Risky Borrowers Find Credit Again, at a Price
Industry consultants, in their attempt to feed the demand for finer classifications of borrowers, have coined new labels to describe different borrowers with similar credit scores.
One is “strategic defaulters,” whose credit scores were damaged because they walked away from a home when its value dropped below what was owed on the mortgage. These borrowers made a bad bet on real estate but may otherwise be prudent risks because they make a good living.
Similarly, “first-time defaulters” once had a strong credit record but ran into financial trouble during the recession. Typically, these borrowers fell behind on some sort of loan payment after losing a job, not from taking on too much debt.
By contrast, there are “sloppy payers,” who pay only some bills on time; “abusers,” who are defiant about paying; and “distressed borrowers,” who simply do not have the means to pay.
The goal is to weed out the latter groups to identify consumers whose credit scores are blemished but who still have the money to pay their bills.
Boldfaced emphasis added by me.
Now wait one damn minute here.
It’s clear that “strategic defaulter” is code for “crooks like us.”
What really pisses me off is that the banks doing this fall into the last group:
“distressed borrowers,” who simply do not have the means to pay
Which is why we were suckered into bailing them out!
Does the corruption in this country ever come to an end?