Credit expert: ways to deal with the mortgage crisis

The subprime market is nothing but corporate greed at it's best, it should never have existed, I have been waiting for years to see it fail, and now that it has, the lenders can take it on the chin, right where it should be, anyone invested in this scheme diserves what ever happens, absolutly no sympathy here.

A major problem with the suggestion to talk to your lender and seek temporary relief or refinance is that a large number of these borrowers have never learned financial discipline. Given relief, they will finance something else. Lenders are the problem. Any lender advertising 'Bad credit-no problem', gets what they deserve when the loans go bad. If they finance one hundred percent of inflated values, they're going to lose money when real estate prices decline. With past due mortgages approaching five percent, it's pretty obvious a lot of bad credit decisions have been made. The lenders assumed in making these loans prices would continue increasing, covering them in foreclosure proceedings. It makes no sense to believe anyone with a poor credit rating is going to pay their mortgage any better than they've paid anything else.

Easy credit does not teach financial responsibility.

Perfect quote, "Easy credit does not teach financial responsibility" and the lenders who take advantage of people in this way suffer, and rightfully so.
Thanks for posting this Tom.

Would you believe that "Easy credit does not teach financial responsibility" still (as of yesterday) is being offered to unsuspecting individuals !
I stopped by a new hi rise developement on the southwest corner of Grant Park in Chicago yesterday.
Not only were the highly inflated prices (450K for a 2 bdrm/2bath, 1300 sq ft) still existant, but I was offered an '80/20' adjustable/interest only loan !! which purported to 'save' me $13,500 in the first year....To the 'financially challenged' instant gratification seekers, this must seem like a 'must buy.' This is a perfect example of developers/lenders who, in order to sell highly inflated property i.e. greed, are basically conning the unwary into fnancial collapse.

I see lot's of criticism for the Sub Prime Lenders but nothing that "solves" the problem of Sub Prime borrowers! There's a billion reasons people needed to get sub prime loans in the first place, not just because they were credit risks because of not paying their bills in the past, how about those who had major accidents, health issues, or any other financially related (how about identity theft?)issues in their lives that made their credit crash. I just want to remind everyone, not everybody is a "Bad person" just because their credit rating isn't good, and the entire "life experience" does not resolve completely around money! The whole "concept" of credit and "money" was invented to "help" human beings. I think we need to find other ways to deal with the sub-prime issues instead of just saying... let em burn! I happen to live in an area of Ohio where we're experiencing the highest foreclosure rate we've ver had. Houses sit empty here, the Banks won't do anything at all to maintain these empty houses, in fact they're in the practice here of foreclosing, buying the properties at auction, and never transferring the "Deeds" of these properties into their names so they can't be "sited" (and made to repair) for the properties deterioration. Tell me, who gains here? The Landlords (who'd usually buy these properties, are staying completely away from them. Jobs are scarce and tenants are losing their living places too. And now, this State has passed a LAW against sub-prime loans. So the homeowners can't sell, the Landlords can't sell, the Tax base is eroding at a huge rate, the Banks are losing, Realtors are losing, Insurance Companies are losing, Contractors are losing.... just who's gaining anything? No-one! Sorry, I think we're going to HAVE to see even better rates and more subprimes. But, I could be wrong.

In Australia, our Credit Code provides for relief if lenders recklessly lend to people who they know cannot afford it, and a few lenders have lot their foreclosure rights and the money advanced. Something to think about? (Too late for this credit cycle, but since you'll only be sensible for about 5 years till memories fade, it will come in handy next time.)