Category Archives: Foreclosure

Job Bias and Credit Bar

5-par-appendixes_html_m54969513Takoma Park These days a working stiff, or worse, someone trying to desert the vast army of the unemployed and pick you a pay envelope again, seems to be screwed in different was almost every day.  Today’s news details how the unemployed are being penalized in getting jobs…uh, largely because their unemployed, and not surprisingly are having credit problems.  The notion that the credit rating companies with their long records of abuse and misinformation are now arbiters of employed is enough to send all of us back to our beds!

An article in the Times pointed out one or two states that have moved to ban or restrict this practice, and, god darned, if I didn’t have to work for a living, I would move to Hawaii as well, all of which means our work…or lack of it…is cut out for us.  Regardless, look at these quotes:

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No Home Loans for Self-Employed

taxidriver_wideweb__470x310,0 New Orleans The draconian back door assault on citizen wealth continues as the impacts of new credit rules ripple through mortgage market and deny motivated – and qualified – buyers access to loans.  A quote in the Times today is revealing:  “Stuart Fraass of Guaranteed Rate Inc. ‘If you’re self-employed, you have virtually no chance of getting a mortgage now.’” Does this matter:  Hell, yes!  There are 20.4 million American workers that are self-employed!

In recent years sitting across the table from banks and sub-prime lending companies, we had this argument frequently over what was called “stated income” loans (I cover this at more length in my book, Citizen Wealth). Stated income allowed the potential borrower to prove their income in a variety of ways that substituted for the simple and standard W2 that a direct employee could provide.  This allowed tipped employees as well as self-employed workers to prove their incomes without W2’s.  The fact that many of the companies did virtually nothing to supervise the broker networks “manufacturing” of stated income loans was the problem (New Century had half of its portfolio in stated income loans right before the collapse!), not the existence of the loan itself.

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