[She was] a single mother of four who wanted a house….in the heady days of the mortgage boom….She only knew that there seemed to be possibilities, even to those with little means such as herself, which is how a woman who had never paid more than $700 a month in rent and who had relied in recent years on Section 8 housing vouchers suddenly owned a house.
A four-bedroom house.
With 3 1/2 bathrooms. And walk-in closets, black granite countertops and a fireplace.
And a sale price of $698,000.
How White was able to buy this house — and the havoc that doing so wrought — is the story of a moment in time when all of the old rules about home-buying suddenly disappeared. It happened even though smart people knew better. It happened in White’s case even though the college-educated day-care provider knew deep down that she was not ready. In the expansiveness of the boom, it was easy to believe. And tens of thousands of people did.
Incredible, except it really happened. It boggles the mind. Read it all.
Those who pitched the mortgage and got her to sign it bear absolutely no responsibility at all. Isn’t capitalism great?
Yes, capitalism [i]is[/i] great. Scheming bastards who take advantage of the unsuspecting are not. Lay the blame where it belongs.
I read this in the WP, yesterday. It has happened more than once around the DC area, and I suppose around other parts of the country. Financial stupidity runs deep at every level of our society. Do our schools no longer teach basic concepts of money management and personal finance? Of course, Claiming an annual income in excess of $160,000, when the tax return states $15,000 is probably a criminal act.
Any mortgage broker so stupid as to place such a loan (did he even glance at the tax return?) should have to eat the loss, and for a time be barred from lending activity.
All that said, there is a real need in this country for basic affordable housing. The buyer could have afforded a house at about one tenth the cost of the one she bought — but there are no $60,000 houses within 100 miles of the DC area.
The mortgage broker and the seller were husband and wife
All bear responsibility, from the buyer to the real estate agent to the mortgage broker to the financial institutions who bought and sold the mortgate to those who pushed to change policy to allow this kind of thing. (Both those Democrats who pushed for the poor to be able to buy homes without having the income to support them and those Republicans who wanted to loosen restrictions on financial organizations.)