Correction: People who “COULD” pay it back but chose not to!
Im in the mortgage biz, banks did not voluntarily give people loans they knew could not afford. They were forced to do so in most instances under community lending guidelines. Most of the loans were still loans that people could afford to pay, even if the rate was adjustable.
Problem is, the people didnt sacrifice the luxuries in an effort to constinue to pay mortgages.
Im in the mortgage biz, banks did not voluntarily give people loans they knew could not afford.
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BS! In most cases it was the loan officers modifying (falsifying) the income and expense data on apps/HUD-1’s to get people qualified ... and even if it came from a broker the banks still knew of and failed to stop the fraud because they were only in it for the quick 5% commission or such passing the known bad/fraudulent loan onto the end buyer of the product Wall Street was crafting out of it.
I know of dozens of instances where Mexicans , without SSN’s! churned cheap homes , selling them to relatives over and over every 6-12 months ,, never making even payment number one and dealing with the same broker and/or bank again and again ,, taking a 1100 sq. ft. $60k duplex to over $200k and then fleeing to Mexico with the cash or simply not using that name again ...