Article re: unscrupulous lending

Thank you for the link to the article. It is extremely sad and makes me ashamed of this nation. This is why I'm glad that FICO (notwithstanding its flaws) exists. And this is why FICO should be fully disclosed to the consumer, so that people won't get lied to by subprime - and racist - loan officers.

 

Fico has nothing to do with this.
Even folks eith high scores are victims.

 

That's right, lbbrown. FICO has significantly reduced lending discrimination based on ethnicity, gender, or age. Now, if we could just get FICO to ignore zip code data - there may be some hope for this country.

 

I read the article also, and I wasn't surprised. I've worked for a subprime lender that went bankrupt. This goes on every day all over the country.

In my opinion, this is just a sophisticated way of red-lining zip-codes before it was considered discriminatory and illegal.

The fact that mtg companies or fico take zip codes into consideration is unfortunate.

 

This website shocked the heck out of me wrt zip code demographics. It has it down to what you read, what music you listen to and what you eat. I was told that some creditors actually use this and others like it to make lending/solicitation decisions.


"You are where you live"

http://cluster2.claritas.com/YAWYL/Default.wjsp?System=WL

 

No:I said what i said because the post was giving credit to FICO where none was due.IF Fico was truly preventing this then you would not be reading about such things in an article like that one.

Reast assured Fair Issacs goal was not to prevent such practices!

 

That article sure proves it don't it ?

Fighting discrimination sure wasn't the game plan of Faire Ike when they came up with FICO.
Any results if there were any in that are were strictly coincidental!.

 

That site that Marci posted the link to is unbelievable!! It perpetuates all kinds of stereotypes and pretty much ensures that the "Country Squires" in one zip code aren't troubled by the arrival of an "Inner Cities" from another. I always knew this kind of stuff went on, I just never knew there was a whole website devoted to it. :\

 

I needed a good laugh. In my zip code, the majority are labeled under young families 18-34.

That would be hubby & me w/ no kids.

The rest:

Blue Collar/Service
Household Income $20400
Travel by bus
Shop at Payless Shoes
By Sears tires
Watch Opera
Read Seventeen magazine

Let's see I'm an accountant w/ a household income of $80000 +, travel by rice burner, shop at Bloomingdales, buy tires from local BF Goodrich distributor (not a Sears), watch Survivor, and read Cosmo.

I don't know anyone in this town that fits the zip code description that Prizm gave. What a load of crock. Personally, I'm insulted. Isn't this just another form of discrimination? We cannot discriminate against gender, race, or nationality, but I guess it's okay if we do it by living residence. Pure baloney.

Dani

 

Yes and for every 1 you think that it helped in this class it has no doubt put the screws to thousands of other consumers outside that class.Nice trade off Eh!

 

lbbrown,

Actually, you're right. I do understand what you are saying wrt this article and I agree that there are many people with high FICO scores who get sucked into subprime loans by lack of knowledge (as the article suggests, these elderly people probably have great credit and better credit scores than the majority of posters on this board). I think people need to be educated (Fannie Mae actually has a nice booklet touching on this "redlining" subject) and I think real FICO scores need to be disclosed to the consumer.

I still maintain, though, that the difference in these mortgage/home equity cases is the human factor. These loans are home loans in which these people have to *look at* and *talk to* the loan officer and vice versa. And so, all of the human prejudices and "what can I get away with" thinking comes into play in these discussions, if the lender is unscrupulous.

If ia person is educated and they find out before hand the minimum credit score needed for ____ loan, and what their's is, then that person will be better armed against discriminatory/predatory lenders.

Nevertheless, all of this doesn't make FICO useless, nor has FICO been uneffective wrt stemming discriminatory lending practices. It has helped people who know their rights. FICO may not have been intended to stop discrimination in lending , but it does (to some degree and particularly in revolving instant credit), and I will take it over the "old way of doing things" anyday.

Abraham Lincoln didn't care one iota for the rights of African Americans - but I'm still grateful for his Emancipation Proclamation.

I actually agreed with you until I read this. And I'm unclear as to what you mean. How is it that credit scoring has hurt one class of people in favor of helping another?

 

Good reply

 

The point I was making here is this.
If fico helped a few people avoid discrimination at the expense of many people with artifically low or incorect fico scores who are paying higher loan rates and higher insurance premiums.I don't see that as a very good trade off.

 

Fair enough, lbrown59.


I'm glad that we were able to meet on common ground in this discussion. I appreciate your contribution to it.

 

I read all your post.I dont' have to agree with everything but I don't have to throw out everything thinking you don't know what you're talking about either do I?

I"m satisifed with the way our exchange has turned out .Hope you are too.