Question: > >Generalizing them to the lending industry as a whole is idiotic.
> The Az Republic was just reporting the facts. Apparently you don’t > like them, or Meiko’s direct refutation of your claims. And no one > generalized them to the industry in which you obviously have a great > interest in defending. And in which you are obviously involved.
> >Subprime lenders, and more particularly, subprime borrowers are > >very small players in the home-buying business,
> Wrong, wrong, wrong. But presenting the facts on this point will > obviously have no effect on your thinking. Tough to be proven wrong, > repeatedly, eh? But some people don’t mind looking like arrogant > fools in a public forum. Emotional attacks are all that’s left, so:
> >You don’t happen to have your head up your ass, do you?
Answer: Actually, Caveat, I think people who have been around here for a while will recognize goaway’s writing style–if not his relatively new moniker–and recognize that he’s posted extensively and articulately on a broad range of financial matters. Allow me to suggest that rather than looking for an argument you consider that you’re both right: (A) your source may well have been indeed reporting facts, and (B) subprime loans don’t make up more than a small percentage of the overall mortgage business.
I do think it’s true that most lenders will encourage people to get the largest mortgage they think the borrower will pay back. And in a lot of cases that amount’s going to be way more than people *should* take on, meaning they’ll be unable to save or will have to scrimp on other expenditures. What these lenders are really after is people who will go without furniture or braces for their kids’ teeth but will make that payment every month.
As a person who’s sold properties on land contract I’ve personally been, in effect, a subprime mortgage lender. My own experience tells me that it’s indeed a niche market if there ever was one. Sure, when the borrowers default the lender gets the property but there’s a lot of work and expenses involved in making money through that process. The vast majority of home mortgage lenders are simply in the lending business, not the lending/repo business. When you get right down to it, they’re not even quite the *same* business.
It should come as no surprise to you that even the most respectable news organizations look for material that will grab people’s attention, and so one doesn’t always get a completely balanced picture from what are inevitably selectively reported facts. That’s what sells advertising, and subscriptions too.
Since this subject obviously is of a lot of interest to you, could you do a little research on the percentage of subprime mortgages vis a vis the overall market and get back to us? Thanks.
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