Subprime: Unforseen Consequences

The subprime follies that we are witnessing are without a doubt on top of every serious financial analysts mind. What everyone is afraid of is what this will mean on the general state of the economic in 2007. This article points just to that. An excerpt on reasons for this is below:

Even more tragic is that many of these borrowers had to pay costly origination fees, which left them with little cash to invest in their new homes or to service their mortgages as their adjustable rates rose.

Predatory practices by some lenders in the sub-prime marketplace, with money for loans easy to come by, only exacerbated an already explosive situation.

As you can read, it is not always the fault of the person who is now in debt that he is in debt in the first place. While he or she should have known about the consequences of their borrowing within the terms of their own personal financial situation, it is also the lending institutions that should have taken this into account.

Bad lending practices are also unpatriotic. You should not try to swindle your borrower, who is looking for money because he or she has no money in the first place, from some extra cash. Doing this, and other things, leads to the current situation we are in.