking the man, not the way it should be. computer models may show a high rate of accuracy, but each and every case is different, and each and every lender should have the lattitude to make loans with their own money as they see fit without being penalized, in ways such as being told that the loan they make to a borrower is forever insaleable on the secondary mortgage market because the computer model made an inaccurate, or at least arbitrary, evaluation of a borrower due to the way it was programmed. FICO takes the human element of mortgage banking out of the loop-- watch the film WARGAMES for a good hypothetical example of what might have happened during the cold war if the US defense department had delegated nuclear weapons decision making off to computers, and don't forget what you see. FICO has been given too much power over both lenders and consumers, and is only now being demystified. even if it precisely categorizes 98% of borrowers, what about the other 2% it fails?? if the soviet union had launced a first strike to obliterate our country, which city would you like to be living in when 2% of their warhead aresenal came out of the sky?? with 20,000 atomic bombs on hand, 400 would strike their targets. by the way, where is UN fair isacc's headquarters?.......- * you get the idea. i've had enough of this, and if 2% of the american public who take mortgages to buy and own real estate have been as seriously affected by FICO scoring as have i, we have one massive class to take action against this blight upon the american dream. any input, pro or con, and inquiries as to how those of us affected may assemble and plan a course of action, are always welcome. thanks--- * douglas pratt--- BOSTON
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| | Thursday, December 07, 2000 - 07:00 am I still don't agree with you, but I do wish you luck.
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| | Thursday, December 07, 2000 - 07:06 am Yes, Shylock, but what about the idea that, say, I paid all my debt on time for over 10 years (18-28). I had such good credit, that I co-signed for a house for my mom. Now, I go through a big downsizing, take a lesser paying job and basically have to decide is eating and a roof over my head more important than paying CREDIT CARD A or STORE CARD B? I stopped paying because I couldn't. The creditors, bless their evil little souls, WOULD NOT work with me! Yes, I did offer to work with them on payments, answer NO. I did offer to make payments WITH INTEREST but just reduce my minimums and report it as payed on time, again a FLAT NO. So once if became intolerable I filed, with a lot of guilt, CH7 BK. WHY? Because the credit companies WOULD NOT work with my NEW financial situation. Did I need to run up my credit card? Unfortunately it was due to trying to start a business, not trivial stuff. I wasn't overloaded with debt. Minus my home and a car loan (for a used car which was a lemon from day 1, but silly me, I offered to give it back, THEY didn't want it and I payed out of fear) I paid as much as I could. What is sad about people who PAY on time and do what is expected, FICO is not accurate. It may be accurate for somebody like me who messed up and is now clawing my way back to respectability, but why should some computer model decide if somebody, who may have NEVER BEEN LATE on any payment, have to suffer and not get a better deal? Yes, the world if unfair and maybe I am a little annoyed right now, but why don't companies stop using computers to make credit decisions and leave that to people who can obviously see that a person MAKES EVERY PAYMENT, DOES NOT HAVE TOO MUCH AVAILABLE CREDIT, IS NOT MAXED OUT, etc.... If the CRAs and credit reporters would get their act together then maybe this would work right.
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| | Thursday, December 07, 2000 - 07:08 am Also, Shylock, would you agree that FICO should not penalize on inquiries (WHY?). That is downright lame since companies can obviously pull reports without permission whenever it suits them. And don't say they don't, because THEY DO.
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| | Thursday, December 07, 2000 - 11:31 am Again I think you are taking this too personally. A credit score only indicts with "this set of circumstances" that a statistical percentage of people will have problems and a certain precentage will NOT. Are the people who always pay their bills on time etc, being penalized because they are in the same circumstances as people who haven't? I think the answer is no. A business has the right to feel that a score indicates a percentage will have problems, and a percentage will not have problems. And whether or not they wish to buy into that risk. It is not a personal attack. You yourself should know this. You're a perfect example. You paid all of your bills on time and were an honest citizen as well as a good daughter (I mean that sincerely). Yet whatever your score was at that time, a certain percentage were due to have problems and a certain percentage not. Obviously, a certain percentage did. You cannot say since a person have never missed paying a bill, that it will always continue to be that way. People get downsized. Fico scores are merely predicting how statiscal groups of people can handle that based on various factors. Of course I think this also means that I think FICO scores should also include national and local unemployment rates, the Fed prime rate, 401K savings accounts, and everything else too.
