Would it be wise for the government to bail out those stupid people that took advantage of sub prime loans?
by Mortgage Rates on Sunday, October 17th, 2010 | 5 Comments
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No. we would be bailing out the lenders, not those who have lost their homes.
You are correct…this is a long overdue market correction. And if the government steps in at this point, the correction will not complete itself and worse, lessons will not be learned. Do NOT throw good money after bad!
I say no. But the Fed tends to make decisions that favor people whose lives don’t stand to benefit from volatility. I wish the Fed never tinkered with rates because a market crash would be a great buying opportunity and people like myself could make a lot of money.
Being in the Mort. Industry, no they shouldn’t. Why? The borrowers understood the terms, and the conditions when signing on the dotted line. The problem isn’t just subprime, it’s the NIV, the SISA the Interest only, the Alt-A…a.k.a. liar loans. Limited documentation hurts the lenders and creates a big risk for everyone.
Over the years, the government was forcing lenders to loan out to more minorities. Our bank got fined for not “complying” with these laws. It’s the same thing as the EEOC, lenders were being slapped on the hand for not playing fair.
Two parties to blame, the government and of course corporate greed. Because you know who if benefiting from this the very few at the top! Unfortunatley, it will take a long time to clean up this mess. We will all pay for this. But this problem started years ago, when the Feds mess around with the rates too much. I don’t think this was a big surprise for many.
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