FBI Investigation into the Mortgage Mess

I just read an interesting on-line article about the FBI's investigation of the subprime mortgage industry. I have included a link, in case you are interested:

http://www.abcnews.go.com/TheLaw/IndustryInfo/story?id=4210595

What was most compelling was to read through the article and then to read the article  comments.  The bulk of the comments were about trying to determine who is to 'blame' in the whole situation.

There are a lot of people who made a lot of money with the sub-prime products.  There are a lot of people who will suffer a great deal of damage trying to recover from their bad financial decisions to use these products--uninformed or deliberate.  But it does leave me wondering why no one has spoken about the fact that there are actually some valid cases where a subprime mortgage product and an informed party  can be a good combination?  A risky loan made to a consumer who understands the loan product, and is willing to live with the terms,  fills an economic need.

I am not advocating that we should return to the use of subprime loans to avoid dotting our 'i's and crossing our 't's , but I would like to see a little bit more information about the statistics of the subprime mortgages that HAVE NOT become foreclosures or short sales. 

Any thoughts? Any experiences you would like to share?  This is all part of my New Years Resolution to try to be positive in the face of the media negativity!

 

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Comment balloon 5 commentsHolly Weatherwax • January 30 2008 12:40PM

Comments

Holly,  You're right.  These products, in the right hands, filled a need.  Like good medicine they serve the consumer well when properly used.
Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) over 10 years ago
Personally I was never a fan of all those non-traditional mortgages. If someone does not  have the money to buy a house, then they just have to save for it. There is too much credit being used and not enough cash down. We didn't have this mess years ago before these non-traditional  mortgages existed.
Posted by Mike Parle (CENTURY 21 Mulvey Real Estate) over 10 years ago
It is funny to talk to someone who hasn't sold Real Estate in 10 years...when was the last time you saw PMI on a loan? I bet you will now!
Posted by Holly Weatherwax, A Great Real Estate Experience ( Associate Broker, Momentum Realty) over 10 years ago

Holly, 

When I purchased my first home in 1987, we did a first and second mortgage.  I can't remember what we actually put down but do remember working double shifts to save up for closing.  On my second home purchase in 1989 I had an ARM with a 6 point cap.  The rate was 10.75%.     

The financial products on both homes allowed us entry into the home.  

There should be products available to first time home-buyers that help them get started.  Of course it all comes down to... knowing the product, the terms and the ability to pay the loan.  Short term and long term. 

Posted by Kathleen Vetrano, Helping YOU Achieve YOUR Dreams (RE/MAX Gateway) over 10 years ago

We are a litigious society and sometimes we need to "learn" lessons and move on. I like your New Years Resolution!!!

Your Friend in Charlottesville

Posted by Charles McDonald, REALTOR®, Blogger, Principal Broker®, Owner (Charlottesville Real Estate Solutions) over 10 years ago

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