How did bank lenders force people to buy houses they can’t afford?

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I’m concerned, because a banker may somehow force me to buy a home against my will. How does this happen?

18 Comments
  1. Reply
    Election 2008
    July 21, 2011 at 3:24 am

    They don’t force them, they coerce them into a risky purchase.

  2. Reply
    Jay
    July 21, 2011 at 4:08 am

    They didn’t force them.

    What they did was convince them they could refinance and lower their payments.

    They tell people that in their profession, they can expect higher wages in 5 years. So in 5 years, their payments automatically go up, maybe 400-500 dollars a month or more.

    Then the expected wage increases didn’t happen for whatever reason and these people find themselves in trouble. They shouldn’t be allowed to loan money on PROJECTED income. It should be based on CURRENT income.

    Most of the people losing their homes are losing them because of refinancing, not initial purchases.

    This happened to my daughter and her husband. They are neither lazy or stupid. They were perhaps at worst, hopeful. But these loan people are very well trained to make it look attractive and feasible.

    They wanted to add on a bedroom for their growing family, now they may lose the house altogether. Plus, I have to look at unfeeling, smart aleck posts by people like yourself.

  3. Reply
    Mild Irritant
    July 21, 2011 at 4:50 am

    They convinced people that they COULD afford homes because they wanted the profits.

    It’s called predatory lending and it should be a crime.

    It’s like those payday advance places. They take advantage of people.

  4. Reply
    ponteeee
    July 21, 2011 at 4:51 am

    They don’t force them. They offered credit to people they shouldn’t have and of course those people went along with it.

  5. Reply
    The Thing
    July 21, 2011 at 5:48 am

    Good question…the obvious answer is of course that lack of regulation did not cause this crisis…stupidity and greed by people who couldn’t afford the houses they purchased did. But let’s forget about personal responsibility and regulate ourselves to prosperity.

  6. Reply
    amazin'g
    July 21, 2011 at 6:02 am

    lol It’s only those who refuse to take responsibility for their own actions who think that…and, of course, pandering politicians.

  7. Reply
    Terri
    July 21, 2011 at 6:17 am

    Nobody can make you buy a house against your will…. It’s just not possible.

  8. Reply
    Mr.Jim Lahey
    July 21, 2011 at 6:33 am

    They didn’t actually force them…they “teased” them. I use this term because it was a thing called “teaser” rates. The banks offered a low interest rate for the first year or so, then it went up to a normal rate later on. Ppl afford it no problem in the beginning then when full interest comes along BAM! can’t make your payments.

    Also, it should be added that the average American spends way more than they earn and has questionable credit. Therefore, the banks had to “lower the bar” and be less strict as to how much money they gave to the less credit worthy.

  9. Reply
    Mark C
    July 21, 2011 at 7:03 am

    Good question, I think they just made it tempting, but I would never commit to something I could not afford. I mean we would all like to drive Rolls Royces.

    I guess most of those evil banking people were in Fla, NV, and Ca. so just don’t go into a bank there.

  10. Reply
    catlady
    July 21, 2011 at 7:20 am

    by allowing the knuckle dragging morons to think they could own stuff like proper people. maybe now they’ll I.Q. test people before letting them buy expensive things!

    Are you a moron? If not you’ll be fine.

  11. Reply
    Lynn
    July 21, 2011 at 7:53 am

    Lenders dont hold guns to peoples’ heads. No can force you to get a loan you cant afford. Just make sure you can afford it before you apply for it

  12. Reply
    davencusa
    July 21, 2011 at 8:47 am

    They weren’t forced. The banks made loans available to them that were quite risky and the home buyers overextended themselves.

  13. Reply
    Linda K
    July 21, 2011 at 8:50 am

    No one forces people – it’s more like entices them to do so… Lenders made homes too readily & easier accessable with creative finances for people who SHOULDN’T HAVE qualified to buy the homes in the lst place. But they saw $ $ $ in their own pockets and greedily opened the door for eager buyers who didn’t read before they SIGNED loan documents!

  14. Reply
    Think for yourself
    July 21, 2011 at 9:20 am

    They thought they had a good deal (the dream of owning a home)they did not check the fine print.They didn’t educate themselves, or seek legal advice. If you should know anything now, you should get a “fixed” not “adjustable” rate when borrowing.

  15. Reply
    justagrandma
    July 21, 2011 at 9:40 am

    That’s what people here keep saying and its a puzzle.
    I’ve never bought a home where I went in and told the bank what my terms were going to be, and that they better not ask for proof of income either.
    They’d have laughed at me.
    In the past few years banks have engaged in practices that would make the serpent in Eden blush. Many states are realizing that outright fraud was involved, with people being approved for loans they had no chance of affording.
    Many of them are financially unsophisticated and the feeling was that the bank knew best and wouldn’t let them get into trouble, after all, sane thinking goes, the banks want their money back and they wouldn’t write a loan that would be out of reach. But they did.
    They lied to the buyer, misrepresented the possibility of foreclosure, and never told the buyers that they were in over their head, or would be once the teaser rate was gone.
    With all housing having gone up so high, we aren’t talking about people buying palaces, just regular old homes.
    Except of course for the flippers and ‘investors’, they should have known better, and the banks, again, should have been more careful. At least if you wanted to make it a business, you should have the advisors to tell you that your are in over your head, but the average homeowner just trusted his banker.

  16. Reply
    Kimbermai
    July 21, 2011 at 10:35 am

    No. For the most part Bankers did not FORCE anyone to buy a home. Yes, there are some loan agencies (different from a Bank) that committed fraud – that’s a little different. If you are a person that is attempting to buy a home your best bet is to go with a trusted bank – BofA, Wells Fargo, Washington Mutual – these are banks that a person with good to excellent credit, a down payment and solid work history could qualify for a loan with. The defaults are mainly due to banks not being so strict on how they lend to people – not requiring down payments and loaning more of a mortgage to people despite not making alot in income. Now the rules are much stricter which should hopefully avoid a mess like this again. It’s best to go w/ a trusted bank – no one will FORCE you to do anything. You can always say no.

  17. Reply
    Dr.John L
    July 21, 2011 at 10:57 am

    Because they didn’t explain the fiscal ramifications, and used high pressure sale practices

  18. Reply
    booboo
    July 21, 2011 at 11:29 am

    They didn’t force them, they tricked them, sometimes they would take peoples W2’s and pay stubs and change the numbers to make it look like the people made more money so they would get the loan even though they actually couldn’t afford it, and many other such tricks like that and now those people are probably getting evicted from their homes, the ones they spent all that money making payments on and are now loosing, money that they could have saved for a down payment on a home they could actually afford.

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