Comments on: What to Do If You Have a Sub-Prime Mortgage http://www.americanconsumernews.com/2007/08/what-to-do-if-you-have-a-sub-prime-mortgage.html News for Consumers in Changing Times Sun, 12 Feb 2012 04:49:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: FICO Score Exposed! | Stutteringhelps.info-Articles Center http://www.americanconsumernews.com/2007/08/what-to-do-if-you-have-a-sub-prime-mortgage.html/comment-page-1#comment-6279 FICO Score Exposed! | Stutteringhelps.info-Articles Center Thu, 03 Sep 2009 22:58:19 +0000 http://www.americanconsumernews.com/2007/08/what-to-do-if-you-have-a-sub-prime-mortgage.html#comment-6279 [...] What to Do If You Have a Sub-Prime Mortgage A few years ago there was a seemingly never ending glut of capital available to be loaned out. Mortgage companies and banks did whatever they could to make mortgages look more desirable and offer mortgages to people who normally wouldn’t be able to afford them. This was not a sustainable…… [...] [...] What to Do If You Have a Sub-Prime Mortgage A few years ago there was a seemingly never ending glut of capital available to be loaned out. Mortgage companies and banks did whatever they could to make mortgages look more desirable and offer mortgages to people who normally wouldn’t be able to afford them. This was not a sustainable…… [...]

]]> By: Anonymous http://www.americanconsumernews.com/2007/08/what-to-do-if-you-have-a-sub-prime-mortgage.html/comment-page-1#comment-822 Anonymous Thu, 16 Aug 2007 19:51:00 +0000 http://www.americanconsumernews.com/2007/08/what-to-do-if-you-have-a-sub-prime-mortgage.html#comment-822 Not that I'm saying people shouldn't be trying to do something about it if they got into one of these loans, but a lot of your "advice" to them is pretty worthless given the current climate. Housing prices are falling dramatically, which means that a lot of these people are upside down on their loans. That means they really can't sell or refinance unless they can come up with the difference. The large number of people that are in this situation is exacerbating matters because it's driving home prices down and making it even harder for them to get out of their unaffordable loans.<br/><br/>This is a great argument for doing your homework BEFORE getting a loan, for having significant equity in your home from the start (so that you don't go upside down if there is a major market downturn soon after you buy), and for having plenty of emergency savings. But your advice isn't very helpful to people who already have these loans, most of whom did not do these things. I'm sure many of them would LOVE to "sell [their] house and rent for a while", but they can't do that very easily right now. The credit crunch has led to a severe tightening of lending standards, and this means that there are few buyers who would be willing to buy most of these homes unless they were STEEPLY discounted. And if these people could take that big of a loss on their homes, they wouldn't be in trouble in the first place. Not that I’m saying people shouldn’t be trying to do something about it if they got into one of these loans, but a lot of your “advice” to them is pretty worthless given the current climate. Housing prices are falling dramatically, which means that a lot of these people are upside down on their loans. That means they really can’t sell or refinance unless they can come up with the difference. The large number of people that are in this situation is exacerbating matters because it’s driving home prices down and making it even harder for them to get out of their unaffordable loans.

This is a great argument for doing your homework BEFORE getting a loan, for having significant equity in your home from the start (so that you don’t go upside down if there is a major market downturn soon after you buy), and for having plenty of emergency savings. But your advice isn’t very helpful to people who already have these loans, most of whom did not do these things. I’m sure many of them would LOVE to “sell [their] house and rent for a while”, but they can’t do that very easily right now. The credit crunch has led to a severe tightening of lending standards, and this means that there are few buyers who would be willing to buy most of these homes unless they were STEEPLY discounted. And if these people could take that big of a loss on their homes, they wouldn’t be in trouble in the first place.

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