Originally posted by: Vic
Originally posted by: Dari
Originally posted by: Vic
Originally posted by: LegendKiller
1. As people moved down-credit, they began selling mortgage products not offered to lower-income down-credit people before. All of the "infamous" products you hear about now had perfectly legitimate uses. No/Low doc loans were for self-employed people who don't have W-2s, but have good credit and income. Option Arms are for people who have low monthly income, but high bonus income. ARMs were for people who were match-funding their houses, they were short-term owners and short-term fixed rate borrowers.
All of these uses had long-term historical information that worked well. However, as the products concentrated in FL, NV, and CA, and went down-credit, then the validity of historical information went out the door.
Finally! someone else sees this. Thank you.
"Predatory lending" is not a product. It's selling someone the wrong product. All of these loans had legitimate purposes for the right buyer, most of them had been around of decades, it's just that they were never intended to be used the ways that they were.
Who, in theory, would want a mortgage that increased after a couple of years? Perhaps there is a market for something like that but I think only the gullible would take it.
You seem to have a habit of having something explained to you clearly, and then rejecting that reality on the basis of nothing but personal prejudice. It's annoying and makes you look stupid.
I'm totally a no-fee fixed rate and term kind of guy myself, but even I can understand why some people -- completely intelligent people who know exactly what they're getting into -- might want something a little "outside the box," either due to financial need, benefit, and/or desire to take a risk.
Anybody not gullible enough to purchase these types of mortgages are instead labelled as "investors." NINJAs, flippers, or realty speculators are playing a game that can just as easily blow up in their face and they're left holding millions of dollar in property that they can not even pay the interest on. Some people will call that gambling or risk-taking, but, tell me, who on earth goes to Las Vegas to become rich? The truth is many go there for fun, not to beat the house, which is very difficult to do. So, in the end, these "investors" are no smarter than the gullible I mentioned. When banks were selling these mortgages at super-attractive rates, they knew damn well what they were doing and made quite a lot in the process. The buyers, on the other hand, did not. When the latters' market seizes up, the former is left holding the debt and both parties are fucked. In the end, this is a game you can only play when the market is one-directional. If you think this game can be played when the market is going down, you'd be doing everybody a favor by telling how.
You can take your smart-ass remarks and shove it where the sun don't shine.