Comments on: Defaults Rising on Subprime Loans. What did New Century and Everyone Else Expect? http://moneysmartlife.com/defaults-rising-on-subprime-loans-what-did-new-century-and-everyone-else-expect/ Money Tips for a Better Life Thu, 17 May 2012 16:08:14 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Jeremy http://moneysmartlife.com/defaults-rising-on-subprime-loans-what-did-new-century-and-everyone-else-expect/comment-page-1/#comment-1530 Jeremy Thu, 15 Mar 2007 16:49:34 +0000 http://www.moneysmartlife.com/defaults-rising-on-subprime-loans-what-did-new-century-and-everyone-else-expect/#comment-1530 I always wonder why this sort of news seems shocking as well. It isn't just with issues like the housing and lending market, but even the broad market decline a while back. Why does this surprise anyone? For example with the markets, we've been on an extremely bullish run for 3 straight years, and it comes to a shock that the market pulled back a few percentage points? OMG THE SKY IS FALLING@#)(*#% Like we were supposed to continue to see 10-20% returns every year... give me a break. Same with the subprime market as you mentioned, seriously, did these lenders actually think this would be a good idea? You lend more money than you should to people who are a greater credit risk... and they didn't see a potential problem cropping up in the future? Granted a lot of this stems from the lenders who were providing and marketing this type of lending to people who probably couldn't afford it, but I don't have a whole lot of sympathy. Like you said, common sense is all but gone from the majority of this country. You have kids right out of college who land their first $45k a year job and go out and buy a $350,000 condo because the bank says they can. Now they realize they can't afford the new payment since they got sucked into a crappy ARM and rates have gone up and on top of that their real estate hasn't appreciated like they thought and find themselves up poop creek without a paddle. So anyway, I do feel bad that the lenders pushed so hard and marketed these loans to people, but I really don't feel bad that people aren't smart enough to assess their situation before making a substantial purchase like a home and end up getting burned. Sometimes the only way people learn is by experience. I always wonder why this sort of news seems shocking as well. It isn’t just with issues like the housing and lending market, but even the broad market decline a while back. Why does this surprise anyone?

For example with the markets, we’ve been on an extremely bullish run for 3 straight years, and it comes to a shock that the market pulled back a few percentage points? OMG THE SKY IS FALLING@#)(*#% Like we were supposed to continue to see 10-20% returns every year… give me a break.

Same with the subprime market as you mentioned, seriously, did these lenders actually think this would be a good idea? You lend more money than you should to people who are a greater credit risk… and they didn’t see a potential problem cropping up in the future?

Granted a lot of this stems from the lenders who were providing and marketing this type of lending to people who probably couldn’t afford it, but I don’t have a whole lot of sympathy.

Like you said, common sense is all but gone from the majority of this country. You have kids right out of college who land their first $45k a year job and go out and buy a $350,000 condo because the bank says they can. Now they realize they can’t afford the new payment since they got sucked into a crappy ARM and rates have gone up and on top of that their real estate hasn’t appreciated like they thought and find themselves up poop creek without a paddle.

So anyway, I do feel bad that the lenders pushed so hard and marketed these loans to people, but I really don’t feel bad that people aren’t smart enough to assess their situation before making a substantial purchase like a home and end up getting burned. Sometimes the only way people learn is by experience.

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