Credit Ratings

Refinancing today is not the same game it was a few years ago, when homeowners with even a modest amount of equity and just so-so credit could score a great loan. You now need good credit, lots of equity and very little outside debt. "These are very traditional lending standards, but they're going to come as a shock to anybody who has only been in the market for the past 10 years," said Keith Gumbinger, vice president of HSH Associates, a Pompton Plains, N.J., publisher of loan information.

California's bond rating was downgraded below that of every other state Tuesday by a major Wall Street rating agency, as lawmakers trying to resolve the state's financial problems faced growing resistance from powerful interest groups. Citing the state's prolonged budget impasse and its nearly empty treasury, Standard & Poor's lowered its rating on $46 billion in general obligation bonds, which investors usually consider one of the safest investments because they are backed by taxpayers.

Proposals to limit executive pay are flying fast and furious in the wake of public furor over retention bonuses paid to executives at American International Group Inc. But here in the capital of capitalism, business leaders and compensation consultants maintain that restricting executive pay could cause more harm than good. The best and brightest business leaders would flee, they contend. Financial results, and ultimately stock prices, would suffer.

Hoping to buy his first home this year, Ralph Bustamante paid off his credit cards and cleared dings on his credit report to ensure that he'd be able to get a loan. Bustamante had hoped to pull his FICO scores, used by most lenders as a standard of creditworthiness, from the three major credit bureaus so he could negotiate the best possible mortgage rate. Make that two credit bureaus. One of the companies, Experian Group Ltd., will stop selling FICO scores to individual consumers Saturday.

Ryland Group Inc.'s credit ratings were cut to junk by Standard & Poor's, which said the move reflected "very weak housing conditions" and the Calabasas home builder's limited liquidity.

The chilling realization that some things in high finance will never change, notwithstanding the current crisis, came to me the other day when I discovered that the Federal Reserve would accept only AAA-rated securities as collateral for its new program to finance consumer loans. On the surface this seems only prudent -- after all, what could be more gilt-edged than paper given a top investment grade by two of the three most-recognized credit rating agencies, as the Fed demands?

Saying it had expected Univision Communications Inc. to gain more on the sale of its music division, ratings agency Standard & Poor's this week downgraded the corporate credit ratings of the Spanish-language media company to a B-minus from a B. Univision last week announced it had reached an agreement to sell its music division to Universal Music Group for $153 million, of which $113 million is due to Univision upon closing.

California Treasurer Bill Lockyer is embarked on a little-noticed, nerdy but noble crusade. He's trying to stop Wall Streeters from gouging state and local governments. That means state and local taxpayers. They're the ones getting fleeced when their governments issue bonds -- borrow -- to build roads, schools, water facilities and other public works.

More than 160 million Americans would be able to learn their all-important credit scores at no charge -- and with no strings attached -- under a settlement by credit reporting giant TransUnion Corp. of a long-running class-action lawsuit. The agreement would entitle consumers to at least six months of a TransUnion monitoring service, giving them access to the latest information in their credit reports as well as their current scores at any time.