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March 26, 2007

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Yeah Really - if you didn't see this one coming you had your head in the sand.

There are two people responsible for this - the buyer AND the lender. Both were looking for a good deal - and they got it - at least for a short time. Too bad we don't teach people this kind of basic "life skill" in school. It goes back to "if it sounds to good to be true...."

BTW - I am also really disappointed in Quicken (Intuit) for getting into the load business the way they did. I am not sure if they are truly a sub prime lender, but they are really pushing the interest only mortgage. What a great way to get yourself in trouble. I cant imagine being upside down on a house. Ouch!

Although it may seem harsh, if you make such a large and long-term commitment such as owning a home and you don't know the basics- I can't feel sorry for the buyers. Not knowing that when your "builder" tells you your taxes are going to be $200/half- not telling you that is assessed as an empty lot and NOT with a $100,000 house on said lot, why are people stunned when their first tax year is assessed with a home on it? Duh!

As far as the rate issue- if you know going in that you are on an adjustable mortgage, how in your right mind can you be mad if rates jump and your mortgage rate jumps with it?

In essence, their stupidity has even affected people who do know what it is to buy and own a home- the proper way. With the onslaught of vinyl villages popping up and being foreclosed upon, people who bought decent properties hoping for a good appreciation are, at times, taking a bath to get out. In a new buyers mind- why spend $125,000 on a well built older home, when their are 50-100 slap together houses available in each zipcode that the banks are chomping at the bit to get off their books as fast as they can-even at a loss?

The government always seems to have to step in and save people from their own ignorance. A pretty sad state of affairs in my opinion.

The article talks about predatory lending practices... Is it possible that some of these people were honestly not informed that their rates would almost certainly go up? Or that perhaps those details were buried in the legalese? Or they were told some version of "Don't worry about it. It probably won't happen to you"?

Maybe...

Still, for the most part, I'm right there with you guys. A mortgage is a really, really big loan, and to enter into that sort of arrangement without looking carefully at the details, asking questions, etc., is definitely unwise.

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