This evening I was watching the news and they were talking about the new mortgage guidelines. They really made me go, eh? The first one was proof of income. Um, who in the world is giving out MORTGAGES without proof of income? That’s crazy. The second was proof that the buyers have money set aside for insurance and taxes. Um, isn’t that called escrow? People tell me I’m not average and stuff, but who in the world was giving out such huge sums of money with no evidence of ability of folks to pay a loan? I’d be sort of cautious about even signing up for a loan that required no evidence I could actually pay it. I knew that there were some snarky folk in the mortgage business, but wow and dang.
So THAT’S how the subprime gets down?
2 responses to “So THAT’S how the subprime gets down?”
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I am participating in a volunteer project, helping people with their mortgage problems. I am learning so much about how people have been hoodwinked. For example, one person whose situation I’ve studied to prepare for my project stated her income. The broker then adjusted her income by inflating it, time after time after time, until finally she looked like she could afford the mortgage. Even though her actual income looked nothing like what was on the paper – nobody checked, and nobody knew. She later faced foreclosure. She was old and on Social Security – she never knew what hit her.
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I knew people were doing shady things, but the scope of this is just incredible. The fact that this was allowed to legally go on (Economists are talking about how Greenspan should have dealt with this a decade ago – A DECADE AGO?) is just insane.
TJs Things 
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