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| | Thursday, December 07, 2000 - 04:27 pm Do I agree that FICO scores shouldn't include inquiries? You mean that even though people with 4 inquiries are more likely to default by a percentage that is statistically significant when compared to people with only one inquiry that an inquiry shouldn't lower your score even one single point? And that this should be enforced by law? Because, I suppose, that politicians know more than statisticians and people with their own money on the line? Hmmm... can I think about that and get back to you?
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| | Friday, December 08, 2000 - 01:11 am in my position today, FICO scoring is increasing the probability that i will default on my loans. if i should run into trouble, i will still have to make the payments. when i have run up consumer debt to renovate a property, a non-ficobound lender can require that i pay that debt off with the proceeds of the loan, and that's what i do. one of the biggest flaws in the FICO model is the fact that it is not programmed to look at what a borrower's profile will look like after the loan has been closed. if the first mortgage on a house is $453K at 8.5% and i have $120K in consumer debt at an average rate of 11.5%, anybody with half the brains of an animal cracker can look at the profile, do their math, and realize that when the property has appraised at $740K and the interest rate on all of the debt will go to 7.25% if the loan is improved, the likelihood of default GOES DOWN!, right? the monthly payments are lower, and as less money is going to interest and more to principal, the cash flow improves. in addition, this makes ALL of the interest tax deductible, as consumer debt interest presently is not. smaller tax bill come april 15. lenders feel pretty safe when LTV is 80% or less. FICO penalizes them as much as it does me--- they may want to make these loans, but if the FICO model doesn't generate the magical 680, my note is forever unsaleable on the secondary mortgage market. who is this trying to protect?? surely not the lenders-- i have loans already, and my attempts to refinance are often with the very same lender, and they realize that as rates of interest and monthly payments fall, i am that much LESS LIKELY to default. this fact is not in the FICO model; if it were, the program could generate a hypothetical "how would happen to the score under our guidelines if the loan is approved, half a dozen or so consumer accounts go bye-bye, the amount of outstanding debt is not changing, though the overall rate of interest and monthly payments are going down substantially, to say nothing of the fact that the interest that is being paid becomes tax-deductible at the same time."????--- *. FICO can help some consumers, and when it does, that's great. for every borrower like me who it hurts, perhaps 10 people get loans who otherwise might not, and based upon what i know about the system, i wouldn't be surprised to see half of those borrowers go into forclosure. as a large portion of my income is going to higher interest rates and paying for riduclous daisy-chaining of refinances to get at the equity in my properties, FICO has been increasing the probability that i might get into trouble, and when larger borrowers go down, it can get pretty messy. i can show tens of thousands of dollars of actual damage over the last two years alone, based upon how FICO models now dictate policy to the mortgage industry. my lenders are behind me all the way on this-- it is an enormous burden on them to remain abreast of an ever-changing pantheon of guidelines, programs and products they can or cannot offer day by day and week by week. they're mighty damn fed up with it, to say the least. today i can't refinance any of my property with any conventional lender, and FICO is the reason why. my score is affected each and every time a lender tries to process a loan; it is adversely affected every time i flip a 21% credit card with a $20,000 balance on it down to 4.9% with someone else offering promotional rates. this would never be necessary if i could take all of my outstanding debt and tuck it neatly away in a property or two. FICO models should not give me substandard scores, and the fact they continue to do so indicates that there is something seriously wrong with the system. i could have eliminated my cash flow problems long ago and gotten rates even better than today, if not for FICO mandates. the authors of this amazingly arbitrary and defective group of software programs to evaluate borrowers have passed judgement on me-- they have seriously impeded my capacity to conduct business normally in my chosen profession, and have cost me more money, lost time, wasted effort, and aggravtion than anything else i have encountered in over 15 years of working in residential real estate. here it is in black and white--- "(UN)fair isaac, you have branded me as a unfit borrower, and i am not. i can prove this with many hundreds of pages of supporting documentation, character witnesses, and concrete facts and evidence demonstrating the extent to which i have been denied fair access to credit at prevailing rates of interest, entirely because of YOUR scoring programs. period!. i can prove this in court, and fully intend to do so." anybody can get into financial difficulty for one reason or another. (UN)fair isaac isn't figuring in the possiblity that an earthquake of magnitude 7.4 on the richter scale might hit boston, though one did in 1753. non-ficobound lenders have given me loans, on one occasion up to nearly 100% LTV. i'm asking for 70%-80% now, and can't refinance my own home at a normal rate of interest with a conventional lender. it's time for mr.FICOman to crawl out of his cave and take a look at the real world. it's also time to put banking professionals back in the decision making chair, and unplug the FICO computer. goodnight all.
