Upside Down Mortgage

Subprime Stories

Question: Who's to blame for the subprime meltdown?

The lenders or the consumers? Or is it a little of both? I, frankly, am somewhat saddened by the tighter mortgage standards. My husband and I have credit "issues" that happened in our twenties and doomed us to credit ratings below 650. A "second chance" mortgage was extended to us and we paid a little bit higher (6.6% vs. 5.75%) but we weren't made to put a gazillion down and be forced to take ARMS. Since we've purchased the home (my second, his first), we've been on time, every time. We've even refinanced. The moral of my story is had it not been for second chance loans, people like us wouldn't have been able to purchase a home. However, the same gift also can be a curse since I've seen neighbors go into foreclosure because unscrupulous builders push 3000 sq ft homes on people whose budgets couldn't afford it. What do you think?

Answer: The lenders are the ones who took the risk of lending money to people who cannot afford to repay the money. It is that simple.

Subprime crisis explanation by The Long Johns

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