Question by John L: Who’s responsible for the mass number of recent and upcoming home foreclosures?
A significant number of people that don’t qualify for traditional home loans accept subprime loans to get into a home of their own, often without understanding that their mortgage will jump dramatically.
Lenders, on the otherhand, are making loans to people that can barley make the starting mortgage and will find it almost impossible to make the payment once the mortgage increases.
Many people got into these loans with the expectation that the value of their home would increase and they could refinance, but in the current cool market it’s nearly impossible to refinance.
Again, who’s to blame? A person for taking the loan they can’t afford or the lender that knows that the family will probably lose the house?
Answer by Cardinal Rule
Alan Greenspan, for flooding the market with liquidity. When credit is cheap people will borrow.
What do you think? Answer below!