Did any one REALLY think that all of the people who were approved for a non-secured mortgage were going to pay their bills? I, personally, am amazed to hear that only 20% of those loans have defaulted.
2007-03-17 00:51:50 · 8 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
yes, well I'm not feeling too sorry for the banks - they took a gamble on this and could have made loads of money (probably still have made loads of money despite the defaults).
I think that this is indicative of the changing attitudes, that it's OK to be in debt, and it's OK not to make repayments when you're in debt. And the financial corporations are encouraging this, by offering IVAs (you probably call them something else if you're in the US, but they're low-fat bankruptcies) to anyone who wants them. The banks win all ways.
2007-03-17 00:58:29 · answer #1 · answered by Anonymous · 0⤊ 0⤋
I dont have too much sympathy for banks.
And yet you find banks some years ago got fined for a practice called "redlining", which is refusing to make loans in certain locations, like the inner city and places like Newark and Camden NJ. The banks were pilloried for discrimination for refusing to make loans in depressed areas. The banks' unsuccessful defense was: these loans are bad credit risks.
Now the mortgage lenders who made loans to poor credit invididuals in the subprime market are being held up to ridicule as predatory lenders which is probably a fair criticisim. But observe that they were doing what the banks previously were fined for not doing: making loans to people who cant afford to pay it back.
2007-03-17 08:07:19 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Banks and other lenders got people into these loans that they could not afford to keep up.
In my Los Angeles neighborhood, condos are going for over $700,000. Some idiot lender preapproved me for $500,000 (I was making $65,000 at the time).
The way he fast talked, it looked like I could afford the payments. However, I've been a homeowner before so I know that you have to account for condo fees, taxes, maintenance, and living.
On top of that, for those who got interest-only, or adjustable rate mortgages, prices are falling now, so refinancing isn't an option.
Be prepared...this will happen again in 10-15 years!
2007-03-17 12:28:21 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Not at all. I work in the Sub-prime loan business and the banks do stupid loans sometimes. I have seen it. What will happen is for a couple of years the lenders will tighten up their guidelines until they have decent portfolios again and then they will loosen the guidelines and it will start all over again. It's a vicious cycle.
2007-03-17 10:50:54 · answer #4 · answered by ? 7 · 0⤊ 0⤋
No I,m not surprised at all the bank took a risk too bad
2007-03-17 12:08:56 · answer #5 · answered by pattibcacl 6 · 0⤊ 0⤋
I am not surprised, so many people in the world are like that.
2007-03-17 13:26:28 · answer #6 · answered by ud 5 · 0⤊ 0⤋
No, I'm not surprised either.
2007-03-17 08:00:30 · answer #7 · answered by Mariposa 7 · 0⤊ 0⤋
will wonders never cease.
2007-03-17 07:56:31 · answer #8 · answered by Old guy 124 6 · 0⤊ 0⤋