The Cure For The Foreclosure Epidemic: Part 4–They Shoot Horses, Don’t They?

Seems like you’ve been waiting for a new season of The Sopranos?  Yes, I have been away from my blog, and hope you understand. 

I recently watched the film, “They Shoot Horses, Don’t They?” which is about a lot more than a dance marathon.  I highly recommend it.  The story does center around a dance marathon that takes place in the 1930’s. 

Now that we have reviewed the beginnings of this foreclosure epidemic and looked at the various reasons for this disaster, we should look at the remaining dancers. Now, today, we clearly see that many lenders had offered programs that never should have been available.

Looking back, offering 100% loan-to-value programs, with (say) a 580 credit score, and not verifying any income, I would say that there was going to be a disaster for buyers.  Even less dramatic programs–high debt-to-income programs, no employment required, etc.–gave people their American dream that, for too many, turned into a nightmare. 

Today, as a loan officer who prides myself in studying and mastering loan program availability, I find that it is nearly impossible to remember the daily changes.  For me, this ironically means that the programs were so liberal and loose regarding the guidelines that almost (literally!) anyone could get a loan. 

Again:  almost anyone could get a loan. There were programs for anyone.

So…there were too many programs that offered the world to everyone. The risk, for lenders, was high, but everything seemed to be wonderful.  Now…not so wonderful.  Banks are going out of business, many people who work for these banks are losing their jobs, and, still, many, many people are losing their homes.

We all seem to have been in this marathon dance, and unfortunately too few people can enjoy the dance.

21 August 2007 | First Time Homebuyers, Foreclosure | Comments

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