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John L asked:
A significant number of people that don’t qualify for traditional home loans accept subprime loans to get into a home of their own, often without understanding that their mortgage will jump dramatically.
A significant number of people that don’t qualify for traditional home loans accept subprime loans to get into a home of their own, often without understanding that their mortgage will jump dramatically.
Lenders, on the otherhand, are making loans to people that can barley make the starting mortgage and will find it almost impossible to make the payment once the mortgage increases.
Many people got into these loans with the expectation that the value of their home would increase and they could refinance, but in the current cool market it’s nearly impossible to refinance.
Again, who’s to blame? A person for taking the loan they can’t afford or the lender that knows that the family will probably lose the house?
Tags: Barley, Home Foreclosures, Lenders, Mortgage
August 5th, 2007 |
Tags: Barley, Home Foreclosures, Lenders, Mortgage
August 6th, 2007 at 7:32 am
Alan Greenspan, for flooding the market with liquidity. When credit is cheap people will borrow.
August 9th, 2007 at 7:15 am
If the lender knew they would probably lose their house, it is their fault. The borrower usually understands what’s going on, and the lender should explain the features of the loan with them. The borrower signs a lot of disclosures and closing documents, usually explained again by their closing agent at closing so definitely has a lot of the responsibility for their own actions.
False or misleading statements made by a lender makes it their fault
August 9th, 2007 at 8:11 am
In my opinion, neither. That’s like asking who’s to blame for heartburn- the chef for making a spicy Mexican dinner or the diner who ordered the meal?
When the market is successful and the stocks are doing well (home builders, lenders, etc), there is room for risk (which sometimes doesn’t go well).
The reasons for default are not the loan amounts, rather the economy for the people with smaller pockets- as Katt Williams said (and I censor), you shouldn’t have to make life decisions at the gas pump! These are the people most affected.
Lastly, the subprime mortgage lenders are not at fault, the buyers are not at fault, but our new Federal Reserve Chairman, Bernanke has taken on a big new role and adjusted rates at a different pace than Greenspan did. Remember, it takes 8-12 months for the effects of a rate change to be fully felt- well, here we are!
August 11th, 2007 at 9:45 am
The predatory practices of the lending companies. I get offers from a company near my home for me to borrow $25,000.00 and would end up paying back about $90,000. people who don’t understand lending that need cash can really get hosed.
August 13th, 2007 at 12:40 am
The lender is in business to make money.The borrower should be able to read and comprehend his agreement.Our schools are to blame.We are terribly undereducated in real world knowledge.We are supposed to fail.We should be so distracted by the daily grind that we don’t ask that question.
August 14th, 2007 at 3:28 am
Everyone has freewill,people should be smarter,they shouldn’t live beyond there means, and they should never take out an ARM on there home, the lenders for the most part are a bunch of bloodsucking scumbags! But if people weren’t so stupid………..
August 14th, 2007 at 10:00 pm
All of the above plus…anyone who takes out a loan on spec doesn’t understand the value of the dollars involved (most home prices are in the monopoly money range and few have figured this out).
The lender is in it for the money and they don’t lose so legislation needs to intervene.
But don’t count on federal involvement because this home buying thing is one more way the middle class is being squeezed out of existence.
If someone can come up with 10 per cent of the value of the home, they may have a chance.
But then there’s health care costs which can ruin a person or family that’s living just on the edge and trying to pay for a home.
A home is a huge investment and anyone considering it needs to research all the facts first.
August 17th, 2007 at 6:53 am
Greedy sellers and criminal real estate salesmen/brokers.
Real estate people are the biggest bunch of criminals I have ever encountered in 35 years as an attorney. They lie, cheat, steal and encourage buyers to submit falsified loan documents in order to get their commissions. The 10 years I spent putting realtors in jail was the best I ever spent.
As the market collapses (as it will over the next 30 months) and you ask yourself “How did this happen?” you only have to ask yourself 1 question - “Who benefitted?” In every case, it was the real estate swine who couldn’t care less about the consequences of their deals, they just wanted their money.
August 19th, 2007 at 9:12 am
Human nature is too always want more than you can afford. The big mortgage lenders can approve or deny home loans based on the buyers credit, but if they deny they risk losing the mortgage to a competitor. The last 10 years has been a free for all in the mortgage/real estate markets for lenders. If you breath, you’ll get approved. The creative ways they are financing people also hurts, like interest only loans. The lenders could care less if you make your payments in hot real estate markets. Basically they can turn around and sell the house at auction after forclosure and still turn a profit.
Problem is recently the real estate markets are soft, and people who couldn’t make payments - can’t refi, and lenders are getting stuck.
My answer is both, the buyer and the mortgage lenders. It’s good old capitalism at it’s best.
August 20th, 2007 at 6:03 pm
Cardinal forgot to credit Greenspan’s boss. That was Bill Clinton, for all of you who have forgotten.
August 23rd, 2007 at 11:32 pm
The lender is to blame.
August 25th, 2007 at 12:43 pm
The Realtors for making the bubble. This is how they did it.
Then the scum mortgage people.
May they get ten time of everything they deserve , let there conses decide if that is a curse or blessing.