Let's pretend I am a paralegal and work for a sole practitioner who does real property closings. Let's also pretend that I am the Queen of Real Property, 'cause I am.
So, what has changed in the mortgages that we see now compared to the mortgages we saw in the last 10 years when mortgages were given to people with lousy credit, no down payments? You remember - The American Dream Grants (cough), I mean loans. The ones we taxpayers are paying to bailout the purchasers of those overvalued pieces of paper?
Not one fucking thing. Nada. Nothing has changed. In fact, the mortgages have become even more bizarre. Bad credit? No down payment? Want a house anyway? Call your friendly "mortgage broker" and he or she will find some obscure bank, most likely located out of your state, who will email you the closing documents, and take your money. In fact, I would venture to go out on a limb and say if you can't afford a conventional mortgage from a conventional lender, you can't afford that house.
The worst scenario I've seen in the last few months was a house selling for $65,000.00 with a "gift" from the seller to the buyer in the sum of $30,000.00. This means the house was only worth $35,000.00 in the first place, but in order to get the numbers to work, the home price was inflated, the seller pledged money that never really existed, and the buyer got the home that he can't afford and will probably lose.
So much for fixing the Housing Bubble. Get ready for a whole new round of bailouts in the coming years.
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