The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Ramsey Su who wrote (569)	8/29/2001 8:47:13 PM
From: Tradelite	Read Replies (2) of 306849

Ramsey...in your scenario, why didn't John & Jane have an adequate cash cushion in the bank to support the risk of taking out a 90 percent loan on a house? If they lost their jobs, this cash cushion would give them a few months to find another job. In fact, lenders require this type of cash cushion---what kind of lender were they dealing with? In my humble opinion, blame goes first to John & Jane for taking on the responsibility of a 90-percent home loan when they didn't have the savings and job security to back up the risk...and secondarily to what must have been a predatory lender who was willing to take the chance on them without a cash cushion and without considering all the other risks inherent in their loan (i.e. presence of kids, car payments, etc. Are you certain this scenario is realistic today?

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