"'Liar loans' prolong trouble; Foreclosure crisis could continue for 2 more years" by Associated Press | August 19, 2008
In the mortgage industry, they are called "liar loans" - mortgages approved without requiring proof of the borrower's income or assets. The worst of them earn the nickname "ninja loans," short for "no income, no job, and (no) assets."
The nation's struggling housing market, already awash in subprime foreclosures, is now getting hit with a second wave of losses as homeowners with liar loans default in record numbers. In some parts of the country, the loans are threatening to drag out the mortgage crisis for another two years.
Now, THAT is something the MSM is keping HIDDEN!!
Of course, that is a good thing, according to the front page of the Boston Globe.
After a while, the lying agenda-pushing really gets to you. doesn't it?
Many homeowners with liar loans are stuck. They can't refinance because housing prices in those markets have nose-dived, and lenders are now demanding full documentation of income and assets.
Many of the lenders that specialized in such loans are now defunct - American Home Mortgage, Bear Stearns, and IndyMac Bank. More lenders may follow. The mortgage bankers and brokers who survived were more cautious, but acknowledge they too were swept up in the housing hysteria to some extent.
"Everybody drank the Kool-Aid" said David Zugheri, cofounder of Texas-based lender First Houston Mortgage.
It was SPIKED Kool-Aid, too!!!
They knew if they didn't give the borrower the loan they wanted, the borrower "could go down the street and get that loan somewhere else."
Sort of like weapons sales, huh?
The loans were also immensely profitable for the mortgage industry because they carried higher fees and higher interest rates. During the housing boom, liar loans were especially popular among investors seeking to flip properties quickly.
The RIP-OFFS NEVER END, do they?
They were also commonly paired with "interest only" features that allowed borrowers to pay just the interest on the debt and none of the principal for the first several years. Even riskier were "pick-a-payment" or option ARM loans - adjustable-rate mortgages that gave borrowers the choice to defer some of their interest payments and add them to the principal.
While some borrowers were aware of their risky features and used them to gamble on their home's value or pull out money for vacations, others like Salvatore Fucile insist they were victims of predatory lending.
In AmeriKa? Nawwwwwww!
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