danajohnhill.org | Hard Times Come Again No More

I am constantly annoyed by news reports describing the crisis in the housing and loan industry wrought by “unqualified buyers”. The insinuation is that lower-income individuals, with poor- or little credit history, have ruined everything for everybody by not being able to make their mortgage payments. Exuberant lenders, the perceived wisdom goes, gave loans to people that didn’t earn enough to pay the money back.

To me this smacks of blaming the victim. The reason these people cannot make their mortgage payments isn’t that they had poor credit history, or didn’t earn enough. They cannot afford to make their mortgage payment because unscrupulous lenders trapped them in crippling adjustable-rate loans. Brokers and lenders, in search of bigger and bigger profits, targeted individuals desparate for the American Dream of home-ownership. These borrowers ought, of course, to have had attorneys present to represent their interests, though I doubt they suspected bad-faith on the part of the lenders.

Now that the inflated housing market has softened, I find it loathesome to see the blame for it all heaped on the shoulders of the very people who are now facing forclosure. Why doesn’t the mortgage industry–and the media–recognize this simple fact: if these “sub-prime” borrowers had been offered traditional 30-year loans, they’d still be making their payments, and everyone would be happy.

Filed under: Rantings on July 11th, 2007