So my Buddy Ben Drawbaugh over at his site posted up a little topic about the state of the economy and housing market and mortgage deal and brought up some interesting points. You can read some of the comments I left and his responses makes for some good reading and good debate material.
Anyways some points I raised was that if the banks/mortgage brokers weren’t so eager to give out “risky” loans as Ben describes them we wouldn’t be in the situation we are now, and having to bail out the companies at fault. However Ben states that if people weren’t so eager to accept those loans we wouldn’t be here either, which is a valid argument as well. I think thought that a bank who is approving these loans should be more fiscally responsible and do further checks on who they are giving these loans out to.
I will be the first to say that I am a recipient of an 80/20 ARM mortgage, but for me it was the only way to stay under the payments that at the time, my wife and I could afford. We both were fresh out of college, just starting out our careers, and just getting our feet wet in our marriage as well. We did the 80/20 ARM to avoid paying PMI as we weren’t able to come up with a 20% down payment on our new home, and if we would have gone with a conventional 30 year fixed we would have had to pay nearly $400 more a month with the PMI and at that time it just wasn’t possible, it would have put us up in the uncomfortable zone where we didn’t want to be, hell that $400 could have been a car payment or two for us.
In the end though I still don’t think it is right for our government to bail out these companies for the mistakes they made, and yet you still see the CEO’s and other higher ups of these companies walking away from the ordeal like nothing was wrong, and they didn’t do anything wrong. I feel if they didn’t give out such risky loans, to risky people without doing anything more than an income verification check, meaning they should actually look into their monthly expenditures as well, than we wouldn’t be in this precarious situation we are in now.
- Josh
I agree with those comments, about the CEO’s of those financial institutions should have the main responsibility in this matter. As it is a good point, about the people that did get into trouble with their mortgages, shouldn’t have been so eager to accept them in the first place, they were still deceived by the financial institution.
My point is this, we are all in this together. Rather than point the finger, going ’round and ’round the circle, isn’t going to do any good. The solution is not going to be an easy one. If you are responsible for getting into trouble, on either side, you should have to face the consequences. How else will anyone learn?