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| | Friday, December 08, 2000 - 07:22 am Ok, Shylock, sure, but answer me this, shouldn't their be an inquiry model that allows say, a mortgage lender or car dealer to check my credit and if I choose visit a few others (who won't quote me a % unless I let them run my credit) NOT penalize me for shopping around? It seems to me that is quite anti-capitalistic. I heard that FICO might just do that if the inquiries consistently come from the same source over a 30 day period. I see no problem with that. And statiscally speaking, it just says a consumer is trying to get the best deal. Sorry if my previous posts sounded angry, I was in a lousy mood when I wrote them.
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| | Friday, December 08, 2000 - 09:30 am That's just what mortgage brokers do. They'll pull your credit once and shop the loan to many lenders. Though, I have seen them initially pull from only one bureau then find they need a "tri-merge" for a certain lender. This is why a competent broker is necessary.
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| | Friday, December 08, 2000 - 12:16 pm Douglas, you’re a hypocrite. Here you are yelling and screaming that banks charging more makes it more likely that you’ll default. Did you ever consider that when you raise rent on a tenant that it might make then more likely to be unable to pay and get evicted? In fact, every time you raise a tenant’s rent by just $10.00 doesn’t that tenant have hundreds of dollars of provable damages? Perhaps we should organize your tenants into a class action suit against you for all the senseless damage you have inflicted upon them over the years. As you have stated elsewhere you own a very large house worth well over a half a million dollars. Isn’t that just further proof that you have been gouging the poor, probably minority, tenants that you rent to? As far as I’m concerned there’s only one solution to this problem and that is to put into place strong, consumer-friendly rent control laws where you live and own your multifamily buildings. I believe that you should be limited to the rent you were charging in January of 1998 in perpetuity. That all rent raises you made between then and now should be undone and that you should have to pay all the money back to your tenants plus interest immediately. In addition should your tenants move out the new tenants must be charged the same amount you were charging the old tenants. In fact, this is very likely to be good for the economy. Haven’t we heard Alan Greenspan say that the need for higher interest rates is a result of inflation? Aren’t your raises of rental amounts part of that inflationary process? With you and all landlords prevented from making any rent raises inflation will grind to a halt and lower interest rates will prevail with a resulting increase in prosperity for everyone. *********************************** I think it’s great that all those lenders say what a good risk you are and how Fannie Mae should definitely want to buy your mortgage, even though you don’t score 680. Isn’t it funny how they balk every time you suggest that they should put their money where their mouth is and make the loan themselves to keep in house? Oh, they’re very willing to risk Fannie Mae’s money … just not their own.
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| | Friday, December 08, 2000 - 03:58 pm WOW! Interesting point, Shylock.
