This is a Story that I heard from someone who came up with this story. There was a Guy and he was in need of $100,000. Here comes a Loan Shark and loaned him $100,000 but he placed a Lien against that Fellow's property.The Fellow worked hard and started making big payments but all of his payments went toward paying ridiculous amount of Interest and none toward principal. This Loan Shark had a very tight contract in place. Over a period of 5 years this Fellow paid almost Double what he borrowed. He made up his mind and went to see this loan shark and pleaded " Dear Sir, Now I have paid you almost double, Can you please release the Lien from my Property and we call everything even" . Loan Shark said " Hmmm...Let me see your books. Ohh! You dont have any cash in bank so I dont want to do that, you might need money again and it will be a great Risk. So what I am doing to you and to people who depend on you a Favor by not releasing you from this bond" The Fellow Replied " But I am paying you most of my profits toward the interest payments, how will I accumulate cash on my books" The Loan Shark showed him the Contract and that was the last I heard about that story.
Fannie and Freddie are backbone of Real Estate Industry. I agree they superrelaxed their guidelines before 2008 recession but the Banks who underwritten those mortgages and Sold to them have already paid back big Fines and proved Guilty in court. Its time to release Fannie and Freddie back to their original form with Audit's in place so that History doesnt repeats itself.
What is your opinion on this ? Please feel free to share your thoughts....
Comments(1)