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Last modified: December 13, 2008
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Looking forward to your return. I hope you will comment on the revelations in today’s Globe and Mail:
http://tinyurl.com/5gs7xn
I hope you will speak honestly about the role sites like yours play in creating this crisis. What warnings, for example, did you raise about the explosion of 30 and 40-year no-money-down mortgages?
It looks like once again the corporate buzz words “choice” and “competition” have been used as a smokescreen for predatory practices that will now cost the public purse many billions of dollars — not to speak of the terrible situation this will create for people unable to make their payments.
It would have been far wiser and economical for the government to invest in long-term, non-profit affordable rental housing solutions. How often has this site — or the mortgage and real-estate industries more generally — made this basic point over the last while?
As a mortgage professional who has approved over $80 Million in mortgages tod date, I strongly kept my client’s away from 100% mortgages. In fact I can say I only did one mortgage of this type and only because the client had 10% of the purchase price, so it was safe for them to take this product and they committed themselves to raises a family in the home for the next 10 years or so.
100% mortgages, in my mind, were for high net worth induviduals, folks who had the means to place a down payment, but did not because of business or tax planning reasons.
To this date I still recieve requests from clients wanting 100% mortgages, however, after exlaining to them the negatives of the program, they quickly realize it is a poor choice compared to building equity right away.
Hi Nathan,
Thanks very much for the comment. This story is worthy of wider debate so we will write a full post on it this weekend as opposed to just replying in this forum.
I would, however, caution you to not get too caught up in the sensationalism of this article. There are very pertinent details the authors ignored. We will touch on that further in our story.
Cheers,
Rob
Nathan,
Sites like this one play no part in “creating this crisis”. This site gives the reader fairly objective information. It allows readers to interact with one another on this board. The crisis you refer to is largly created by greedy individuals seeking to purchase homes they clearly cannot afford. I do not blame the banks either for this mess. They offered products (40 yrs)best suited to only a select few. Live within your means, or move to a postal code you can afford.