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| | Saturday, December 09, 2000 - 01:03 am hey shylock-- tenants in my proprties get a $50 increase every 2 years, even when market rents increase $200 or more every 2 years. most of my rents are far below market rate. lenders who CAN finance me now are only those who keep the paper in their own portfolio. they can't risk the FED's money, because FICO models forbid it. my properties are all located within the people's republic of cambridge (mass.) until 1995, we had the most restrictive rent control laws outside of china. when put to statewide vote, i respectfully abstained, balancing the interests of those less fortunate with the potential of personal gain. it passed by a 51/49 margin on the state ballot, and if you think i'm yanking your chain, do a bit of research yourself. limit me to january 1998 rents and there would be little or no change in my situation. no tenant of mine has ever had their rent increase more than $50/month every TWO years, in spite of the market rents going up 10-20% every year, and prices here are about the same on average here as in mid-town manhattan. sitting over my head tonight are two couples, one paying $750/mo for 404 sq/ft 2 room studio, and another paying $1200/mo for a 538 sq. ft. 1 br newly renovated with large EIK/ box bay windows, custom italian tile bath with jacuzzi, new red oak tongue & groove flooring, thermopane windows, storage loft, with all utilities paid by guess who???- march your wisemouth hypocrite FICO luvin' ass up here to boston, and try to find an apartment within one mile of harvard's campus at $750 a month and see what you get. i have worked as a rental broker half a mile from harvard yard for the last 8 years, so let me advise you a bit, and then research this marketplace on your own if you still think i'm the one whining woof when you finish up. $750 won't get you a damn thing short of a room in somebody else's apartment, a couple of parking spots, or storage for a big truckload of junk. banks may charge more interest as interest rates fluctuate. my problem isn't relative to prevalent market conditions of any kind. local rent control laws in this municipality were THEA strictest in the country when i bought my first property here just over six years ago. as spoken above, 1 lousy red king of diamonds-- not even the suicide king. say ye bullshit?? look for yourself, and suck 'em up- * Oh, non-ficobound lenders make loans out of their own money to me because they can't lend me fannie mae's money. sounds like your ack went where your bass should be. do you think i want to pay higher rates of interest to these lenders because i like the smell of the bills they print? do you think i am enamoured of mortgage brokers and the FICOfree lenders to the point where i would rather keep on flipping notes on my property at $10,000 a whack rather than make the best deal with one lender at a good rate, and pay down that note forever until the title is clear? no lender who might ever sell my loans on the secondary market will ever under-write them now, because FUCkO brands them forever unsaleable. oh great yock, shylock! lenders can no longer use their own judgement when it comes to who buys or sells loans- the law of FICO scoring has replaced realistic mortgage underwriting, because fannie mae and freddie mac have been laid long and hard by (UN)fair isaac--- straight or gay, isaac rules the roosts, henhouses, and everywhere in between. in the past, portfolio lenders assumed that they might be obliged to hold their paper for a long period of time. today, portfolio lenders know it will be until the note matures, unless a borrower refinances or pays the it off early. guess what, shylock?-- i never call tenants poor, nor do i look for skin pigmentation, foreign last names, or anything else to categorize somebody as "poor" or "minority," as you put it. what century did you grow up in?, and if you say revolutionary war, i might be inclined to take you for real. so might the queen of england, but then again, maybe not. take me back to january 1998, dispense with FICO retroactive to that date, and i would be happy to turn over all funds relative to rent increases i have made since then to a legitimate relief fund to benefit homeless and hungry people, especially where children are involved. in fact, i would be willing to double it. care to take me up on that 2:1, shylock? [since january 1998 i have acquired two properties, and no tenants there have seen a rent increase]. shylock says i'm gouging the poor out of their breast milk, and FICO-bound lenders have nothing to lose but federal money. (UN)fair isaac has the fed eating filth out of its trough, and that's good enough reason to deny fair credit to all but poorly qualified borrowers, right? the software knows best, so let's put bankers out to pasture. care to put your money where your mouth is, shylock? take just half of what FICO has cost me since january 1998, and subtract all the rent increases i have given my tenants since then. try paying that into a homeless fund, and unless you have a mighty fine job, you'll find yourself the first client of your newfound charity. the city raises my property taxes every year- the oil i use for heat is up 50%, insurance goes up all the time too. more often that not, the small increases i give my tenants every couple of years don't cover their portion of these expenses. my borrowing costs have escalated tremendously, and this is attributable in its entirety to FICO scoring. until FICO replaced real people in the world of mortgage underwriting, i never had these types of problems. today the servant is master, but this has happened only because the master has decided to stop thinking for himself and taking responsibility for his own actions. computers are tools, and nothing more. remeber the words of professor falklan--- "what you're seeing is just the product of a machine-- now do the world a favor and stop thinking like one."== thanks--
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| | Saturday, December 09, 2000 - 10:07 am I'm tired of hearing you spout off that you have "provable damages" against Fair Isaac. You don't know the meaning of the word. If I quit my job and the company I work for has to pay an extra dollar an hour to someone to replace me do they have ($1.00)(40hours)(52weeks) = $2,080 a year in "provable damages" caused by me? In Douglasland they do. If I buy a quart of milk a week and the price goes up by $0.10 do I have $5.20 in "provable damages" against dairy farmers? In Douglasland I do. If I switch my long distance service from a company that charges ten cents a minute to one that charges 8 cents a minute do they have 2 cents a minute in "provable damages"? In Douglasland they do. Accordingly everytime you raise their rent by $50.00 a month obviously they have $600.00 per unit of "provable damages" in Douglasland and they should sue your bellyaching arse. ************************************************ No one forces Fannie Mae to use Fair Isaac's model. Fannie Mae money is not money of "The Fed" as you keep saying. Fannie Mae (NYSE: FNM) is a corporation that is positioning itself to, "extend its record of superior earnings performance". Admittedly Fannie Mae is a GSE (Government Sponsored Entity) that gets an estimated $8 billion worth of subsidies a year in the form of exemption from state and local taxes, billions of dollars of credit from the HUD and an implied government guarantee of assets that translate into lower borrowing costs. Fannie Mae handily uses $2 billion of that a year to increase stockholder value and almost a billion more to hire lobbyists to ensure that they can continue to feed at the public troff for years to come. If you decide to borrow money at a time when the United States is in the worst credit crunch since 1981 and you get higher interest rates then boo-fkng-hoo! But you don't have "provable damages" against the banks, the federal reserve, Fair Isaac, Fannie Mae or anyone else.
