Quote:
Originally Posted by afc wimbledon
I fail to see why the homeowners were either niave or greedy, they were offered a chance to buy a house in a rising market, it is implicit in every mortgage contract that you can walk away from it if you can't pay, it isn't wrong or immoral it just screws your credit, which most of them didn't have anyway, they didn't lie or cheat, the homeowners lived up to their responsibilty, they paid for as long as they could and then gave the house back when they couldn't.
This was wholly the mortgage vendors fault.
And Greece is triple c credit so the S&P doesn't think you are Greece just a bit effed up.
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When I hear or read stories of buyers who didn't know or understand that their say, $300/mo payment would go up 4x or whatever as much, I don't have much sympathy.
There is a gov't regulation in existence since the 30s called the HUD statement which explicity and in layman terms gives your monthly payments, interest rate, potential payment scenarios and total interest paid, etc whether it is a vanilla 30 year fixed to the more exotic ARMS(adjustable rate mortgages) or option ARMs.
There is a naivite or greed involved if a. you believe or depend on your realtor, mortgage broker or appraisal firm to tell you how much you'll be paying instead of reading the HUD before signing the contract and b. you purchase a home knowing full well you can't afford the payments when your ARM resets GAMBLING that you can sell or flip before the reset.
There were certainly many situations where there was predatory lending but not enough to cause the entire crisis. So in that sense, buyers were part of the problem when they were gambling or didn't really understand what they were doing.