The title of this post is actually from the last line of this opinion column in the Miami Herald today, MORTGAGE SLUMP: Don't burden taxpayers with unwise loan. It could have been written by me because I agree with just about everything Froma Harrop said such as:
"Democratic emotions would be better spent pointing fingers at Republicans who refused to regulate the fast-buck artists pushing nasty loans on an unsophisticated public. House Financial Services Committee Chairman Barney Frank is now threatening to emasculate the Federal Reserve if it doesn't set humane rules for mortgage lenders. That's the way to go."
I have looked into foreclosures pretty closely, and I also believe what she wrote here is pretty accurate:
"Low-income people with poor credit records got dragged into the madness. Lenders hook these less-than-prime borrowers with very low come-on interest rates. Later on, the rates balloon, sometimes doubling the monthly payments. Attached to these subprime mortgages are a variety of fees and penalties that naive consumers barely understand."
Read the article, it is pretty good and read the Barney Frank article by Gimleteye (below) for a more in depth look.
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