A growing number of families like the Philbrooks are paying a high price to ditch unscrupulous financing and hold on to their homes. Others are walking away with nothing as the real-estate market slides locally.
Of course, it's the fault of "unscrupulous financing," not "punchdrunk borrowers" or "careless fools."
I borrowed too much and I don't make any money... It must be somebody else's fault.
Yeah, that's it. They enticed me!
Fools and their money are soon parted!
I agree with you about the accusatory title: It blames lenders for borrowers' mistakes. Creative lending can be a great thing for people who calculate their capacity to pay if the rates go up. If people don't crunch the numbers, that's their mistake. In fact, the article itself makes it pretty clear that the borrowers took a risk, apparently without thinking it through enough.
Well, the finance companies can be unsrupulous and the borrower can be stupid at the same time. I don't think rational business person thinks that these kind of lenders are good for the economy.
I bought my dream Bell Jet Ranger II thinking my five jobs would pay for it. It was a real babe magnet, too. I could zip to work or the theater right over all the traffic. Damned if the cost of fuel and helipads and the loss of two jobs didn't dash my dreams. Damned Bush economy! Damned financiers!
Well yes and no.
It's easy to say they're at fault, should have read the fine print and so on - yes, indeed they should have. The article states their Realtor gave assurances they trusted about rate changes and of course they wanted to believe that.
However, such ridiculously easy to obtain mortgage funding is only a step away from loan sharking IMHO, do the loan companies truly believe borrowers like this can repay over the long term ? No, but they don't care, they'll just sell the note anyway.
Despite the slogans, can Realtors be trusted or are they too just in it for their own gain ? Recognising of course that the Realtor most often acts for the seller.
Most first time buyers don't know much, I know I didn't, but back when I bought my first you had to have a down payment and meet seemingly firm tests about income etc to qualify, that is all out of the window these days.
Stories like this couple's will be very common quite soon, more's the pity.
I wonder is Sacramento's high taxes has anything to do with its housing decline?
The fault is on both sides. These people were careless to be sure, but they were also lied to.
This sort of thing will wind up getting laws passed that will limit the financing options for the competent, too.
>>Of course, it's the fault of "unscrupulous financing," not "punchdrunk borrowers" or "careless fools."<<
Actually, it's the responsibility of both. But sadly, as a taxpayer I have a niggling feeling this is gonna cost me in the end.