You are right, many people could not read the fine print and took out
more money than they could afford. Heck when I was purchasing a
house 3 years ago they told me I could borrow up to $1,000,000, if I
got a mortgage that would adjust or interest only loan. I decided to
borrow much less.
But you have to ask the question "How sound are the business practices
of a company who would offer such a loan?" Turns out, not very sound
at all. You can blame the people who signed the loans but most of us
on the list would not have based our business on such plans. So it
turns out a bunch of bankers made a bunch of unsound bets, got richly
reward, and now the taxpayers are stuck with the cost of savings these
banks because they are to big to fail.
Twenty years ago you need 20% down to buy a house and your total bills
could not exceed ~30% of your gross salary. That was consider
standard lending practices. What changed is banks decide that they
could make more money by writing risky loans. You are correct Jim
this has already cost me; my company is not giving raises this year
due to declining revenue and I am not in the banking business. I
place the blame squarely with the people who made the risky loans,
they should have known better.
I am pretty sure if ran my business like the banks I would be out of
work. As my grandfather used say, "It is good to be king." or "Steal a
loaf of bread and go to jail, steal a railroad and go to Congress."
Bill
Jim Johnson wrote:
Look in your pocket. Whatever change is there is all you are going to have
when you get done paying the mortgages of those who don't know how to read
the fine print on a loan form.
Now THAT'S "Change you can believe in"!
Cheers!!
Jim
On Wed, Feb 25, 2009 at 1:22 PM, WFO Herb <froggi60@gmail.com> wrote:
I'm still waiting for the 'change'.
Herb
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