Quote:
Originally Posted by tricia1218
It amazes me the lack of personal responsibility some homeowners seem to have. You know what you can afford, if you make 30k you should be suspicious at being prequalified at 450k with no money down.
And does no one read their loan terms??!? I had an 80/20 loan and it could not have worked out better.
I heard my hairdresser complaining that she didn't refinance in time and her rate was going up and they would have trouble paying their mortgage and had calls into a state agency to help her and her husband refinance at a lower rate and no closing costs, then in the next sentence she was talking about renting out her condo once the new loan was in place and buying a house? I was amazed she messed up once and was being helped out and was going right back in.
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My sense is that it was really more about the brokers and regulators.
There were a number of investment vehicles that were clearly targeting buyers that were not qualified for a particular mortgage. Some of the vehicles actually required payments that did not even meet the intrest rate for the loan and the principle increased over time.
I am sure that the brokers would convince the buyers that the value of the property would go up and that they needed to own to create personal wealth.
I think that there are a number of uninformed buyers who don't know what they are doing in this world. But, IMHO it is the fault of the banks and regulators in allowing investment vehicles that target unqualified borrowers. Years ago, when we bought our house, there were strict income requirements, debt caps and limits on mortgage affordability. This was done as a basic requirement to sell the loans to Freddie Mac and Fanny Mae...not an issue these days; my cat can probably qualify for a mortgage.
Jetskier
