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| Authored by: Anonymous on Sunday, January 06 2013 @ 04:59 AM EST |
>I have complete sympathy for the people who got taken in (I can totally see
how easy it would be to fall for it), but in the end, they were unwise.
They might have been unwise, but for those who want to live the American dream,
of working hard, and owning your own home, it seemed as if their dream was about
to come true. And for some of them it did.
One factor that most people ignore, is that the monthly mortgage payment was, at
least initially, substantially less than the rent that the person was paying.
Would you rather pay US$400 a month mortgage, or US$800 a month to rent an
apartment? Four years down the road is long time to consider, and who knows what
rents might go up. In the meantime, one might be able to hang onto the house
one purchased.
Lose a job, and things get very rough, very fast.
The adjustable part of the mortgage goes up, and things get very rough, very
fast.
What happened in the sub-prime market, was that people lost jobs in droves,
whilst interest rates went up. The low-level of born to be foreclosed upon
mortgages suddenly sky-rocketed.
>In the end, the mortgage companies were also foolish, because they got hurt
badly in the end.
They were taking advantage of laws that enabled them to generate more revenue,
in the short term, by being financially irresponsible, than by being fiscally
prudent.[ Reply to This | Parent | # ]
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