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| | Saturday, December 09, 2000 - 03:10 pm Very well said, Doug. I attempted to post a message in your defense but I couldn't have said it better. Frankly I don't understand Shylock's animosity. It seems personal for whatever reason.
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| | Saturday, December 09, 2000 - 03:37 pm My problem is that Douglas seems to think he has a right to sue someone with whom he has never done any business and he hasn't a scrap of evidence that said entity has caused him even the slightest bit of harm. What's next? If I get hit by a drunk driver will I sue Budweiser or Ford?
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| | Sunday, December 10, 2000 - 08:39 am well, car companies HAVE been sued for that...and closer to home here a lady sued her employer, RE-MAX (lol) for allowing her to drive home tanked after a company Christmas party and she had an accident. The difference between your rhetoric and Douglas' is that Doug tries to balance profitability with responsibility while trying to deal with, quite frankly, an unconstitutional, improperly regulated and illegal business like unFair Isaac. Just think of how much better EVERYBODY would be, tenants and landlord alike, in this situation, if Douglas could get proper large-scale financing for his operations like any other blue-chip corporation can lobby for.
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| | Sunday, December 10, 2000 - 12:47 pm Unconstitutional? Improperly regulated? Illegal business? Please be specific. Which portion of the constitution do you feel Fair Isaac is violating and specifically which law do you feel that Fair Isaac has broken? Perhaps car companies HAVE been sued when their customers improperly use their vehicles, but it should be noted that the vast majority of Americans are against this and the only practical effect of such lawsuits is to increase the price of cars and/or prevent companies from providing valuable goods and services that people want and use. ************************************************* California, my home state, is experiencing a severe power shortage. It seems likely that next year we will experience "rolling blackouts" where electricity to my home or office will be shut off from time to time in order to supply power to other homes and offices. This crisis is caused in part by the point that California used to import quite a good deal of electricity from Nevada and Arizona, however Nevada and Arizona don't have excess capacity this year due to the growth in their economies. Of course, Nevada and Arizona could be importing electricity from neighboring states themselves and the electricity they produce could go to California. Those states, in turn, could import power from states further away from California to meet their own needs. Accordingly I conclude that our power shortage here in California is your fault because you, in whatever state you live in, are using too much power. Accordingly I plan to sue you and to get a court injunction against you to mandate that you use no more power than the amount that a California judge (that I elected) considers necessary and proper for your use. It should also be noted that the price of natural gas and gasoline is higher in California (again your fault for using too much) and I'm going to sue you for that too.
