Posted 3/26/2007 05:17:00 PM by Douglas

No one would ever rejoice at the thought of someone losing their home, but with all the headlines about "sub-prime" lending going on, I just can't help but wonder, does anyone even make an attempt to read what they're signing?

Eventually, they combined to make around $55,000 a year.

[. . . ]

It cost $204,000. "We thought we were getting a deal," Tim says.

The agent said he'd find them a mortgage, no money down. The Snearys say they never thought to shop around.

Again, this is the bank's fault?

The Snearys say they expected to borrow at a fixed rate of 6.5 percent. That would put monthly payments at about $1,290, a little more than rent.

$1,300? And they make $55,000? First off, they haven't paid any taxes or insurance yet, but that's another story. They plan to spend roughly a third of their take-home salary on their house? AND they've got three kids AND they haven't eaten yet. It's easy to see that this problem isn't of the big bad bank but rather people that overbought houses they can't afford.

Looking back, Tim wishes they'd asked more questions or considered walking out. But everything was in boxes, and they'd given notice. So they eyed each other nervously, and agreed to work more hours. Then, they signed the papers.

What a moron. I'm not advocating taking advantage of people that are desperate for a house and are too stupid to read the papers and/or ask questions. But come on. The reaction to this is simply going to be more draconian legislation on top of stupid rules and regulations for an industry we already know is riddled with thieves. I just can't imagine how more laws are going to make this better.

For example, what about the couple that bought the house as an investment and were going to "flip it" in two years? They don't care what the interest rate is going to be, because they plan to sell it, anyway? Should they be forced to suffer high interest rates because people that really need a different loan than they need are too stupid to read the fine print?

Sadly, we know the answer to that one.