Posted by Resident, a resident of Another Palo Alto neighborhood, on Jul 20, 2007 at 6:46 am
Ummmm...sub-prime loans put many people into homes who would not have been able to buy at any other rate. The vast majority have been able to stay, ( At least 85% of sub-prime loans have NOT defaulted, which means all those people own their own homes who would not have otherwise done so) and realize a great increase in their equity.
So, the problem was not with the sub-prime loans, but with the few people who took them and then did not plan for the increase rate that they KNEW was coming.
You can't legislate individual resonsibility.
And I certainly don't think it is good to take away the chance of those with a bad credit history, in other words HIGH RISK folks, to redeem themselves and get a loan for HIGH RISK FOLKS. High risk loans are, by definition, going to have a higher default rate, and thus have higher payment rates to make up for the higher risk the lending institution is taking.
I prefer to give this choice to everyone, and let the ones who can make it, do so. 85% of high risk people have made it so far. That is millions of people in homes who would not otherwise be. They are grateful they got in before the lending market came under pressure.
In the meantime, those who are losing their homes now, though sad, at least had the chance to own their own home, and may even have the built up equity in the home. This is not a bad thing. This is certainly better than not being able to pay rent and getting kicked out with no built up equity. And, if there is no equity, then that is just part of the risk taken by the person who bought.
Where is the outrage over people taking apts where the rent is too high and they go through their savings, then have to be evicted?
We don't need anybody else to make all of our decisions for us, because some people make poor decisions.
Posted by Resident, a resident of Another Palo Alto neighborhood, on Jul 20, 2007 at 6:52 am
To Rich getting richer: The poor are getting richer, also. The rich are getting richer faster than the poor are getting richer. That is perhaps what you mean.
Real income, adjusted for inflation, in other words, real buying power, in the lowest 20% of our nation has grown 35% since 1991. Not bad, is it? I would prefer to be poor and getting richer in a nation where the rich are getting richer faster, than poor and not getting richer in a nation where the rich are getting richer slower.I don't care about "gap", as long as I am getting better off.
Posted by Resident, a resident of Another Palo Alto neighborhood, on Jul 20, 2007 at 6:57 am
Wow, I just read the article again, and was struck by something. Here is the NAACP targeting Sub-Prime lenders, when for years we have heard how it just wasn't fair that minority communities ( which were higher risk) were not able to get loans at the same rate as other communities.
I guess the NAACP wants to go back to making sure minority communities have only the renting option, with no hope of buying.
Or are they saying that minority communities need to be treated differently from others?