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| | Monday, December 11, 2000 - 01:36 am Fannie Mae and Freddie Mac set guidelines that specify when and how a mortgage may or may not be sold on the secondary market. shylock is making reference to open markets, and price differential caused by fluxuations in supply and demand. home heating oil now costs 50% more than it did a year ago-- i buy futures on the mercantile in summer, knowing that prices rise in winter when demand is high. free market enterprise means exactly that-- buyer and seller make an agreement, and conclude their transactions accordingly. any commodity can go up or down in value as prevailing conditions allow. i would never consider suing oil companies or those whom i contract to store and distrubute it where and when i need it. the nasdaq has been most unkind this year-- shylock suggests that my mode of thinking would justify action against the broker who sold me the stock, or the company that had lower earnings than expected, or had to file a bankruptcy petition. when some moron has a liter of scotch for lunch and then turns a vanload of kids into sauce, how can the manufacturer of his truck be responsible, unless an accident of this nature was caused by the truck itself, and not the driver??? sitting out there in sunny california, why won't shylock install a bank of solar panels with a deep cycle battery backup and tell the power company to sit on a tack when the lights are about to go off??? the government used to regualate air travel and long distance telephone. good ol' ma bell had a monopoly on rates, and i remember when my father had phone bills higher than his mortgage, with my share alone swallowing up as much as i could earn by mowing lawns or shoveling snow year-round. it cost 8 times more to call my sister in princeton nj or the lady i loved in fairfield ct in 1976 than today, frigg inflation or supply and demand. care to make a donation to your local phone folks for all you have saved since the government went out of the industry, shylock? Fannie Mae and Freddie Mac first embraced, then adopted (UN)fair isaac's computer models, giving the "conventional" lenders an effective monopoly on the entire mortgage industry, at least with respect to banks and institutions who sell, or might even consider selling, their notes on the secondary markets. for comparison, purchasers of condominiums in any large building have long been affected by the ratios of owner occupants to that of investors in the association-- the cut-off is 25% investors, and if that limit is exceeded, no lender who might ever seek to sell their note on the secondary market can ever do so; consequently if the building is "non-conforming," financing is much more dificult to procure, and value of units in that building can be seriously impacted. FICO scoring now extends this feature to all borrowers who get less than 680 points from some arbitrary computer program, supposedly accurate enough to take bankers out of the office and onto the golf course. when it goes so far to turn my bankers' resounding YES into a conscriptionary NO, we have what is called "governmental regulation" in most parts of the free world, whether imposed directly by state decree, or indirectly by manipulation of the marketplace itself, implimenting penalties to those lenders who don't comply with the mandate. Yes shylock-- no lender is obliged to sell their paper on the secondary market. yes shylock again, FICO scoring doesn't prohibit lenders from making loans to one borrower while declining another, so long as the decision is not biased upon protected classes covered under civil rights statutes, such as race, creed, color, religion, national origin, sexual orientation, among others. FICO scoring in now in violation of fair lending laws, as it has become the determining factor of approval/denial, since a branch of the federal government adopted this as the sole criteria for lending decisions, not simply one factor a loan officer may consider when implimenting independent company policy. any lender acting against Fannie Mae and/or Freddie Mac by approving a mortgage loan of an applicant who has scored less than 680 on (un)fair isaac's model is automatically and immediatley penalized, as the loan becomes forever unsaleable on any of the secondary mortgage markets. even if a lender does not customarily resell notes secured by real estate, the value of a lender's portfolio [or the lender itself] must be considered by subjugating entities during takeover, merger, or liquidation. illiquid promissory notes issued to a borrower at normal interest rates may at best be overlooked, and at worst raise questions of incompetence at a manegerial level, embezzlement, nepotism, or open fraud. in today's world, investors tend to look for the worst before dreaming of the best. FICO scoring passes judgement, and forbids humans from acting as they know best. (un)fair isaac pretends to know us all. that's why it sucks. before long, it will be doing to larger financial institutions the same as it's doing to me today, one relativly small, individual boston-based property owner. if you think FICO doesn't have its head packed high up into its ass, let's suppose for a moment that i'm THEA bill gates. a few hours interest on his empire could swallow my net worth, but that's not relevant to the point i wish to make. suppose mr. microsoft has a couple $Meg outstanding debt, and wants to refinance his house. perfect credit, not one late payment. maybe he uses plastic money to make purcahses when it's offered, maybe not. i'm not swimming in the same ocean he does, and even big tuna don't charge into