- This topic has 7 replies, 6 voices, and was last updated 17 years, 11 months ago by
BikeRider.
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December 6, 2006 at 4:44 PM #8016December 6, 2006 at 5:03 PM #41272
no_such_reality
ParticipantChoking on their greed? ROFL. Maybe their Mai Tai. They banked and are walking away before anybody can be accountable.
It’s a similar tactic to what many small manufacturers do after being in business for years with hazardous substances and health/safety policies, they close instead of sell because then they can eliminate the retained records before they can be used by discovery in any lawsuits.
(Don’t mind me, I’ve been sipping the cyncism coffee today)
December 6, 2006 at 5:55 PM #41275PerryChase
ParticipantTo be fair to them, lenient lending standards are not bad because it gives poor people access to credit. The problem is that any program or financing scheme that attempts to make homes more “affordable” gets priced right into the selling prices of houses.
NSR has a point. They are probably fat and happy and retiring to a tax haven in the Caribbean.
December 7, 2006 at 5:03 PM #41318heavyd
ParticipantArticles in the LA Times and now Bloomberg suggest Ownit is bankrupt, ie it ran out of cash. This after it’s loan book grew by over 40% in the first half this year. So maybe it’s not a happy ending after all…HD
December 7, 2006 at 6:18 PM #41319powayseller
ParticipantLenient lending standards allow poor people to buy and then LOSE their home.
So the home ownership rate has been increased, but at the expense of great suffering. Because that increased home ownership rate is only temporary.
If we really want to help the poor, give them some free credit counseling, help them raise their credit score, and then put them into a loan product which allows them to buy and KEEP a house.
Lenient lending standards are often accompanied by unscrupulous high lending costs. Broker commissions and prepayment penalties are highest on these loans.
The poor are the target of subprime loans. Subprime loans are concentrated in low income areas, not spread equally across the US, and they are a way to taking advantage of lower income borrowers. One study found that subprime borrowers who went to Wells Fargo’s subprime branch were put into a subprime loan, even when they qualified for a lower rate prime loan through Wells Fargo’s main banking division. Lenient lending standards are a way of taking advantage of the poor.
December 7, 2006 at 10:25 PM #41331ParticipantI stand corrected, powayseller. We should have free credit counseling and financial management classes at the community colleges.
December 7, 2006 at 10:46 PM #41332ParticipantPerry, I dont want to correct you. I think your idea is a good one, letting poor people move up financially. I also like your idea about free credit counseling, and it had not occurred to me . All students should study finances as part of every math class.
December 8, 2006 at 4:55 AM #41336BikeRider
ParticipantWhat is the definition of “poor people” ? Maybe some of you in SD that can’t afford current housing prices? Just kidding. But really, I think the typical lax lending standards sets a trap for a family with low income. The low tickler rate lures them in, but as soon as there is a rate reset or their income takes a hit, they are toast. Most middle income families aren’t really ready for any kind of income change. I read all the time that most families have no savings. So, if they are a two income family, living off both incomes and then lose one of those incomes, they are probably going to lose the house. A lot of families in America now have a lot of stuff, using credit, but you really couldn’t say they were rich. They are kind of like poor, but got a lot of stuff they really don’t own yet, with more income than someone living in a van down by the river.
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