Grendel
01-11-2008, 07:45 PM
Reckless Mortgage Borrowers Do Not Deserve to Be Rescued
Jan 04, 2008
If you have followed the news at all over the last few months, then you know that the public has been spoon fed a spate of tearjerker news stories that are meant to paint struggling mortgage borrowers as victims. These stories talk about the importance of staving off foreclosures and helping people who need it, but they very rarely touch on the truth of the matter: most mortgage borrowers were reckless and do not deserved to be rescued.
By Pat Summers
The term predatory lending gets thrown around a lot. President Bush and others who support some form of mortgage rescue love to use it when they make speeches because it implies that mortgage borrowers are victims.
But what is a 'victim' exactly? And how does a mortgage borrower become a victim? Is it because of the rate they pay, the loan they get, the paperwork they sign?
No.
Just because some borrowers got a subprime loan when they could have gotten a prime loan or a high interest rate when they could have gotten a low interest rate, it doesn't mean they have been victimized. Perhaps they are just bad consumers who didn't get rate quotes from several different lenders like they should have.
And if borrowers get a risky adjustable rate mortgage versus a trusty fixed rate mortgage on the lender's urging or to qualify for homes they otherwise couldn't afford, it doesn't mean the borrowers have been duped. It means the borrowers were either living in the moment or stupid enough to think it unnecessary to research various loan products.
As for paperwork? Well, what kind of moron doesn't read a binding contract before they sign it? Mortgages are for grownups. Just because a borrower isn't adult enough to realize that reading is part of a banking transaction it doesn't mean that borrower is a victim.
Finally, there are a huge number of borrowers who LIED on their mortgage applications and schemed with brokers and other industry participants. These borrowers are straight out accomplices to mortgage fraud and do not deserve the victim label.
Ever Heard of a Calculator?
As bad as the other stories are, the worst mortgage borrower sob stories are those that involve people who have no knowledge of a calculator and what it does. These news bits encourage readers to feel sympathy for borrowers who can't afford ridiculously large mortgage payments.
It's absolutely ludicrous. Why should regular debt-fearing folks have a pity party for borrowers who were deluded enough to think it was a good idea to purchase a McMansion on a trailer house income? Because the lender said it was doable?
Puh-leeze.
Lenders are in the business to sell loans. It is the borrower's responsibility to crunch the numbers. In the end it is the borrower who must determine whether or not the purchase is 'doable.'
This is true with all purchases. Think about it. If a consumer goes into Best Buy and looks at a TV, it is the consumer who must eventually decide whether or not the flat screen TV the salesman is pushing is actually affordable. This isn't a decision that the salesman can make. It is no different with mortgages.
Rescue? I Don't Think So
The mere idea that mortgage borrowers deserve to be rescued is downright laughable. While there are people who are losing their home due to legitimate problems like job loss, health issues, etc., the majority of borrowers are looking into an abyss that they themselves created.
Rescuing them does nothing but reward their behavior. And considering the fact that the majority of troubled borrowers are victims of their own greed and stupidity, a reward hardly seems in order.
It's time for the U.S. Government, the media, and the American public to think about the definition of victim and apply it accordingly. If we can do that, we may be able to rescue people who actually need help versus mortgage borrowers who need little more than a slap to the head and a wake-up call.Personally, I have no sympathy for any of the lenders or 99% of the borrowers.
Jan 04, 2008
If you have followed the news at all over the last few months, then you know that the public has been spoon fed a spate of tearjerker news stories that are meant to paint struggling mortgage borrowers as victims. These stories talk about the importance of staving off foreclosures and helping people who need it, but they very rarely touch on the truth of the matter: most mortgage borrowers were reckless and do not deserved to be rescued.
By Pat Summers
The term predatory lending gets thrown around a lot. President Bush and others who support some form of mortgage rescue love to use it when they make speeches because it implies that mortgage borrowers are victims.
But what is a 'victim' exactly? And how does a mortgage borrower become a victim? Is it because of the rate they pay, the loan they get, the paperwork they sign?
No.
Just because some borrowers got a subprime loan when they could have gotten a prime loan or a high interest rate when they could have gotten a low interest rate, it doesn't mean they have been victimized. Perhaps they are just bad consumers who didn't get rate quotes from several different lenders like they should have.
And if borrowers get a risky adjustable rate mortgage versus a trusty fixed rate mortgage on the lender's urging or to qualify for homes they otherwise couldn't afford, it doesn't mean the borrowers have been duped. It means the borrowers were either living in the moment or stupid enough to think it unnecessary to research various loan products.
As for paperwork? Well, what kind of moron doesn't read a binding contract before they sign it? Mortgages are for grownups. Just because a borrower isn't adult enough to realize that reading is part of a banking transaction it doesn't mean that borrower is a victim.
Finally, there are a huge number of borrowers who LIED on their mortgage applications and schemed with brokers and other industry participants. These borrowers are straight out accomplices to mortgage fraud and do not deserve the victim label.
Ever Heard of a Calculator?
As bad as the other stories are, the worst mortgage borrower sob stories are those that involve people who have no knowledge of a calculator and what it does. These news bits encourage readers to feel sympathy for borrowers who can't afford ridiculously large mortgage payments.
It's absolutely ludicrous. Why should regular debt-fearing folks have a pity party for borrowers who were deluded enough to think it was a good idea to purchase a McMansion on a trailer house income? Because the lender said it was doable?
Puh-leeze.
Lenders are in the business to sell loans. It is the borrower's responsibility to crunch the numbers. In the end it is the borrower who must determine whether or not the purchase is 'doable.'
This is true with all purchases. Think about it. If a consumer goes into Best Buy and looks at a TV, it is the consumer who must eventually decide whether or not the flat screen TV the salesman is pushing is actually affordable. This isn't a decision that the salesman can make. It is no different with mortgages.
Rescue? I Don't Think So
The mere idea that mortgage borrowers deserve to be rescued is downright laughable. While there are people who are losing their home due to legitimate problems like job loss, health issues, etc., the majority of borrowers are looking into an abyss that they themselves created.
Rescuing them does nothing but reward their behavior. And considering the fact that the majority of troubled borrowers are victims of their own greed and stupidity, a reward hardly seems in order.
It's time for the U.S. Government, the media, and the American public to think about the definition of victim and apply it accordingly. If we can do that, we may be able to rescue people who actually need help versus mortgage borrowers who need little more than a slap to the head and a wake-up call.Personally, I have no sympathy for any of the lenders or 99% of the borrowers.