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February 16, 2008

Mortgage crisis

An awful lot of people claim they got duped into signing something they didn’t understand when they ended up in financial trouble over a mortgage. An awful lot of other people think the people in the first group are morons for not reading the disclosures and they deserve what they got.

Suppose you go to LendingTree.com, fill out the initial application, and then actually read the disclosure documents before submitting your loan request. Do you know what you have in front of you?

Sixty-two pages of legal text, 2,300 lines, 474 paragraphs, 19,361 words.

Thank goodness for lawyers and politicians for providing us with “truth in lending.”

Bob Allen
Kansas City



Bob, "lawyers, politicians, and truth" do not belong in the same sentence. The first two are liars, and the last is an unknown commodity in their respective professions.


Bob I agree with for the most part however there are a few sides to this.
There are the people that simply purchased to much house (greedy and vain) rather than being moderate and realistic.
Then you have some people that simply do not make enough money to be in home ownership.
You also have a credit rating system that is often erroneous and can not even be explained as to how it "rates" credit.
The real big problem are piece of grabage ARM lending products.
They simply need to convert people to 30 yr. fixed at the initial rate that was established at the inception of the l;oan, if they are sub-prime borrowers the rate was probably 2-4% higher than someone with decent credit. So many people think credit scores are strictly driven based on whether you pay on time, not true. There are many other factors to how FICO rates data. Even FICO does not understand it, they just sell a bogus system. If they simply convert people to fixed rate and the people still can not afford their homes, then they are in too much home or do not have the income to support ownership of thayt particlualr home. That is no one's fault.

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