a perfect formation of 350 hammerhead sharks to start nipping off tails and fintips. it might surprise to shylock and the FICO writers to know that i never had occasion to evict a tenant, and hope to keep it that way. in a marketplace such as the boston area, giving the best you have to give to your tenants, as much as to your property, yields maximum returns in every way. i gutted 2 bathrooms in 1999, and spent just short of $35,000 reconstructing them. 6x10 space, care to try it?? jacuzzis, italian perlato marble walls, mosaic inlay, custom hand-made cabinets in red birch with matching chair-rail, marble vanity tops with recessed sinks, climate control, brass fixtures, specialty lighting-- this is what i do with my properties, and when i don't get ongoing complaints from tenants living there, so much the better. FICO sees nothing and knows nothing other than what it has been told to see and what to do. FICO knows nothing about free markets, and free markets function nicely, until some form of control imposed from without tells two parties in agreement what they can or cannot do with their own resources. remember shylock the wonderful praises you sang about rent control? we had rent control here until 1995, and one of the laws told condominium owners they couldn't live in their own units. don't get me wrong-- this was the infamous "removal ordinance #966", and if you owned an affected condo, living there was against the law, and you could be fined $500/day if found in violation. i may have abstained on a statewide referendum on rent control, though this law was one i always opposed. mortgage lending is now under government control in the USA. opponents of this arguement might say that a lender who can sell loans on the secondary mortgage market is being granted a privelege, as much as the same lender might have denied a home loan to borrowers with a lengthy record of unpaid debts, charge-offs, and repossessed vehicles back when lenders had the freedom to decide how and to whom to make loans, free of penalty when choosing to do so outside of the parameters of a federally imposed penalty, whether or not represented by a fine or unilateral revocation of incentives (such as saleability of the lender's notes on secondary markets), based completely upon a computer model. your FICO score must be 780 or higher shylock-- when somebody applies for one of my apartments i do make use of a computer to run their credit-- if something unusual gets spit out, i offer an opportunity to explain, and more often than not, unscrew somebody else's screw-ups. rats are not intelligent creatures, and in most cases efforts they make to conceal their truth stink alot worse than they do themselves. strange behaviours, bad references, and evidence of illegal drugs usually tell all long before the computer or i catch lies on their application. this time last year i had an electrical contractor with 2 helpers wiring up a half-megabuck unit at $80/hour-- i popped in at 8:30 one evening and found them charging $80/hour to smoke pot. when the job was done, many of the electrical outlets were wired incorrectly-- some were dead, alot of illegal cloth runs from 1929 were still live, and an amazing network of funky phone lines that were supposed to come out were all still in place. the tenants had returned to armenia at the end of septmeber, and their phones and cable tv were still active months later. the reeferhound electricians played musical wire with the whole building, and the fun continues to this day. i sold the unit on the top floor in august, and we had more electrical madness when the buyer had his home inspection. getting the doorbells to work was a project unto itself. FICO scoring has taken decision making out of the hands of most lenders. score under 680 means the same today as buying a condo in a building with less than 75% owner occupants, or going into an investment property. FICO is now THEA determining factor as to whether or not a refinance of one's primary residence conforms to traditional Fannie Mae/Ferddie guidelines-- LTV makes no difference, equity makes no difference-- all that matters is the number (UN)fair isaac's programs spit out of a computer. it's one colossal sham, and nothing more. the appraisal on my house came in at $656K this week. i owe $440K, making LTV less than 70% for a straight refinance. getting over tired again--- so sick of this damn miserable thing. once upon a time, people talked to bankers, and the banker usually listened. FICO has been programmed to listen, and also prevents any human being from listening either. somebody has sold the fed a nice piece of florida marsh at cambridge ma. prices, at present about $4,000,000 an open acre. i used to sit up late and enjoy my home cinema-- now i post my frustration over some jackass method used to determine who can or can't buy or refinance property, trying to explain to the likes of shylock why it's easier to service a healthy 7-figure debtload at an average rate of 7% fully tax deductible, rather than 9.75%, with uncle sam taking a bigger bite that he would if human beings such as the bankers i have known for years could make decisions as to how and to whom to lend their own money, without facing penalties of a most severe nature, especially when millions of dollars are involved. do your math. fico free lenders assume that any borrower approaching them is B/C credit or worse-- unacceptable to federal insitutions who ultimately determine whether or not any loan can be sold on the secondary market. FICO dictates federal policy. a score of 680 say yes, while 679 says no. some big wig out there is going to get ficofucked before