Why are there many Americans can not subprime mortgage to buy a house qualify?

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I have no problem locking this discussion gesehen.Ich the lender for greedily guilt, I’m greedy and stupid borrowers for a foul. But this is not the real problem is that we call a nation full of people whose credit is in the toilet and they can not review “non-subprime mortgage? Why so many people only able to buy homes mortgage for means for high-risk borrowers? I still think some of you admit not to say that most of what you want is on personal responsibility is also a deteriation the American dream. You know the one, if you receive at least a high school diploma, you should be able to provide a middle class person can have a family and a decent house to be. I think the thing that is not approved is that there are many variables working against American workers, they are more financially stressed .. such as prices of health care cost of gas, outsourcing jobs, illegal aliens take away jobs and depressing wages, etc. .. I think all these things complicit in their own small way is to attack the American middle class and the American dream. People aspire credit may therefore be partly due to lack of intelligent decisions, but if the whole nation is in the toilet, is there more to play, who do not want some of us another thing some of zugeben.Die of you want to do is to assume that the sub-prime mortgages only there for the people is no home. Yes, this is partly true, but many people, these loans do not buy more house, but because they are buying a house benötigen.Ein point of time, moreover, that this crisis on the credit rating system news, which was conducted over several years can be obtained again. Many people who carry out mortgage and bills on time can usually be in the cold of a “good” mortgages left, only because the computer said, their credit score is, x and x that Standard is not a qualifed mortgage.

19 Comments
  1. Reply
    snarkysmug
    May 2, 2011 at 9:20 am

    you are right. people are over extended. sub prime loans are a way to get someone into a house that they really cannot afford. greenspan thought they were great by the way.

  2. Reply
    mustagme
    May 2, 2011 at 9:40 am

    Because Americans are the worst in the world at managing their money. Low credit, little retirement, and let living extravagant lives meant only for the upper 1%.

  3. Reply
    Holy Cow
    May 2, 2011 at 10:06 am

    Because credit reporting agencies in collusion with creditors have stacked the deck against consumers and they’ve done it all with congress’s help. There is no encouragement to save. And the people making the rules have their foot on the scales.

  4. Reply
    Bill H
    May 2, 2011 at 10:35 am

    America has become an “I want it now” societey. People (generally) do not save for tomorrow. Rather than save for 5 yrs or so, towards a down payment, they take out a crappy, high interest loan to get it now.

  5. Reply
    Chris
    May 2, 2011 at 11:11 am

    The want what they can not afford. People what champaign on a beer budget. The go out, run up credit card need buy stuff they do not need. Then they have no savings and can not save because of their spending habits. When they want to buy a house they have nothing for a down payment. High dept, no savings, no down payment equal a high risk loan.

  6. Reply
    mahal
    May 2, 2011 at 11:52 am

    If you go to several well-known banks, and all of them tell you that they’re not going to give you a loan, YOU CAN’T AFFORD TO BUY A HOUSE.

    If you then go to another lesser known lender and they offer you ANYTHING, don’t take it.

    It’s not about whether you can afford a subprime, and it’s not about getting the payment low enough so you can. Some of the lenders are suckering you. You’re going to be paying more than 8% over the life of the loan if you get anything other than a fixed rate, and that’s just dumb.

    You are much better off buying a less expensive house (a fixer upper). If you make basic improvements, you can double the value of your home to build equity rather than paying on a loan to accomplish the same thing.

  7. Reply
    information_police
    May 2, 2011 at 12:11 pm

    There have always been a significant portion of the population that cannot afford to purchase their own home. I think, overall, the rate of home ownership is pretty high in the US compared to most other countries. The subprime movement was an attempt to get even more people to own homes than ever before and thus spur the home building market.

    But part of it was also because low interest rates had allowed home prices to skyrocket, pricing out a lot of people.

    It seems to me that if the problem of homeownership was high prices, not high interest rates, then temporarily lowering interest rates even more was not the way to solve it.

    This has been discussed in detail by people like Paul Krugman in books and newspaper columns.

  8. Reply
    TheOnlyBeldin
    May 2, 2011 at 12:23 pm

    Because we have nothing in this country set up to teach people about credit and credit ratings and how to use credit wisely.

    Not everyone who owns a house had to go subprime, but too many people got suckered in by low rates and ended up either buying more house than they could afford (or got talked into it) or were allowed to buy with little or no equity and no ability to repay, which became even worse when the teaser rates expired. The house-buying frenzy also drove prices up to unsustainable levels in many areas such that supply outstripped demand and caused prices to eventually stagnate and start to fall. When home prices are dropping, and you need to refinance, what you thought was worth a lot more isn’t, and no mortgage company will finance or refinance a loan for more than a house is worth.

  9. Reply
    JimSock
    May 2, 2011 at 12:35 pm

    So many? How many? How many is TOO many?

    How many of those foreclosures are on people who got mortgages on $ 900,000.00 homes when they were only making $ 55,000.00 a year.

    They could get a mortgage and pay it if they were a little more responsible. There are plenty of homes they could afford available. We are the victims of their materialism.

    Now the rest of us will have to pay for their stupidity.

