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: Valuepro who wrote (287784)	10/30/2010 10:41:51 AM
From: Les H	Read Replies (1) of 306849

"In this last real estate cycle, all players threw caution out the window thinking rising prices would continuously bail them out of their mistakes - lenders and borrowers alike. There may have been some borrowers who were too stupid or ignorant to know what they were doing, but I doubt it was the majority who now find themselves underwater. Ever heard of "liar loans"? You can't be an unknowing liar." A lot of desperate people were pushed into refinancing their homes and pulling out the cash to pay off medical debts and other big debts that could've been discharged in bankruptcy court without losing their homes. Because of their financial circumstances with often no jobs and huge medical debts, these people could only get high interest rate loans on the new much higher loan balances that they had no hope of ever making payments on. They had no business being sold loans. The states tried to clamp down on the predatory lending practices but was blocked by the Bush administration on the grounds that these were national lenders over whom the states have no jurisdiction.

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