Subprime Fiasco Exposes Manipulation by Mortgage Brokerages By Seth Lubove and Daniel Taub http://www.bloomberg.com/apps/news?pid=20601109&sid=a8VFwgtdQ9FM&refer=home May 30 (Bloomberg) -- Taher Afghani was working for discount retailer Target Corp. near San Francisco when friends told him about the riches to be made in California's Mortgage Alley. It was 2004, and the U.S. real estate market was on fire. Down in Southern California, a hub for lenders specializing in loans to people with weak, or subprime, credit, Afghani's pals were making a fortune pushing risky mortgages on homebuyers. After tagging along with a buddy on a company trip to Los Cabos, Mexico, Afghani quit Target, headed south and began hustling loans at Costa Mesa-based Secured Funding Corp. ``I had never seen so much money thrown around in one weekend,'' Afghani, 27, says of the Cabo getaway. ``It was crazy. All these kids, literally 18 to 26, were loaded -- the best clothes, the cars, the girls, everything.'' Soon Afghani.....(click on link above to read whole article - it's long)
I have no sympathy for suckers who fell for this crap. If someone makes $20 per hour and too dumb to understand that 500K house is out of his reach, he deserves his fate.
The evils of the subprime industry extend beyond this. Often times people who don't know any better end up going with a subprime lender when they would have qualified for a prime lender, just because that was what was presented to them first. Just about every home lending ad you've seen on TV or in the papers was for a subprime lender... They are ubiquitous and they target anyone and everyone. The ethics of this industry are nonexistent. And it doesn't matter how expensive the home is... If someone can only afford a 100k house and they end up going with a subprime lender, they are still going to get royally F'ed after a couple of years when their payments go up.
This is true , but no one forced them to sign anything. Im so sick of seeing all the articles about some guy who just cant understand why this happened to him and trying to blame the brokers. Sure some of them are pure scum but its up to the buyer to do his due diligence. I agree with red duke. I have no sympathy for those people. "i didn't know that my payment would reset after 1 year and then double". Well why the f*ck not!? People will drive 10 miles out of the way to save a nickle on gas...but when it comes to the biggest purchase of their life they just sign on the dotted line. People need to be responsible for the mess they make. Jim
I have been saying the same thing....and I also don\'t think we should be bailing them out. They should have to pay each penny off themselves. Guess what? My kids who are grown up rent, and live frugally and are working on their careers and saving so that they can be financially independent and not on amassing some huge house way out fo their league...for what? To show off to everyone, that\'s why. Live with the consequences, I shed no tears for these imbeciles.
100% agree. Now I fully expect some legislation where retards like these get a bailout when their mortgage goes under water. I think it's absurd enough to happen since the US is a raging country of people who accept no blame for anything. opm8
LOL. Okay, let's think about this. There are two sources to this problem: 1) Unethical subprime companies 2) Stupid and/or uninformed people We can obviously do something about #1. But if you think #2 will ever be solved... Saying "they're stupid, they deserve it" is like saying that a woman deserved to be raped because she didn't keep mace in her purse, because your wife and daughters are all smart enough to.
Real estate brokers as just as much to blame. Could a registered rep sell an unsuitable investment to 90% of their clients and get away with it? The NAR is a monopolistic antiquated organization whose time has come.