Blame "Who" on the Credit Problems

[HHM]

Sorry for two separate posts, but here's a link that might answer some questions.

http://people-press.org/reports/disp...?ReportID=124/

Still doesn't demonstrate that "because" someone is a Republican, they are more likely to be investors and more likley to work for banks that are foreclosing on homes.

[allavdj]

Another conclusion was to put an end to the predatory lending practices.

In my humble opinion, every singe credit card company out there is a predatory lender. I had credit cards that I had no business having and I have never misrepresented myself on an application. HSBC, Citibank, Capital One, they just GIVE credit cards away and count on you just making the min payment and paying them for-ev-er. Thats pretty predatory if you ask me.

I'm sorry you feel like I'm pointing a finger, I'm not, just speaking in generalities. While it may be true that medical bills are one of the top reasons for bankruptcy, that doesn't make it right for the rest of us that just screwed up. Also, I have stated that when it comes to medical bills, exceptions have to be made, especially with the current state of our health care system, but I digress.

Might I illustrate my point: When you buy something with a credit card, a new washing machine for example, you are making a promise to pay for that item.

You get your 12 months, no interest, and are making payments, but then...3 months into the deal, you get sick and rack up many thousands of dollars of medical bills, loose your job, and wind up in a big financial hole.

You finally get your health back and start working, but you just can't pay for everything, you get tired of the collectors and you file bankruptcy.

Now here's the key...Why should Sears (for example) have to eat the $800.00 loss on the washing machine that you only paid $200 on? Sure, it's not fair that you got sick, it's not even your fault, it just happened, bad things happen to good people, but why should Sears get screwed too?

Wouldn't it make more sense to save up for 12 months, pay cash for the washing machine?

(edited to correct my inability to use the correct spelling of "hole")

[robivi3]

HH, I agree totally. That "statistically" is utter hogwash. I work in a Transit agency that is 62% black, 30.2 % hispanic and is exactly 8.8% caucasian. It is overwhelmingly Democrat. The reason I brought up race is to debunk any "downtrodden" or maybe only "rich, white Dems". The simple issue is that people invest, Dem or Republican whereever money can be made. Many, many , many "Democrats" in my place OWN apartment buildings (the floor sweeper makes over 20 bucks an hour, we ain't poor), are heavily invested in Oil, Agro through NACO (Pebsco) or the FRS. TONS more that I have worked with over this 25 years (we have near zero turnover) invested in the "subprime" market through the investment option with FRS, some lost lots of money, some like my wife are in FRS and are into Agro and she is making 2.5% a month on average. I am in the fixed account and still have a "gob" of money at the end of the rainbow, I see it online everyday.

In fact one of those floor sweepers confided to me today that he took a $7,000 hit on his "subprime" investments. The fact is that making money goes WAAAAY out of party lines and that on any sweet deal BOTH sides of the aisle are privvy. I see it in Government right down to the guys who get the grass cutting contract, 'nuff said, don't wanna get in trouble. We've got Dems, Republicans (some Reps are black, mostly white and hispanic and lots of white and hispanic liberal, conservative, even libertarian nuts) and the wealth that I have seen created, lost, invested, boosted, corrupted, donated and used to better people or lost to young woman by co-workers who became old men has had NOT one thing to do with Party Affiliation and some of those Dems and Republicans are very involved and very political.

Sorry folks, but that's my little soap box. I don't put all Dems in the same little box of "most likely" or my fellow "Reps" in that same box and say this is how you act. Statements like that just rankle me a little. Money knows no party. And yes, the all County records here, down to Police Records and copies of your Mortgage are available online and some of those bleeding heart Democrats that I know have done evictions on their tenants, have court papers filed against them for unliveable units (I have someone in mind, who talks a good game but plays by his own rules in his own life) and even have misdemeanors! And some of those nasty republicans, those evil "investors" have given three days of annual leave to a Dem who needed to stay in pay status to keep her Insurance after a lengthy sickness (statistically unlikely) and I've seen Republicans do far better and far worse acts and get a pardon and re-instatement from a Dem. You can't put people in a box.

