Foreclosures – Who is Surprised?

Sub prime foreclosures continue to haunt the financial news. Had I started this blog back in ’02 or ’03 when these loans were being peddled, I would have said then “that’s a bad idea”.  Any adjustable rate mortgage, based on payments when interest rates were as low as they were, is like playing Russian Roulette with all the chambers loaded!  The only sensible things to buy when interest rates are low are short term assets like cars (where you can pay them off in a few years) or other short term loans. 

A bigger question is who’s to blame here?  It’s easy to blame the buyers for not reading between the lines and not applying some critical thinking before they signed on the lines.  Not everyone can do that however, and the lenders need to bear some responsibility here as well.  They knew the danger of such sub prime lending in low interest rates yet they led the buyers into these deals.  The buyers merely bought the “American Dream” pitch of owning your own home.  Few people really “own their home”; the banks own them.  People just make payments.  In the right market and under the right conditions, those become equity payments.  But in the wrong market, it’s worse than paying rent!

Foreclosure Filings Soar in 3rd Quarter

Home Foreclosure

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1 comment so far

  1. Catherine on

    Hi! I work at CurrentForeclosures.com a foreclosures site. I agree with you. There is a doomsday scenario being painted. And if we read the news, we tend to believe that the foreclosure crisis will stay for awhile. Short-term solution such as government aid may assist affected homeowners besieged with foreclosure woes.


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