long-- imagine a famous celebrity or major political figure unable to buy condos or refinace their house because of this ridiculous scoring program. FICO is brown & beefy, and i'm not talking about dog food. until it became the ultimate lender, it seemed to be a novel, innovative way of evaluating credit profiles and falling asleep again--- such a waste of time and life posting up bad experiences with some idiot's software that automatically categorizes one borrower over another. in court, i will seek to make (UN)fair isaac come forward with justification for rejecting each and every loan i have applied for over the past three years. this is at least a dozen applications, and probably more. consequently, i end up financing a new purchase through a lender who is not obliged to adhere to the FICO scoring restrictions. many such lenders will apply a sliding scale of the interest a borrow will be asked to pay, again based entirely upon the FICO score. each of three primary credir reporting agencise nearly always give widely varying FICO scores, and no one knows why a number is at it reads, why credit scores should fluctuate widely on a day to day basis, or what course of action to take to make the scores improve. aitting up all night again giving grief over this thing-- so stupid if you aske me--  *** don't we all have better things to do with our lives. i've been up all night again working on this post. good night, and squish any FICObugs who wander into you real world. my head us fried again. bonne nuit mes amis-- **
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| | Monday, December 11, 2000 - 11:37 am You started out so good and I was actually feeling sympathetic to your situation again. You started with talk of a free market economy. You spoke of the harmful effects of regulation. You correctly noted that Fannie Mae and Freddie Mac dominate their markets not because they have a better business model but because they are government subsidized. You expressed your frustration at the problems this governmental regime causes you. And then from that you leap to the bizarre conclusion that the solution to too much government is more government. That Congress’s subsidies can only be rectified by counter-regulation imposed by a federal judiciary and furthermore that this counter-regulation should not be imposed on the main beneficiary of Congress’s largess, but rather upon a bystander because they happen to be a vendor used by Fannie Mae. Imagine that the legislature in your state passes new, stringent laws mandating “tenant safety.” Basically they want you to put in a brand new style of smoke detectors – the old ones will not be acceptable. These new smoke detectors are perhaps 2% more effective. The negligible improvement is probably not worth the $150.00 for the unit plus the cost for the electrician to install them (units must be wired into the electricity of the building AND have a battery backup in case of power failure). But the law is the law and you get your (non-reefer-smoking) electricians to install these things. And you immediately turn around and sue those electricians because you have $80.00 an hour in “provable damages?” Or do you sue the manufacturers of the new and improved smoke detectors because you have $150.00 in “provable damages” against them because their smoke detector was mandated by the legislature? Or do you sue both? How is this any different from suing Fair Isaac?
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| | Monday, December 11, 2000 - 08:05 pm Fair Isaac sells a defective product.
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| | Tuesday, December 12, 2000 - 04:38 am If Fair Isaac sells a defective product it is the right of every entity that buys the product to discontinue buying. Douglas does not buy FICO scores. You will find it very hard to prove that Fair Isaac's product is defective. Furthermore you need to prove that not only is it defective but that Fair Isaac knew it was defective and took no action to try to correct the defects. Unless you have a secret Fair Isaac memo that indicates that the company was aware of defects in the model that they didn't bother to correct you haven't got much of a case. Now a smart trial lawyer will compensate for the weakness of his case by enlisting thousands or millions of plantiffs each claiming huge damages and then offer to settle for pennies on the dollar. These settlement offers are almost always taken because the cost of defending against the lawsuit is very high. Of course this is more like legalized extortion than anything else, and the net result will be that Fair Isaac will charge $1.20 for their scores instead of $0.60 and it will still be far, far cheaper to use scores than to hire an underwriter at $15-$20/hr PLUS scores can't be sued for discrimination but underwriters can.
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| | Tuesday, December 12, 2000 - 01:30 pm We'll see.
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| | Tuesday, December 12, 2000 - 04:51 pm I doubt anything will change until somebody bans soft money donations to parties. When that happens OUR GOVERNMENT WILL HOPEFULLY RETURN TO CARING ABOUT THE LITTLE GUY, instead of passing bills or giving tax refunds to big corporations who support candidates.
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| | Thursday, December 28, 2000 - 10:33 am I moved Dougs posting to the new topic "Doug Pratt - FICO Credit Scoring victim ready to sue" If anyone has new info on Fair Isaac credit scoring, please make a new topic such as "2001 FICO updates" or similar.
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