The fact is I had a "sbprime", I knew it when I signed it. The print was NOT fine, it was the same size EXACTLY as all the other print and it was REAL clear, REAL readable, my Mortgage Broker is a co-worker and GOD FORBID a money making, investing Democrat!!!!! He helped me at the time, he then heklped me refi when time passed, I, the BK'd Republican have benefitted from the Democrat now and he didn't do it for free!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! He should have done it free, just because that Democrat planned better, went to school and invested, lives in a huge home and has a PAID off car, he should have been compassionate! Oh, I forgot, his money, knowledge, time, education, guess he isn't in a box... he should get back in his box and behave the way his party affiliation says.

[Granny]

In my humble opinion, every singe credit card company out there is a predatory lender.

I disagree, some of mine were very good to me. Just because they offer the card doesn't force someone to take it or use it. Common sense goes a long way. I didn't take most of the cards that were offered to me. I had 3 or 4 that I had never used when I filed bk. They were sitting in a drawer. I picked and chose who was going to be lucky enough to get my business and when they started the universal default b.s. I closed those accounts because I had enough sense to read the fine print and recognize when it was no longer in my best interest to continue to do business with them. I continued to pay off the balance according to the original terms.

[quote]I had credit cards that I had no business having and I have never misrepresented myself on an application. HSBC, Citibank, Capital One, they just GIVE credit cards away and count on you just making the min payment and paying them for-ev-er. Thats pretty predatory if you ask me.[quote]

I can't believe I am sticking up for the credit industry, but nobody twisted your arm to use them. I don't see how you can blame the creditors. None of your creditors would have rejected your payment if you had sent in more than the minimum either.

I'm sorry you feel like I'm pointing a finger, I'm not, just speaking in generalities. While it may be true that medical bills are one of the top reasons for bankruptcy, that doesn't make it right for the rest of us that just screwed up. Also, I have stated that when it comes to medical bills, exceptions have to be made, especially with the current state of our health care system, but I digress.

Well, let's make an exception for grandparents who got screwed by their own kids and are raising their grandkids.

Might I illustrate my point: When you buy something with a credit card, a new washing machine for example, you are making a promise to pay for that item.

You get your 12 months, no interest, and are making payments, but then...3 months into the deal, you get sick and rack up many thousands of dollars of medical bills, loose your job, and wind up in a big financial hole.

You finally get your health back and start working, but you just can't pay for everything, you get tired of the collectors and you file bankruptcy.

Now here's the key...Why should Sears (for example) have to eat the $800.00 loss on the washing machine that you only paid $200 on? Sure, it's not fair that you got sick, it's not even your fault, it just happened, bad things happen to good people, but why should Sears get screwed too?

1. 'Cause Sears took a gamble and lost.
2. It's a cost of doing business.
3. If their interest rate wasn't so high, they might have had a better chance on getting paid back.

Wouldn't it make more sense to save up for 12 months, pay cash for the washing machine?

Maybe for a washer, but there are somethings that are true necessities such as a hot water heater and if the creditor is willing, especially if you can get 12 months no interest, I'd take the chance.

You spoke in your first post about market corrections. Do you realize what would happen to our economy if all of those markets corrected at once? It would be 1929 all over again.

[allavdj]

"You spoke in your first post about market corrections. Do you realize what would happen to our economy if all of those markets corrected at once? It would be 1929 all over again."

I'll concede there.

I realize that none of the things I've talked about will ever happen, the precedent has been set, but it would be nice if what we consider normal (not good, but normal) business practices had been set with more forethought into what would happen. Surely all these sub-prime lenders, investors, credit companies, etc, knew what would eventually happen. Maybe they thought they could make more than they would loose, or the feds would bail them out, I dunno, but something's gotta change, and I imagine that WE (yes....you and I) are the ones that will get the short end of the stick.

