FORCLOSURE & SUB-PRIME MYTHS
Its amazing to me to listen to the comments made by alleged professionals in the financial industry and how quickly the press endorses it without any research in to the real issues.
To allocate all the blame on sub-prime mortgages, Wall Street Investors and God Forbid mortgage brokers for the rapid rise in foreclosures in the region because of taking additional risks to lend up to 100% on a purchase is ridiculous and ignorant. To ignore the economically depressed reasons and over inflation of the real estate market sounds like an agenda, let alone has no basis for argument.
No one wishes to see people lose their home. This would include the investors who took the greatest risk, allowing home buyers to purchase with little or no money down. Do you really think they wish to become property owners? How about the Real Estate Industry who oversold and inflated the values? This has been a five year bubble waiting to burst and they knew it. Of course we wont get any articles about this in the news industry as the Real Estate market is their largest advertiser. To the lenders that quickly blame mortgage companies and state they hurt the community with these loans and foreclosures, I would suggest to think about that when you finance builders with inflated value sub-divisions and certainly look to get first shot at the residential mortgages. The bank community easily targets this to further their argument to eliminate competition with mortgage companies which provide more products and services, let alone takes a share of the lending market.
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I own one of these mortgage companies and can say that when we do sub-prime mortgages, we go to every effort to try and ensure affordability. I can say that we have seen more success stories than failures because of the opportunity buyers would never have had. The best news is that we give all of our borrowers in these programs steps to take to qualify for conventional mortgages and lower payments significantly in the next 12 to 18 months. These loans are generally designed to be a bridge to better financing options in the future. By the way, we have to disclose all of our fees, including, yield spread premium, yet, they dont.
Real Estate always has cycles and the market values always seek adjustments during these times. Are the experts going to tell me that every down cycle weve had is because of sub-prime mortgages? You notice in the Wall street hype about the numerous sub-prime companies that have failed. Are we now going to blame sub-prime lenders for the downturn and forget the Asian market crashes that were the real triggers? Look at the past history of the cycles of Real Estate, than make your opinion. I would still rather invest in Real Estate than Wall Street.
In addition, to the ignorant professionals that state mortgage brokers and companies are sub-prime driven, think again, we do conventional and still beat our competition with better rate and terms. I am also a Real Estate broker and consultant and am always ready to learn, especially from geniuses like this. Remember, markets like this mean its a Buyers market and that means lower prices and more opportunities to first time home buyers who could not afford to buy during the inflated market. I would be glad to debate this with the propagandists. Im also a Selectman, so be careful, Im a politician.
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Foreclosure & Sub-prime Myths