Quote Originally Posted by BanginJimmy View Post
What part of this was NOT the fault of people buying homes they couldnt actually afford?

Some call it predatory lending, I call it stupid people not reading what they are signing.


I call it a bandaid for the simple fact that nothing was done to prevent it from happening again. ARMs are still out there even though interest rates are already rising. The govt is still pushing banks to write loans for people that wont pay them back, the Fannie and Freddie are buying them up. Until the govt steps in and prevent these types of loans (ARMs, interest only ect) and stops encouraging their use by backing them through the GSE's we are just asking for a fresh round of economic failure.
I find it odd that I would even debate someone on the "good" that Obama has done lol. That being said, when is the last time you actually applied for a mortgage? I deny people on a daily...yes daily basis. The idea behind an ARM, Interest Only, ect...is not in itself a "bad idea" or "predatory" in any way. If i have a borrower looking to purchase a home but flip it in the next 2-5 years...why would he/she not want an ARM/Interest only loan? Let's call it what it really is...the 90's and 00's were an era of "free money". Sure the lobbyists pushed regulation changes...but EVERYBODY was on board. The people all wanted a piece of the "American Dream" and everybody else wanted a piece of the pie. There was money to be made...great deals of money. I hear the stories from loan officers all the time. They made a killing. The true problem was that they were giving away money...100% financing with 80/20 loans, stated income/assets, ect...Yeah the big banks screwed everyone...and better yet...after the bailout and after the "recovery" the banks still denied people the ability to refinance since there was no equity in the home...enter Obama and the HARP program. No matter which way you try to swing it...it was a good thing he did.

It is not a bandaid. If you are not currently selling mortgages or in the business...then you don't know what you are talking about. Underwriting guidelines are extremely strict and there are MANY in place that are there to avoid another bubble like the last one. I could write books about all the measures put into place to avoid it.