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Truth about Subprime PDF Print E-mail
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Subprime is getting a bad rap in the media these days. Its not only fashionable but politically-correct to demonize subprime loans, and the loan officers and companies who broker them.

If you have seen any cable news or local media stories, you might think that there was an evil underworld out there, waiting to prey on unsuspecting consumers to trick them into loan-shark style mortgages with the hopes of one day foreclosing on their property. You might even see a human interest piece where some lower or middle class family is profiled (probably elderly, a minority, or a single mom) with some heart-wrenching story about losing their home and how they were taken advantage of. Listen closely and other buzzwords/phrases will be thrown into the mix; discrimination, racism, predatory lending, taking advantage of the elderly, con-artists, swindlers, bait and switch, etc. These stories are sensationalism, and sensationalism generates ratings. Who cares about the truth?

Want some subprime truth?

Subprime is not bad. Subprime loans are not some trap designed to lure unsuspecting borrowers into paying more money they than should. There is not an evil megalomaniac sitting in the dark confines of a lender's office hoping to foreclose on your neighbor's home. Adjustable Rate Mortgages were not designed to trick someone into losing their home. Interest-Only Mortgages were not offered with the hopes that one day the homeowner would have to chose between basic necessities or paying their mortgage. Equity Lines of Credit are not evil tools designed to steel your equity.

Now, repeat after me. The lender does not want to foreclose on a home. The lender does not want to foreclose on a home. The lender does not want to foreclose on a home.

 
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