re: Dealerships Forging Income

quote:

---

I don't THINK it happened. I KNOW it happened.

---

Stout's right. It didn't happen then either. Banks had underwriters that reviewed the appraisals and they definitely would catch this type of fraud on the reg. The biggest problem was no income no asset loans. I saw people approved for loans that had no business getting loans. Fannie and Freddie underwriting programs that would give approvals and if the borrower supplied documents to support the info they submitted then they could get the loan. The fraud was committed by the buyers and the loan officers. With most of it committed by the borrowers.

That side of it isn't where the damage is being done.

The problem side is the customer who comes in making $1100 a month at the local burger joint, with a 530 credit score. Then, miraculously, they get financed on a new Charger at 18% interest. Now, over half of their true income is going to a car note and insurance. A lot of times, this is a note that they never should have been able to contract for.

I'm pretty sure that the regulations are already present.

quote:

---

Most people don't realize that millions of Life Insurance policies are written every year without physical inspection, blood work, urine or even a phone interview.

---

Yep. If the the face amount is under 50K. Any thing over 50k gets much greater scrutiny. There is also a 2 year contestability clause that if the insured dies with in the 2 years the insurance company has the option to not pay and believe me they will not pay.

quote:

---

They literally TAKE THE WORD OF THE WRITING AGENT and do a quick scrip check.

---

Who in turn literally takes the word of the applicant.

Mike- I assure you that their were specific subprime lenders that kept lists of "friendly" appraisers that could "get the value" that the mortgage lender wanted so that the loan could sail through "friendly" UW and "friendly" (self)funding. People who would happily get very creative with the comps to ensure they kept those appraisals coming. Every step in the process was covered. And everybody got paid. In fact, there was an outfit in Louisiana that specialized in this. Legit lenders and appraisers suffered because of these idiots.

quote:

---

Yep. If the the face amount is under 50K. Any thing over 50k gets much greater scrutiny

---

I can give you a half dozen Insurance carriers off the top of my head that will write SIMPLIFIED policies up to250k- 350k range. Some carriers have shockingly low UW standards other than a Scrip check. I'm talking 250k, 50 year old smokers, being approved with a simple Scrip check. Some do phone interviews, some don't. Some do DL checks, others don't. Some verify high-risk professions, some don't. The writing agent has a LOT of discretion in how the application is presented and a lot of carriers don't do nearly the due diligence you assume.

I would guess that there are hundreds of thousands of Americans who have accidental only death policies that some agent told them was "Life insurance". I would guess millions of Americans hold "redundant" Disability policies that won't pay.

The two year contestability would definitely apply. But what side has the odds? The odds of any individual dying within the first two years is slim and so unscrupulous agents will fudge things to get a policy approved and get that commission. Knowing that if a guy dies 12 years down the road the policy has a 99% chance of being paid. Of course if the applicant dies in the first two years, the agent could be in a world of hurt, but some agents being greedy and slimy, are willing to gamble with their careers to get that commission. They are in and out of the gig in a year or two anyway.

I'm just telling you man, there is and has been corruption in almost every industry. A doctor told me recently that doctors are getting so little time with patients with all that Obamacare patient questionnaire bullshite that they do it later after the patient has left and sit down for three hours and randomly fill all that crap in. That's anecdotal, so I don't know if it's true, but it makes sense.People cut corners to make money. In some organizations it is pervasive, in others rare.

quote:

---

assure you that their were specific subprime lenders that kept lists of "friendly" appraisers that could "get the value" that the mortgage lender wanted so that the loan could sail through "friendly" UW and "friendly" (self)funding. People who would happily get very creative with the comps to ensure they kept those appraisals coming. Every step in the process was covered. And everybody got paid. In fact, there was an outfit in Louisiana that specialized in this. Legit lenders and appraisers suffered because of these idiots.

---

I am not saying that it didn't happen but you are painting with a wide brush and yes legit people did suffer.

quote:

---

I can give you a half dozen Insurance carriers off the top of my head that will write SIMPLIFIED policies up to250k- 350k range. Some carriers have shockingly low UW standards other than a Scrip check. I'm talking 250k, 50 year old smokers, being approved with a simple Scrip check. Some do phone interviews, some don't. Some do DL checks, others don't. Some verify high-risk professions, some don't. The writing agent has a LOT of discretion in how the application is presented and a lot of carriers don't do nearly the due diligence you assume.

---

I am well aware of them. I work in the business. The insurer knows the risk and that's why the insured will be paying a higher premium.

quote:

---

I would guess that there are hundreds of thousands of Americans who have accidental only death policies that some agent told them was "Life insurance". I would guess millions of Americans hold "redundant" Disability policies that won't pay.

---

I am sure there are but to lay all of blame on the agent is unfair. It's not the agent's fault if the applicant doesn't know what coverage they have.

quote:

---

The two year contestability would definitely apply. But what side has the odds? The odds of any individual dying within the first two years is slim and so unscrupulous agents will fudge things to get a policy approved and get that commission.

---

Not if they are sick.

If your point is that there are some bad apples in all professions then I agree because I have know some of them but to condemn the entire industry is a bit much.

quote:

---

I'm just telling you man, there is and has been corruption in almost every industry. A doctor told me recently that doctors are getting so little time with patients with all that Obamacare patient questionnaire bullshite that they do it later after the patient has left and sit down for three hours and randomly fill all that crap in.

---

I can believe it.

If your really want to see some corruption and fraud check in to the Dentist that accept kids on medicaid here in Louisiana.

I'm NOT blaming entire industries.
I'm simply explaining things that I KNOW to be true, that if you and I were sitting at a table, we would just nod in agreement and move on. The internet allows people to seize on a single word. Let's skip that bullshite, seeing as neither of us and definitely not Stout are "argue for arguments sake" type assholes.

quote:

---

Lsupimp

---

quote:

---

this scenario affects exactly one person...the dude who bought a car he can't afford. Downstream, someone else gets a buy a repo at a great deal

why this is troubling you so I have no idea

---

It affects the bank that extended the loan. Full value on the car is *never* recovered in a repo, not even close to it.

This won't be nearly as bad as what happened with houses a few years ago but certain banks could lose quite a bit.

quote:

---

This won't be nearly as bad as what happened with houses a few years ago but certain banks could lose quite a bit.

---

And....?