Subprime predatory practices.....

[exUte]

that Obama continues to spew. What is the subprime predatory practice he is referring to.

The lenders went out and dragged people into their offices and forced borrowers to borrow money they couldn't afford to pay back?

[ERCougar]

Originally Posted by exUte

that Obama continues to spew. What is the subprime predatory practice he is referring to.

The lenders went out and dragged people into their offices and forced borrowers to borrow money they couldn't afford to pay back?

Yeah, I'm sick of that phrase as well. I took out one of these balloon loans, and I knew very well what the risks were. It's really not that complicated.

For the most part, I think these "victims" were victims of their own greed, not predatory practices.

[il Padrino Ute]

Originally Posted by ERCougar

Yeah, I'm sick of that phrase as well. I took out one of these balloon loans, and I knew very well what the risks were. It's really not that complicated.

For the most part, I think these "victims" were victims of their own greed, not predatory practices.

You are correct. People were willing to exchange a loan they wouldn't normally get for the risk that they couldn't pay it back.

My memory isn't the best when it comes to things like this, but didn't Congress have something to do with pushing lenders to work with sub-prime applicants?

[BarbaraGordon]

Things are often more complex than they seem. While there were indeed buyers knowingly playing the odds, a growing body of peer-reviewed academic studies show that certain demographic groups were deliberately targeted by sub-prime lenders because those demographic groups were known to be least knowledgeable of credit standing, credit options, and long-term consequences of contracts. They were considered a new untapped market for a profit-driven industry. This is what is meant when politicians use the phrase "predatory lending."

The problem is trying to figure out how to help those who were deliberately taken advantage of without offering an "out" for speculators and other financially-secure investors who signed the contracts knowing full-well the risks entailed.

[TripletDaddy]

You white, middle to upper class knuckleheads crack me up.

The term does not apply to you.

It applies to lower income people with crappy credit who already make terrible financial decisions (often not being able to speak English) and have no business qualifying for a loan. In fact, under traditional circumstances, they do NOT qualify for a loan. For those of you in this thread who are referencing the greed of folks who borrowed more than they could repay, please explain HOW they qualified for the loan? Didn't the lender ask how much money these people made? Couldn't they determine that when someone makes $75,000 a year, they should not be extended a $600,000 loan? So why did they go ahead and lend the money?

Lending standards were lax, the brokers gave them the loan anyway, simply to turn around and sell it on the open market a month after closing....knowing full well that the risk of default was sky high.

That is what is meant by predatory lending.

[il Padrino Ute]

Originally Posted by TripletDaddy

You white, middle to upper class knuckleheads crack me up.

The term does not apply to you.

It applies to lower income people with crappy credit who already make terrible financial decisions (often not being able to speak English) and have no business qualifying for a loan. In fact, under traditional circumstances, they do NOT qualify for a loan. For those of you in this thread who are referencing the greed of folks who borrowed more than they could repay, please explain HOW they qualified for the loan? Didn't the lender ask how much money these people made? Couldn't they determine that when someone makes $75,000 a year, they should not be extended a $600,000 loan? So why did they go ahead and lend the money?

Lending standards were lax, the brokers gave them the loan anyway, simply to turn around and sell it on the open market a month after closing....knowing full well that the risk of default was sky high.

That is what is meant by predatory lending.

There's always a victim for you liberals, isn't there?

Yes, lenders gave loans to people who shouldn't have had them. But those applicants still agreed to accept the terms of the loan.

Ignorance is not an excuse.

[TripletDaddy]

Originally Posted by il Padrino Ute

There's always a victim for you liberals, isn't there?

Yes, lenders gave loans to people who shouldn't have had them. But those applicants still agreed to accept the terms of the loan.

Ignorance is not an excuse.

I am not giving it as an excuse. The question was "what is predatory lending?" I believe it was your question, wasn't it?

I expected a more balance approach to this issue from you, in all seriousness. Did you take some Snipe pills today or something?

I can play along, though, if you wish.

This pandemic issue will be best solved if we foreclose on everyone....then we will have many families on the street, but they all will get what they deserve and justice will be served. The large volume of potentially affected families and the negative impact on our economy do not merit special consideration because this national housing crisis is nothing special. All that matters is that people are defaulting, so they should be evicted. Justice is served!

[TripletDaddy]

Originally Posted by il Padrino Ute

There's always a victim for you liberals, isn't there?

Yes, lenders gave loans to people who shouldn't have had them. But those applicants still agreed to accept the terms of the loan.

Ignorance is not an excuse.

And actually, yes ignorance can be an excuse.

[il Padrino Ute]

Originally Posted by TripletDaddy

I am not giving it as an excuse. The question was "what is predatory lending?" I believe it was your question, wasn't it?

I expected a more balance approach to this issue from you, in all seriousness. Did you take some Snipe pills today or something?

I can play along, though, if you wish.

This pandemic issue will be best solved if we foreclose on everyone....then we will have many families on the street, but they all will get what they deserve and justice will be served. The large volume of potentially affected families and the negative impact on our economy do not merit special consideration because this national housing crisis is nothing special. All that matters is that people are defaulting, so they should be evicted. Justice is served!

Actually, my question was whether or not Congress pushed lenders to be more accommodating to sub-prime applicants.

I don't think booting people out on the streets is a good thing, but I don't think we should be bailing out the lenders. I'd rather see those who got the loans forgiven.

Still, an applicant should know that if he can't afford to pay back a loan, he shouldn't accept one. How is that line of thinking wrong?

[TripletDaddy]

Originally Posted by il Padrino Ute

Actually, my question was whether or not Congress pushed lenders to be more accommodating to sub-prime applicants.

I don't think booting people out on the streets is a good thing, but I don't think we should be bailing out the lenders. I'd rather see those who got the loans forgiven.

Still, an applicant should know that if he can't afford to pay back a loan, he shouldn't accept one. How is that line of thinking wrong?

I don't think that line of thinking is wrong. I agree with it. There needs to be a consequence to irresponsible behavior.

That being said, I view this current situation to be an exception to the general rule. This lending crisis will potentially result in the foreclosure of entire neighborhoods in some instances.

One thing I wonder...is it possible for lenders to automatically extend the terms of the balloons an extra 24 months or so....with the provision that borrowers have to be actively engaged in selling the property, etc? This may not work in cases of reverse amorts, but certainly on a pure interest only loan, it is feasible. Maybe some of the economists on the board can weigh in on this one.