zerohedge.com / by Tyler Durden / Jul 18, 2017 2:16 PM
According to conventional wisdom, or at least logic, the less income one has the more likely they would be to lie on a loan application due to disproportionate and non-scaled needs to obtain capital as well as the willingness – statistically speaking – to do so at any cost, even if it means lying. And while that would have been accurate 6 months ago, the latest quarterly UBS Evidence Lab survey of consumer credit reveals something surprising.
As UBS’ Matthew Mish writes, “the manipulation of risk estimates appears to be continuing for non-mortgage consumer loans. Specifically 26% of respondents (vs 25% in Q1) describe the factual accuracy of their loan applications (student, auto or card) as inaccurate.”
Translation: while the overall percentage of potential “cheating” borrowers is increasing, the chart below shows the unexpected finding is that while the proportion of those making $40-$99K in June responding their loan applications were inaccurate declined from March 31 to June 30, the percentage of respondents in the $100K and higher bucket spiked from 20% to 24%, which means that the wealthiest Americans are – as of this moment – as likely to lie on their loan applications as those making as little as $40K. Just as disturbing is that the incidence of lying on loan applications among the “richest” bucket Americans has jumped by far the most YTD, from 17% at the start of the year to 24% currently.
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