Why are people arguing that we should "go after the subprime lenders?" Why are we preventing foreclosures? That will raise borrowing costs for the rest of us.
2007-08-09 03:43:48 · 18 answers · asked by truthisback 3 in Politics & Government ➔ Politics
Given - "uninformed about how mortgages work" ???? The disclosure requirements are very thorough. I know there are some stupid people out there but.......
And you're assuming that these firms lend money to people whom they know won't be able to repay - - - that makes no sense. The return on a consumer loan is much greater if the consumer simply repays than if the lender forecloses - the excess collateral value typically does not cover the costs to collect. The lender is rarely made whole.
2007-08-09 03:53:06 · update #1
It is more of the same rhetoric...blaming anyone but joe public for his poor choices and spending habits. If someone abuses a credit card, it is no one's fault but their own. If they cannot pay the interest charges or make the minimum payments, their credit rating will be negatively impacted....again, no one's fault but their own. Its time Americans took responsibility for themselves and their choices.
2007-08-09 03:49:05 · answer #1 · answered by Super Ruper 6 · 3⤊ 3⤋
No argument here. I wanted to own a home long before I could afford to do it. But I waited until I was able to afford it. Also when we did go in to get preapproved we were approved for a lot more than we actually borrowed..why...because we used common sense and thought about it. We knew that we would have trouble paying our mortgage if something happened to one of our jobs if we borrowed at the amount that we were approved for.
Those who say that the people didn't understand the terms or the mortgage please quit allowing people to claim ignorance. All the need to do is some research and reading. On an endeavor as large a buying a home I hope you are smart enough to think through what you are getting yourself into.
2007-08-09 10:59:53 · answer #2 · answered by Hockeyfan 4 · 2⤊ 0⤋
Yes. People need to take personal responsibility for their problems. Every inconvenience seems to be someone else's fault. I myself am over extended and have trouble paying my bills. It's no one's fault but my own.
If people are stupid enough to buy a house that they have no business buying because they can't afford it, that's their own fault. Not the Big Bad Lender. No one forced them to sign on the dotted line and promise to pay it back. They are the ones who made the mistake and have to suffer the consequences of it and hopefully learn from it. They will just have to rent for a while until they save up for another downpayment and clean up their credit. Worse things have happened to people. They can still be homeowners after a few short years. It's not like they are being horse-whipped and thrown in prison.
Foreclosures should not be prevented. They help other (smarter) low income people get a house. They have the opportunity to buy a nice house at a reduced cost. The bank resells the house at the loan payoff price, or holds an auction to recoup some of their losses. It's all a cycle and blocking or breaking parts of the cycle derails the whole market, causing crashes.
2007-08-09 11:24:43 · answer #3 · answered by hottiecj *~♥~*~♥~* 4 · 1⤊ 1⤋
It is that person's fault however also the fact that more people get adjustable rates because it is pushed more by mortage broker.
People see that they might pay less one month for their loan, however that is not always the case because when the rates go up they are paying much more.
My Brother works as a loan underwriting for a large bank. He see's this everyday. The people are at fault however the brokers are also at fault to because they get paid on commision and they are more often then not, looking to make a buck then get make sure that the people taking the loan can afford it. They are sales people just like a car salesman. They are going to do everything they can to get you to sign.
Also you have to look at the fact that restrictions were a lot looser with the housing market booming so people were getting loans left and right.
2007-08-09 11:33:00 · answer #4 · answered by Anonymous · 1⤊ 0⤋
Part of what is being investigated is whether or not predatory practices are being used, and that needs to be dealt with. For example, misrepresentations about "teaser" rates or whether or not incomes are falsified by lenders to get more money approved. People are responsible for their own choices, but they shouldn't by misled. That's just plain illegal.
As for raising borrowing costs, you've got it backwards. Having all these foreclosures is limiting the amount of funding available and making it much more difficult and expensive to borrow. Have you seen rates lately?
2007-08-09 10:59:57 · answer #5 · answered by Jeff P 2 · 0⤊ 1⤋
In general, yes it is. And trust me, it's a lesson that these borrowers won't soon forget. The debt is not forgiven and their credit rating will be in the crapper for years. So the 'system' goes after them.
However, the lenders are not blameless. If you go to an attorney and he gives you bad advice, whose fault is it? Is the attorney blameless that you took his bad advice? You look to him as the professional, the guy who 'knows'. Most folks buy a house rarely, often just once in their lives. It's difficult to impossible for folks to be as informed as they should be. That's one of the reasons that they're going to a professional in the first place. If a 'professional', someone who deals in this industry every day, five days a week, tells them that they can afford something that they really cannot or does not adequately share the pros and cons of a certain product, that's wrong and misleading information.
Bottom line, both sides are to blame and both sides are paying, but if you're a 'professional', a heaping helping of responsibility goes with that title.
2007-08-09 10:57:59 · answer #6 · answered by The emperor has no clothes 7 · 1⤊ 2⤋
The big problem is the liquidity of the lenders. If lots of folks are defaulting on loans, the lender will be in deep trouble. The lenders need to tighten up on who they loan money to.
2007-08-09 10:55:57 · answer #7 · answered by iwasnotanazipolka 7 · 1⤊ 1⤋
Because the subprime lenders are jeopardizing the whole economy just to make a fast buck. Or haven't you been paying attention?
When foreclosures go up, ALL homeowners suffer, not just the ones who were foreclosed.
2007-08-09 11:02:10 · answer #8 · answered by Anonymous · 1⤊ 2⤋
I agree with you in general however in the rare case that the lenders / brokers were misleading then I'd say go after the lender.
2007-08-09 10:48:46 · answer #9 · answered by Anonymous · 3⤊ 1⤋
another way to look at it is...why prey on the poor? Does it really make fiscal sense to make people who can't pay their bills...pay MORE? How about we start MAKING people responsible by not extending credit to those with bad credit history, and not allowing bankruptcies (which raise borrowing costs ALREADY for the rest of us) to get out of paying your bills? THAT would be conservative. Taking advantage of the poor is NOT conservative, or morally just.
2007-08-09 10:50:27 · answer #10 · answered by Anonymous · 2⤊ 2⤋