U.S. Insured Mortgage Defaults Up 38% in February

By | April 1, 2008

  • April 2, 2008 at 8:11 am
    CJB says:
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    “Lenders nationwide have been tightening their underwriting standards, forcing prospective homeowners either to put more money down, to find new means to borrow, to buy less costly homes or defer purchases altogether.”

    This paragraph from the article is quite telling in regards to what people think they have a “right” to.

    I don’t want to say “Back in the day…”, but back in 1991 when I bought my first home, the interest rates were over 9% and my wife and I had to supply massive documentation and put down a good bit of money (along with MPI coverage) to qualify for the loan. We were 22 at the time and knew to stay within our means (we knew what we could afford)- something we learned from our parents and in school.

    My parents couldn’t “afford” to buy a home until they were in their 30’s, but they, too, had to go through massive loan underwriting and documentation.

    Since when has the “American Dream” become the “American Right?” Society has confused the “right to an opportunity to own a home” with the “right” to own a home. We only have the right to an opportunity, and we have to qualify for that opportunity.

    Simply, if you can’t afford the payments – you should know it. Also, anybody that buys based on future expectation of income is, well (I hate to be so mean, I really do), stupid.

    If you are not smart enough to understand the loan and the repayment schedule (or scheme), you should not take the loan.

    I’m not the smartest man in the world (and many will agree with that), but I’m smart enough to manage my money and do my best to understand the contractual commitments I’m making.

    The government’s job is not to protect us from our own stupidity. If I make a bad investment, I lose money. I should not expect the government to return my losses because I made a dumb decision.

    Now, lenders who lie or encourage lying on the “documentation” should have some “skin in the game” and be punished by some means – be that the court system or by regulation, I’m not smart enough to say.

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