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Pointing fingers at the wrong person

I'm getting really tired of reading articles in the news about how some unfortunate person got screwed by a mortgage broker. Yes there are some lenders out there that have taken advantage of a system that got way too loose in their guidlines, but where do you draw the line? Where is the responsibility of the consumer? Why is everyone always looking to blame someone else and not take responsibility for their own decisions?

Would you give $600K to a financial advisor without doing a little bit of due diligence on the broker and what kinds of products they are going to invest your money in? Of course you would! Well, when you are buying a $600K home, why isn't the consumer doing their diligence and learning about the people they are working with and which programs are going to best benefit both the their short and long term financial needs? I don't get it.

Take responsibility for your own actions! If you are unsure about what you're getting into ask questions! Here is the latest article I read. This couple completely over leveraged themselves. They refinanced to get out of debt numerous times. Had they been responsible and not over leveraged and had good credit, they wouldn't have a problem. It's pretty much that simple.

http://online.wsj.com/article/SB120975119418663167.html?mod=residential_real_estate

Okay, I'm done venting now.

Posted by Bryce Johnson on 05/13/2008 01:53 PM

Comments (4)

Post is included in group: Puget Sound - WA Real Estate

4 Comments on Pointing fingers at the wrong person

MAY

2008

Preach it brother. what probably happened is that they talked to an honest lender first and they didn't like hearing the truth about how much it costs to live in a home that size. Then the went to someone who didn't care about the customer, only the deal.

You get what you pay for and if it looks too good to be true, ther must be something wrong.

Oh I almost forgot. Did you hear about the JONES' They are in forclosure.

i agree with you. the media loves to tell the story of how the big bad bank stole this nice couples home. its a load of bs! that nice couple bought a home with little or no money down, with an adjustable because the could only afford the payments at the introductory rate.like to many americans they lived on credit & over extended themselves. they went to a closing. someone, whether it was an attorney or a closer, explained to them exactly what the mortgage professional did. this is how much money you are borrowing, this is the monthly payment you will have to make to the lending institution, this is your rate. after 2(or 3)years that rate will adjust & your payments will go up. if you do not make the payments the bank will foreclose on the colateral(home)they took a gamble that the value would go up & they would be able to refinance into a fixed rate befor the loan was scheduled to adjust. if thet went to vegas and lost at roulette would the nice casino give them thier money back? of course not.

In June 1995, the Floyds bought a four bedroom, 2,100 square foot home in Vallejo at auction for $170,000. After cashing out of Mr. Floyd's retirement fund, they put $11,000 down and financed the rest with a 30-year, fixed-rate mortgage from Countrywide. Their monthly payment was $1,500; the rate slightly under 9%.

You know what? If you really read that paragraph, you can punch holes in the entire thing. For one thing, with the lowest price lender in the country, why did they have a 30 year fixed at 9%? 9%. Good grief. That just simply doesn't even add up.

If their credit scores were so low that they had to get a 9% interest loan, I doubt that they could have gotten a 30 year fixed. I could be wrong. Fact is, they started with a $1,500 monthly payment and now have a payment of $5,600???? How did they manage that????

This entire story just doesn't add up. These stories never add up. This is yellow journalism at it's worst. There was a time I would have expected more from the Wall Street Journal. But, I guess they are looking for some circulation.

Hi Bryce,

Many people are in the situations they're in now because they over leveraged themselves. It will be much harder for individuals to do that now. Have a great day. Michael A. Caruso

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