[Granny]

I realize that none of the things I've talked about will ever happen, the precedent has been set, but it would be nice if what we consider normal (not good, but normal) business practices had been set with more forethought into what would happen. Surely all these sub-prime lenders, investors, credit companies, etc, knew what would eventually happen. Maybe they thought they could make more than they would loose, or the feds would bail them out, I dunno, but something's gotta change, and I imagine that WE (yes....you and I) are the ones that will get the short end of the stick.

Again, what's gotta change is education for the public. Remember what P.T. Barnum said "There's a sucker born every minute"

There's always gonna be somebody looking to make a fast buck, at least as long as there are suckers, er I mean takers. There's always gonna be a bubble, whether it's the housing industry or Silicone Valley. We (the government) can't legislate for every conceivable way that someone can figure out how to make a fast buck. Our lawmakers aren't that underhanded that they can think up the next scam and legislate against it before it happens.

We need to educate the masses so that they learn to do a smell test before they buy into something.

[jp2861]

I'm sure you'll all flame me so I have my flame retardent vest on. I don't blame the banks or the government. that's just a cop out. VA loans are zero down and folks are making the payments, so that theory goes out the window. Do banks give outrageous lines of credit? Yep. But who is at fault for not managing their own spending habits? Not the banks. Someone mentioned education. That's definitely part of the problem. The biggest problem is the consumer...not the lenders. Reading some of the posts here is a good example. I've read numerous times about people filing BK and yet they are hell bent on keeping the $500 a month car payment, not to mention the insurance for those types of cars. It's not the lenders, it's the attitudes of consumers that leads to credit issues. Nobody here is being forced to live beyond their means. When consumers start taking personal responsibility and stop looking for excuses or people to blame things will improve.

[MomIcantFindmy]

What this country needs is better education for the consumers, starting in high school if not sooner. My middle daughter just finished a 40 page paper titled "The Credit Crisis in America". This was an interdisciplinary paper with 3 pages of citations. One of the conclusions was to start with educating the consumer, not only on the dangers of predatory lenders but also on the danger of depending on 2 incomes to make ends meet. Another conclusion was to put an end to the predatory lending practices.

You said EXACTLY what I was thinking. The only way to change the future is through education.

Predatory lending will always be there in one shape or form. Think about 100's of years ago when farmers had to promise their homestead to get seed for their crops. It is all a statistics game and the predator will only gamble if he thinks he can win.

School students are not the only ones that need education about credit and financing. Elderly, families, singles and children as soon as they can read. Educate consumers through public TV, radio, billboards, schools, and all means available.

[BassBoy]

I'm sure you'll all flame me so I have my flame retardent vest on. I don't blame the banks or the government. that's just a cop out. VA loans are zero down and folks are making the payments, so that theory goes out the window. Do banks give outrageous lines of credit? Yep. But who is at fault for not managing their own spending habits? Not the banks. Someone mentioned education. That's definitely part of the problem. The biggest problem is the consumer...not the lenders. Reading some of the posts here is a good example. I've read numerous times about people filing BK and yet they are hell bent on keeping the $500 a month car payment, not to mention the insurance for those types of cars. It's not the lenders, it's the attitudes of consumers that leads to credit issues. Nobody here is being forced to live beyond their means. When consumers start taking personal responsibility and stop looking for excuses or people to blame things will improve.

In my opinion, you hit the nail on the head, the way I see it. We as consumers need to be more responsible and wiser about our finances. On the other hand, it's unfortunate the way extending credit has been done over the last decade or so. Someone or some entity is going to have to step in and set some guidelines in order to stop the recent trends. The guidelines will most likely have be for the consumers, and yes, the lenders.

Good debate folks.

