Posted On: December 7, 2007, 1:48 pm CST

Posted By: Mia

The problem with that line of thinking is that the borrowers did not just "bite off more than they can chew". It should be noted that 10 years ago in order to secure a mortgage it was mandatory to have good credit, and at least 10% - 20% down payment. What happened about 5 years ago was the lending institutions opened the floodgates for anyone with a pulse to obtain a mortgage. They advertised bad credit, no credit, no money down financing. It was everywhere and every lender in the country had one or more of these types of programs available. They advertised "fire your landlord", "pay less then what you pay for rent". Their target market was poor to middle class working RENTERS. Very few tax and insurance escrow accounts were made mandatory and almost NO ONE was required to pay the private mortgage insurance premium. This epidemic has now reached rich, middle and the poor working class. It has affected black, white, yellow, and brown people. The inner city and suburbs in every state in the country. So do we place all blame on the borrowers who were basically seduced and entrapped into purchasing these homes? They were sold into the loan the same way that everyone else was. Expecting to gain equity in a few years, so they can refinance or sell. So should the unsuspecting and usually naive first time borrowers be punished for the industry's blatant attempt to erase financing requirements? Allowing someone with bad credit to purchase a home, does not make them responsible borrower. Most credit companies know that. You can't get a credit card with bad credit, so why would lenders offer homes to people with bad credit???