Understanding The Issues: Subprime/Housing Crisis

[That Guy]

Originally Posted by firstdown

What evidence do you guys have to prove that lenders prayed on the elderly or hid information from their borrowers? I'm in a business when people refinance I'm notified and I cannot remember may of my eldery customers refinancing their homes. Banks are not in the realestate busines and usually loose money on forclosers so why whould they want these bad loans. If I'm correct my understandin was that if a person took out an ARM they had to get approved on what the loan would jump to when the ARM was up. The problem was that the people who took these loans did not pay down the princple or saved the money they took the extra cash and obtain more dept buying cars and stuff. Now that the ARM's are coming due the extra money is now tied up in new purchases.

an ARM isn't really a predatory loan, though taking out cash for boats and cars is extremely stupid. the predatory loans are the negative amortization deals (and also payday loans, though those are just ridiculous interest rates).