[Hillbilly]

Enticement, inducement, and seduction, the "ploy", or the "sales job" a carefully cultivated and professionally orchestrated "Marketing" tactic employed to psychologically overcome the resistance of the victi......'er, ah,...The "consumers" resistance, and convince them that they absolutely MUST take advantage of this once in a lifetime offer!
Better educated consumers? Oh yeah, no doubt about it the "consumers" that end up posting their sad stories on this board, are receiving an education.
As the individual victims of a "system" that by its very nature exists and thrives by putting consumers deeply into debt, and keeping them there for as long as possible,
a virtual "life sentence" of economic servitude to the financial "system"......actually, extending it even beyond your life, if they are successful at persuading and "selling" our families into the purchasing and financing of elaborate and expensive funeral arrangements.
Ten of thousands of "Marketing" professionals are hard at work around the clock to convince YOU that you really can afford whatever product or service it is that they are selling, and that you absolutely cannot live or enjoy your life without it.
Education? Most all of the posters in these Forums grew up in this country and have been exposed to how "marketing" works since the time they were in diapers, Whom in this whole wide world should know better?
Again, as to "education", I note no great lack of literacy, and no surfeit of posters whose attainment of their former heights, either suggests or required the possession of formal college degrees. A claim to an ignorance of the ramifications of indebtedness sound quite facile when coming from such.
Other than genuine victims of unavoidable major economic disasters, such as an unforeseen abrupt loss of job, income or health, and/or overwhelming medical expenses, the rest on here are mainly composed of those who simply could not resist the siren call of the "BUY NOW-PAY LATTER" marketing of consumer debt.
The "education" that is needed to combat this, is unfortunately, usually only to be obtained and -RETAINED- by enrollment and attendance in The School of Hard Knocks.
And even there the lessons require attendance, carefully listening to the teachers, and retaining what is being learned. Here's hoping that everyone here gets smarter and graduates.

[whywhywhy]

I agree with the comments regarding responsibility with personal spending habits. Consumers have to learn to restrain themselves and better understand that even if something is possible to do, doesn’t necessarily mean it should be done.
Now, that being said, I don’t blame banks, credit unions, and lending institutions completely for problems, but I do think the way the industry runs needs to be evaluated, both banks and credit unions. I’ve worked for both, from teller to district branch manager to operations analyst and everything in between) have some of the most aggressive marketing I have ever seen. The major problem is most of it is hidden and they operate completely knowing they can exploit exactly what they say consumers should not do. I saw advertisement the other day from a company offering private student loans, showing one college student having to experience the horrors of working while going to school and the other one sitting back and enjoying the learning experience, because he got a loan. Why work? You can pay it off after college, up to $50,000 a year, because everyone makes millions when they are done with school!

If I sound bitter, I very well may be. However, I am more upset with myself. Let’s just say karma sucks.

Credit Life and Disability Insurance/Debt Cancellation, some of the most overpriced crap in the world. One employer I worked for operated for two years violating a state law in regards to full page disclosures of the individual’s right to decline the option with a loan. Since this product was, at the time, classified as insurance, it fell under the rules of the insurance regulations in that particular state. This state required a full page separate disclosure and option to decline. After they got caught, one would assume they’d stop and follow the rules? Nope, they changed the product to debt cancellation, written into the contract itself and no longer falling under the classification of insurance to avoid having to provide the full page disclosure. Now it is a tiny little section. The whole game was about people who do not pay attention to what they sign or pay for. Loan Officers were routinely trained to use the phrase “fully protected payment” when quoting a payment amount. This payment included the above options, and if there were no additional questions, they got both. Anyone could cancel at anytime, and there payment would be reduced, but less than 19% ever did. I remember running the reports, they were called Ops reports, one analyst used to jokingly call this one the Oops report. I also remember when I had to audit everyone who had this product in that state, because they were placing the credit life product with people who were too old to even qualify for it (over 65). We provided complete refunds, if they asked. The notice we printed, which fit the mold of all other bank disclosures, provided instructions on how to get it and request how you wanted it. We didn’t want to just assume you wanted a check or credited back to the loan with an interest adjustment, that’d be silly.

