We now have another real estate mogul who purchased a $600,000 home with an income of $20,000. What graduate school is she going to so I can assure my children avoid going there? Not only that, take a look at a paragraph from the article:
Her 29-year-old daughter, a graduate student with an annual income of less than $20,000, qualified for a mortgage of $600,000 with no money down, split into two different loans at 8.75 percent and 12.5 percent interest rates.
With income from tenants, which didn't come right away, Beatty's daughter thought she could afford monthly payments of nearly $5,000.
But she hasn't made a mortgage payment in more than three months, and she's receiving letters threatening foreclosure.
Did you notice the interest rates on both loans? Too bad investors aren’t going to get a cent of this because she is already three months behind and will be foreclosed upon. This is another example, of many to come, of the mortgage industry pimping ridiculous loans to the financially retarded wannabe real estate moguls. Now the mainstream media is painting this as a sob story of poor little graduate student who got conned by big bad lender wolf into signing not one, but two loans to get into this mess. Are you kidding me? They both need to get a financial beat down; the buyer should have ruined credit for a long time and the lender should come up with the short fall and be prosecuted for fraud. No underwriting system would approve a $600,000 mortgage with an income of $20,000. Look at the interest rate on both loans and you know this crap has stated income written all over it with a tinge of fraud.
Now that we are entering the crisis stage, and this has been argued ad nauseam in many economic books regarding bubbles we start seeing an outing of the shysters and snake oil salesmen. Like shining a flash light on roaches these people are scurrying trying to find cover from their financial sins of yesteryear. It is despicable and they should run. All of a sudden they realize that lending out $500,000 to someone making $40,000 a year wasn’t so smart. Yet seeing the cracks in the system, someone making $40,000 a year is probably able to get a million in loans ala Casey Serin. How deep this crap permeates in the system is probably larger than your local county sewage plant. The stench is starting to overflow as the blistering hot summer sun starts to rise in the east and exposes the frauds across our nation. This financial violation of our nation is going to damage the economy for years to come.
But don’t worry! The DOW keeps going up on par with the dollar getting kicked in the nuts. Is this a coincidence? I think not. Yes, you just made 1% on your investments while the price of gas just went up 20%. Great job
I hope that we start seeing perp walks in the short-term of these real estate syndicate peddlers and their Gordon Gekko greed. And not only that, but a cultural shift from praying to the Visa and Mastercard god and move toward financial prudence but I doubt that. No excitement in maxing out your 401k when Paris Hilton is getting ready to hit the slammer. What the hell am I thinking trying to worry about global inflation when a Baywatch former star is eating a Wendy's hamburger hammered. This culture is addicted to debt and to drama. Sometimes the drama is caused by the debt. Saving is a thing only a few in