Sub Prime Mortgages - take two

[DrHenley]

Well it HAS been ten years since Sub Prime Mortgages crashed the banking system...

I guess that is WAY past most people's attention span...

https://www.cnbc.com/2018/10/12/thousands-line-up-for-zero-down-payment-subprime-mortgages.html

 

[TexasFreedom]

I've been wondering when this was going to come back. I've heard tidbits here & there. When you put zero money down to buy a house, a disaster is going to follow. No skin in the game, no hard work to keep it.

 

[Proud Prepper]

I've been wondering when this was going to come back. I've heard tidbits here & there. When you put zero money down to buy a house, a disaster is going to follow. No skin in the game, no hard work to keep it.

I agree, but the mortgage companies dont have any skin in the game either.

 

[tmttactical]

I told my son to hold off buying a rental property and wait for the next housing collapse, because with the no-down -sub prime loans it will happen again soon. The banks say they are making sure the folks can pay this time but just because you can make the payment while working does not mean you have the financial ability make the payments after a job layoff. No skin in the game means they will just walk away when it gets tight. When you have $30, 000 or more of your money in the game, then you will bust your butt to save your investment.

 

[Brent S]

The attention span of most Americans is sad. I guess greed and instant satisfaction override common sense. I don’t understand the whole attitude towards debt. Why would anyone want to be enslaved to another? Especially with a 30yr loan, but with cars, toys and the ultimate one to me, credit cards. An economics teacher told my son that his credit score was the single most important thing in his life. He advised getting a credit card and keeping a balance on it to build up the credit score. That’s insane financial advice. The best thing you can teach a young person is the value of saving and of buying what you can afford in life.

 

[lonewolf]

didn't they learn the first time?
or is it" those that fail to learn the lessons of history are destined to repeat them"??

 

[Mountain trapper]

If there is another bust coming, which I believe there will be, it'll provide some great buying opportunities for the smart investor. During the last downturn in the real estate market several of my friends made some great buys in places like Las Vegas, Florida, Hawaii and Phoenix.
Zero down loans are generally a bad idea for most people. But what's a really bad idea is when people borrow up to their maximum limit, plus go with a zero down loan. I don't have a problem with going with a 30 year mortgage, provided that you have a plan to pay it off early. Back when I had a mortgage I'd always make two payments per month. It's surprising at how much interest that cuts off your loan. I've also never paid more than 7 years on any mortgage that I've ever had. The "trick" is to come up with a plan and stick to it. And part of that plan is to eventually get out of debt and then stay out of debt.

 

[Maverick]

"Magdalene Altidor lost her home to foreclosure during the subprime mortgage crisis, but this week she was first in line at a four-day event in Miami where borrowers with poor credit were offered no-down payment, low interest rate loans."

deja vu