Overdraft fees are also the biggest crock ever, as is check clearing structuring. Almost all banks take all of your checks that will clear in that day and clear them highest amount, to lowest amount. We do this to provide you with a great service, since we have your back. We want to make sure that your large payments get paid first. Because, if your mortgage check bounces, holy crap! You’ll be kicked out tomorrow! So instead, we’ll only bounce and send back those five other, smaller amounts, which would have cleared if we had done it as they come in, because they clearly aren’t as important. And you know what? Just forget that whole silly returned check thing, we won’t send them back, we’ll just go ahead and overdraft your account so you don’t have to deal with those embarrassing situations. There is only a small fee for each item, regardless of amount, that causes you to go in the red. We’ll go ahead and tier this fee based on the number that you have, so we don’t punish the people who never use it. And you know what, we’ll even do this with ATM and debit card transactions, because that can be even more embarrassing! Imagine being with friends and then going to an ATM with them. You punch in your PIN and you are denied because you have no money! Right in front of everyone! I’d be horrified and never go out in public again! Clearly, this isn’t a loan or line of credit and because of that, we are under no obligation to disclose it to you like other loans or provided you an option to opt out. It’s merely a service. Oh, and, don’t forget to pay this surprising negative balance because of small math error you made, in 3 days, or we’ll start to charge you $7 a day. Don’t even think of asking our branch manager’s for a refund, they are deducted from the branch P&L after we add on what is essentially a surcharge to it, to punish these evil money giving managers further. These fees are completely justifiable too. It takes us many man hours to charge these fees, and someone had to pay the software engineers. Plus, it is the only way we could give you free checking and $100 for joining our lovely family. Checking accounts cost an average of $80 to setup. Well, $180 if you count that free gift. Which you have to pay back if you leave early. So, make sure you spend it right away. And don’t go thinking that free checking is just to get you in the door so we can market you other products and charge you some of these fees. Although we do know that if we get you to sign up for at least three products and start your direct deposit to your new account, you are much less likely to leave your new family.

These things obviously aren’t huge, but, I wish you all could have been in some of the meetings I’ve had. You’d throw up. And, these are only two items. Everyone knows how many products banks have.

I really do believe in personal responsibility. I have seen people who clearly abuse the system and know what they are doing. But most of the people have just fallen on bad times, usually because of something completely out of their control. Financial Institutions pride themselves on non-conventional revenue and inappropriate indirect cost offsets which basically come from jabbing a knife and twisting in a situation like that, or when you have had lapse in judgment or just made a mistake.
I’m sorry this turned into a rant, lol. That seems to be happening these days. I’m really just mad at myself, but you can’t change the past.

[jp2861]

There definitely needs to be some regulations put in place. I think that would be one way to control credit issues for the average consumers. I'm sure many would be in disagreement with that though. I think the banking community has way too much power and influence. In a free market environment I can see their point. But when it comes to sneaky practices, one would assume that there would be some guidelines put in place from our government. But, then again, when we're being governed by a body that goes further in debt to the tune of $1.5 billion per day, that's asking a little too much. The bottom line is that the consumer is on his/her own. The banks and lenders will continue to operate the way they do, with nobody stepping in. Maybe after the smoke clears from the mortgage crisis someone will think about making some changes. I say that with little hope, though. If the banking community has the power to affect changes, such as the BK changes, I doubt anyone will challenge them.

[chpxiii]

I resent your implying that I can't handle my finances. You need to understand that not everyone mishandles their finances. Life happens. Some have gotten ill and couldn't work. Others have lost spouses unexpectedly. You don't know all the stories and they are all different. Don't be passing judgment on everyone else just because you made some bad choices.

[deletia]

I don't do politics so I am bowing out of this conversation, but in the future, be careful about generalizing until you know all the facts. Your situation is not the same as mine.

HERE! HERE! Way to go Granny! You said it better than I did. This is what I was trying to say.