What Really Happened?

The subprime industry was at one time, an option given to those with damaged credit, and people who had few options to obtain a home. Much research has shown that an astounding number of people who mortgaged under a subprime loan could have qualified for much better. We have a combination of lenders wanting to pocket quick money and a buyer that wasn't educated on the biggest decision of their lives.

Homeowners were found in a situation where credit was incredibly easy to obtain and at rates too good to pass up. Buyers often didn't investigate the catch, they just went for it, caught up in the excitement of buying a home, renovating their homes, or purchasing the extra car, or furniture they have always wanted. Debt-ridden consumers were offered an escape route from debt, rolling up all their credit cards into one low payment.

With aggressive marketing tactics, subprime lenders are not upfront with closing costs, percentage rates and high hidden fees. Often times the fees were categorized as "other", with fees into the thousands with no explanation. The industry has set up their customer to fail, giving them a discount on their loan payments for the first few years and doubling it only a few years later.

Many people believe there is more to the story than just a lousy business plan formed by the banks. Loans are bundled together and sold as securities on Wall Street, which allowed the lucrative deal of lending high, and raking in as much money as possible by selling mortgage securities to investors. It was a process that made millions for the CEOs of these companies, leaving millions homeless. It wasn't only the mortgage companies that resorted to immoral acts with the lure of millions of dollars, but everyone in the industry jumped on the band wagon. Brokers, real-estate agents, contractors, and home investors to name a few struck rich off immoral practices causing harm to the customer without care. Today we have millions with ruined credit, many homeless, and unable to buy a home. Entire life savings, and homes that were paid off where auctioned at the court house due to bad decisions on easy credit. Don't be a victim, arm yourself with the information that will protect you and your family.