Yup. I have been told I have no chance to refinance because I am self-employed. My employees have no problem though!
Feb 4, 12 8:34 am ·
·
It's probably not as weird as you think if you understand what is happening in the world right now. All of the large banks are basically broke and are struggling daily to maintain their balance sheets. If you can put yourself in the shoes of a bank, customers appear look much different from that perspective. Somebody who carries a large debt is actually an asset to the bank. Even more so if they have a low credit score because that means higher interest rates (i.e., more income for the bank) and possible extravagant late fees. A person who struggles with bad credit, sometimes paying late (but always paying something) without ever paying down his/her balance is a perfect customer from a bank's perspective. A debt slave basically.
In contrast, someone who actually pays down their balance promptly (or even worse, early) is actually not very attractive because as that balance is paid down, in effect, the bank loses an asset. It makes a lot more sense when you realize that your debts are assets to banks and, right now especially, banks are under huge pressure.
This is also why many foreclosures are moving so slowly. If properties are actually foreclosed and forced to be sold (and probably at a loss in the present market) then the banks are forced to acknowledge those loses on their balance sheets. Even if those McMansions will never regain their value, the banks simply can not afford to take the hit on their balances right now.
HandSum I love your logical, direct post, followed by the yo!
It's good to remember this: your credit score is not a sign of how good you are at handling money. It's a sign of whether or not a lender is likely to make money on you. If you pay off your balance in full every month, the bank doesn't want you.
Talk-show-financial-guru-types have benefited from drilling into our consumer brains that our credit score has to be high, because it's a reflection of our value as a human. That's not true; it's a reflection of how likely you are to make money for someone else.
I think this is one of the issues driving the "move your money" campaign. Credit unions are member-owned and don't play the same ruthless games as the big banks.
The original bank bailout was intended to provide banks with cash so they could continue lending money to private entities (keep the economy going and shit). The banks took the opposite approach. It's what happens when savings and loan is allowed to merge with investment operations. Bonuses are much higher for the later. As is risk.
It's why I was originally excited about the Occupy movement. Identifying the root of the problem; just follow the frigging money trail. It, sadly, never reached its full potential.
As long as banks continue doing this, expect our profession to be in the crapper. Almost all construction projects need money from the banks.
Perhaps we need to explore options in providing derivative based design services. Banks would jizz themselves over that one. Goldman Sachs would bet against successful completion of any project, and would purchase large quantities of Chinese dynamite to ensure this is so. Yo!
Feb 4, 12 3:39 pm ·
·
From the Ambrose Evans-Pritchard at the Telegraph:
"While the banks are buying more sovereign debt, they are cutting credit to the rest of the economy, with falls of 2.4pc in Italy and Portugal in December, and 0.8pc for the eurozone as a whole.
an example of the credit mess
http://www.kahunaburger.com/2011/12/29/america-i-really-dont-get-it/#comment-47297
its the american way...........
Yup. I have been told I have no chance to refinance because I am self-employed. My employees have no problem though!
It's probably not as weird as you think if you understand what is happening in the world right now. All of the large banks are basically broke and are struggling daily to maintain their balance sheets. If you can put yourself in the shoes of a bank, customers appear look much different from that perspective. Somebody who carries a large debt is actually an asset to the bank. Even more so if they have a low credit score because that means higher interest rates (i.e., more income for the bank) and possible extravagant late fees. A person who struggles with bad credit, sometimes paying late (but always paying something) without ever paying down his/her balance is a perfect customer from a bank's perspective. A debt slave basically.
In contrast, someone who actually pays down their balance promptly (or even worse, early) is actually not very attractive because as that balance is paid down, in effect, the bank loses an asset. It makes a lot more sense when you realize that your debts are assets to banks and, right now especially, banks are under huge pressure.
This is also why many foreclosures are moving so slowly. If properties are actually foreclosed and forced to be sold (and probably at a loss in the present market) then the banks are forced to acknowledge those loses on their balance sheets. Even if those McMansions will never regain their value, the banks simply can not afford to take the hit on their balances right now.
Yo!
HandSum I love your logical, direct post, followed by the yo!
It's good to remember this: your credit score is not a sign of how good you are at handling money. It's a sign of whether or not a lender is likely to make money on you. If you pay off your balance in full every month, the bank doesn't want you.
Talk-show-financial-guru-types have benefited from drilling into our consumer brains that our credit score has to be high, because it's a reflection of our value as a human. That's not true; it's a reflection of how likely you are to make money for someone else.
Donna
In that credit score = degree of self responsibility - according to the "experts"
I think this is one of the issues driving the "move your money" campaign. Credit unions are member-owned and don't play the same ruthless games as the big banks.
The saddest 'Yo!' ever.
The original bank bailout was intended to provide banks with cash so they could continue lending money to private entities (keep the economy going and shit). The banks took the opposite approach. It's what happens when savings and loan is allowed to merge with investment operations. Bonuses are much higher for the later. As is risk.
It's why I was originally excited about the Occupy movement. Identifying the root of the problem; just follow the frigging money trail. It, sadly, never reached its full potential.
As long as banks continue doing this, expect our profession to be in the crapper. Almost all construction projects need money from the banks.
Perhaps we need to explore options in providing derivative based design services. Banks would jizz themselves over that one. Goldman Sachs would bet against successful completion of any project, and would purchase large quantities of Chinese dynamite to ensure this is so. Yo!
From the Ambrose Evans-Pritchard at the Telegraph:
"While the banks are buying more sovereign debt, they are cutting credit to the rest of the economy, with falls of 2.4pc in Italy and Portugal in December, and 0.8pc for the eurozone as a whole.
...
"December saw the largest contraction in the provision of credit to non-financial corporates in the history of the time series. The flow of credit relative to GDP is now contracting considerably faster than in the midst of the post-Lehman phase".
Yo!
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