  10. Reply
    mojo
    May 2, 2011 at 1:33 pm

    BOTH are the problem. People with massive debt and poor credit should not be considering home-ownership until they are more stable financially. ALSO, sub-prime mortgage lenders are, by their very definition PREDATORY. It is basically loan sharking. It’s very unethical. Plenty of blame to go around on both sides. Their should be tighter regulations, on mortgages.

  11. Reply
    Looney
    May 2, 2011 at 1:39 pm

    Yep, getting a mortgage is comparable to gambling. It’s a racket.

  12. Reply
    conpublican
    May 2, 2011 at 2:35 pm

    Plenty of people qualify for regular loans. People tried very hard to take advantage of low interest rates without doing their homework, many even lied on their applications to secure the loans. They did not insist on a fixed rate and bought BIG. Irresponsibility on the part of the borrower and the lender are the cause for the problems they are now facing. Teaching economics to these people would go a long way.

    Edit:
    Thumbs down for saying people should be more responsible with their finances? No one made these people accept the terms of these loans. Maybe they deserve someone like Hillary running their lives.

  13. Reply
    tx_trotter95
    May 2, 2011 at 2:50 pm

    Sadly, Americans (yes, this is a generalization) use credit way too much. In addition, we buy way too much house.

  14. Reply
    don c
    May 2, 2011 at 3:19 pm

    People are over extended. How can you not be with the costs of gasoline and the costs of health care? Don’t ever break a leg if you own a house. Don’t have your company ship your job overseas. If 1 of the 9+ trillion dollars wasted by this administration went for better jobs and better training for low income people (many are low income that have been out osurced from their good jobs) we might not have such a mess

  15. Reply
    J D
    May 2, 2011 at 4:05 pm

    Because wages do not keep with cost of living in America . Many are only part time . Both spouses work and still barely earn enough . Insurance and oil company’s grow faster than income.

  16. Reply
    relevant_inquiry
    May 2, 2011 at 4:31 pm

    Millions of Americans have modest incomes and poor credit but they want to stop paying rent and begin to participate in the American dream of owning their own homes. Home ownership is also a long-term method of building wealth.

    Many of these individuals can actually afford reasonable mortgages but they have obtained mortgages with extremely unfavorable terms because they didn’t qualify for regular mortgages. I think this issue can be favorably addressed for many homeowners. Shore Bank in Chicago was featured on PBS recently as trying to provide reasonable mortgages to people who would otherwise lose their homes. If more lending institutions tried adopting this approach, part of this widespread problem might be resolved.

    You’re right that many Americans are currently suffering financial stress. We should be looking realistically at what is happening to ordinary Americans instead of pretending that all is well.

  17. Reply
    hoo
    May 2, 2011 at 5:05 pm

    WOW.
    Talk about 1+1=2
    Instead of trying to understand why you or “so many Americans” aren’t entitled to something let me put it to you very simply.
    1. Houses are expensive.
    2. You and “so many Americans” apparently don’t make enough money.

    How do you phrase that?
    I think it’s DUH!

    How about this?
    Instead of wondering why you and “so many Americans” are not entitled to something, why don’t you consider why you don’t make more money?
    Better yet!
    Why don’t you learn to build your own house?

  18. Reply
    jeeper_peeper321
    May 2, 2011 at 5:22 pm

    Well first, 21% of all mortages from 2004 to 2006, were sub prime mortgages.

    The reason are varied.

    People trying to buy more house than they could afford.

    People playing the house flipping game.

    The house flipping game, is the part of the story, that hasn’t been covered very much.

    Those people used sub prime mortgages to finance houses 100%, because they wanted to do some quick remodeling and resell the houses within a year,

    Trying to capitolize on rising house prices.

    Then when the housing market started going flat, they were stuck with mortgages that were worth more than the houses they bought.

    3rdly, there is the tendency of sub prime mortgages, to have teaser rates for the first couple of years.

    Where the mortgage payment is 20 to 30% lower the first couple of years, then is increased to normal rates.

    Borrowers and lenders both, made the loans based on the ability to afford the teaser rates, and not the rates after they went up.

    4th, alot of borrowers, made the subprime loans, with the intention of refinancing again after several years, to gain equity from rapidly increasing housing prices.

    When the housing market bottomed out, they could no longer afford to refinance and were stuck with bad sub prime loans.

    I really believe alot of the people caught in this mess, brought it on themselves, by trying to make a quick buck flipping houses.

  19. Reply
    Bob
    May 2, 2011 at 6:04 pm

    Here is the problem. People WANT the biggest and best house. They WANT the best stereo system, cars, etc. The problem is they cannot AFFORD this based upon their salary.

    Banks own the house, you borrow the money and pay them until you pay off what you owe. That is your personal decision. No one held a gun to these people’s head and said “BUY THIS!”

    Sub-prime or Adjustable Rate Mortgages are designed to be SHORT TERM loans. I had one. It started at 4.5%. Rates went up and I locked on a 15 year loan at 5%. I did this to get into the house as cheaply as possible. So basically I used it as a bridge loan. I could afford the additional costs.

    However I know so many people who max out the credit cards to buy stupid stuff. They then get into a house they can’t really afford, they get a few repair bills for the car or house, and next thing you know they are having financial problems. So it is their own dam fault and call me a heartless person, but I don’t feel sorry for them.

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