Surprise: "Toxic" Mortgages Are The Best

Agreed. 

These loans can be very valuable for certain buyers.  Many of my buyers have used them to their advanage.  The flexibiity is wonderful.

The loans that I obect to are the "stated income" loans where the buyer lies about their income and the lender knows it and approved them anyway.

Or, approving folks with low credit scores in exchange for high interest rates/points.  This is a form of predatory lending and they should be prosecuted, but won't.

The problem is that a lot of the people taking advantage of these toxic sort of loans were not the disciplined folks.  They were the ones that used the lower payment to go out and get deeper in debt buying a 4 wheeler or a boat instead of saving money or making smart decisions.