Seattle Times Sub-Prime Mortgage Article

[genghis]

The article http://seattletimes.nwsource.com/html/localnews/2003696532_loan07.html
isn't all that interesting - but this quote is classic:

But when the couple — with no savings and about $20,000 in credit-card debt — shopped for a mortgage to buy their 1,200-square-foot house in Tukwila last year, they heard the same thing from lenders and in a home-buying class they attended: Forget it.

"You basically had to be Scot free, no massive credit debt, which we had, and to have money in the bank, which we didn't," said Swartz, 31. "How do people buy houses in America anymore?"

 

[crazy connie]

I guess their parents forgot to tell them:

ZERO DEBT unless modest student loans
PAY ALL BILLS ON TIME
SAVE UP 20% Down
buy within your income means

 

[Brat]

Commentary on the same article: http://seattlebubble.blogspot.com/2007/05/my-clients-dont-have-any-money.html

 

[WRBT]

http://finance.myway.com/jsp/nw/nwdt_rt_top.jsp?news_id=ap-d8ov1k780&

Her 29-year-old daughter, a graduate student with an annual income of less than $20,000, qualified for a mortgage of $600,000 with no money down, split into two different loans at 8.75 percent and 12.5 percent interest rates.

With income from tenants, which didn't come right away, Beatty's daughter thought she could afford monthly payments of nearly $5,000. But she hasn't made a mortgage payment in more than three months, and she's receiving letters threatening foreclosure.

All together now... WTF?

 

[brewer12345]

All together now... WTF?

Scary how loose mortgage lending got at its nadir, eh?

 

[al_bundy]

http://finance.myway.com/jsp/nw/nwdt_rt_top.jsp?news_id=ap-d8ov1k780&

Her 29-year-old daughter, a graduate student with an annual income of less than $20,000, qualified for a mortgage of $600,000 with no money down, split into two different loans at 8.75 percent and 12.5 percent interest rates.

With income from tenants, which didn't come right away, Beatty's daughter thought she could afford monthly payments of nearly $5,000. But she hasn't made a mortgage payment in more than three months, and she's receiving letters threatening foreclosure.

All together now... WTF?

i've been reading stuff like this on crediboards for the last 2 years. no surprise here

 

[MasterBlaster]

Well the way I see it...

The sub-prime borrowers aren't out anything. They never had any skin in the game and can pretty much just walk away from it.

It's the lenders that will take the beating. So as always if some lender is foolish enough to lend money to someone like that they desrve to lose money.

 

[dmpi]

Well the way I see it...

The sub-prime borrowers aren't out anything. They never had any skin in the game and can pretty much just walk away from it.

It's the lenders that will take the beating. So as always if some lender is foolish enough to lend money to someone like that they desrve to lose money.

The lender won't get it either... they packaged the loans up and sold them to investors.
Now who are these "investors"? My guess is hedge funds.

 

[Mwsinron]

Ive had to read that quote over and over to see what I was missing. 20k isnt massive credit card debt? People need to buy a damn clue.

 

[MasterBlaster]

The lender won't get it either... they packaged the loans up and sold them to investors.
Now who are these "investors"? My guess is hedge funds.

By my way of thinking, the investors are the actual lenders. What you have defined as lender is a boker in my mind.

The investor/lenders should have investigated how their money was being parceled out.