People know how much they make and how much they can afford to spend on a mortgage every month. They are told at closing that their rate will go up in so many years (hence the meaning of adjustable). They are not sold an overpriced home/lot by a builder. They BUY an overpriced home/lot. It's a whole nother ball game when someone is living within their means in a new home that they love and can afford and they get laid off. Those are TOTALLY UNCONTROLLABLE circumstances. Those are the people who really deserve all the help they we can give them..

From the BANKER side of the coin........I work for a private sub-prime Bank and while I agree that there are certainly cases of borrowers being misled by slimy salespeople and builders, there are MORE cases (in my opinion) where the borrowers/homewoners willingly bit off more than they could chew.  Everyone wants a bigger, better, badder house and they want it NOW without considering their future.   These people BEG for these loans so they can qualify for a house they should never have purchased in the first place.   Yes, shame on the lenders and the industry for creating loan programs that allow people to qualify for loans they will eventually not be able to afford, but the real BLAME should lie sqaure on the shoulders of the borrowers.    At best, they can plead stupidity and ignorance.   Buying a house is the single most important investment you will probably make and if you dont take the time to review your finances and what you are REALLY taking on, SHAME ON YOU.  People are so quick to blame someone else for their own mistakes.  It is time that people take responsibilty for themselves and their own greed.  If you want to keep up with the Jones' , please be preapred to pay the freight.  

I have a mortgage with Countrywide. It is a fixed very good rate, I have not had ANY problems with them. I also have four children, and am greatly affected by gas prices, food prices, etc! I also have much more credit card debt then I have ever had(my fault)BUT I would never not pay my mortgage! That is my home, and if it came down too it, that would be the only bill I would pay! I do agree some people were misled, however we all are responsible! We all want more and more, and we all want it NOW! That is my problem. I will eventually pay down or off my debts, will have learned my lesson, taught my kids a thing or two, ALL by managing to not blame others, and pay my bills no matter how painful or "inconvient"!

I used to work for countrywide, and trust me they knew exactly what they were doing.  Even when the subprime market was starting to fall apart in early/mid 2006...THEY EXPANDED THEIR SUBPRIME GUIDES TO GET MORE BORROWERS WHO COULDN'T QUALIFY TO QUALIFY!!  I sat at a conference and listened to a guy high up in the food chain (we'll call him...Deff Jetweiler) talk about continuing to push subprime and option arms, even in the face of the market beginning to come apart...and in the same breath he had the balls to include the words 'responsible mtg lending'.  At the time I had only been in the mtg business for 5-6 years and I thought to myself...either A) these people don't see the problems this is going to cause down the road, and I'm a genius...or B) they know exactly what they're doing and they just don't care...you decide which you think is accurate...but these people weren't stupid!!  I watched the entire east coast subprime sales team get up and actually walk out of that room!!!  I will say, there are many people who wanted these loans, because they wanted a piece of the 'american dream'...which is a joke, because the idea that people are somehow owed this suburban life has only existed since the end of WW II...but that's another story all together...we'll see the collapse of this way of living in the near future, so keep your eye on that being the next big thing.  Back to Countrywide...I sat around and watched people have their lives destroyed becasue they were being let go, and meanwhile Angelo's pulling in $100 + million a year...upwards of 30-40,000 people were laid off, and this guy's pissed off because he wants the tax reimbursed for his wife using the Co's private jet.  The sad part of all of this is...it's not just him...this is corp greed and the very essence of what it means to be criminal.  

I  won't even really get into the idea of hard money loans (which CW bought on the secondary market from another Co I used to work for)...where people couldn't afford the 6% payment they were currently tied to.  So in order to help them out, we gave them rates between 9-12%...stated income to 80 LTV and allowed a seller held second to cover the rest.  These loans were being manufactured with the intent of lenders being able to take the house once the borrower was unable to make the payments (the entire transaction revolved around the appraisal...as long as the lender felt ok about the value of the home, they were fine with it)...oh and there was a hard prepay, so refinancing wasn't even really an option...and broker's were able to charge points up to the max allowable by the state...ahh the mtg business, prob the shadiest thing I've ever been involved with...I wake up everyday and give thanks that I'm no longer a part of that mess.

I don't like what I am hearing.  First of all, lets remember that when these unfortunate people signed this loan papers, the were under duress from loan officers that work a commission to get these loans finalize.  I believe there is fault to go around, but what is that solving now.  I believe that like the other writers have said, if the mortgage companies are willing to take astronomical loses on the mortgages by foreclosing on people that can pay their mortgages, but cannot find new lenders to refinance these loans, and they are willing to sink in additional monies to pay realtor fees, lawyer fees, sheriff's fees, court cost, etc.; it would appear more logical for them to extend these loans, they will lose some money in the short term, but may still make a decent profit at the end.  Unfortunately these CEO's what to make huge amounts of money upfront, even if they are digging their whole company under.  What does it really matter to them???  When they get replaced they have their severence pay of a couple million dollars or more to go ride out into the sunset.  We all have to take some responsibility for this mess, but we must remember that the people that had the most to gain when these mortgages were written up were, the loan officers, banks and Mortgage companies.  We all got caught up in the hype!!!  And now even if our mortgages are not in foreclosure we are still paying since the value of our homes are dropping with no real end in sight.  Instead of pointing figures, we should try to find a common solution to help these people that are losing their homes through no fault of their own, and even the ones that have fault.  They still need a home, and its truly a shame to see these beautiful homes go unattended and have whole neighborhoods become ghost towns, because we are playing the blame game.  We should start to put pressure to the powers that be in Washington to have these mortgage companies be more flexible.  Ultimately, we are all going to pay.

I feel compelled to comment. I was given a rate by our broker for a 30 year fixed mortgage. I was NOT a "subprime candidate". I was 25 and naive.  I found out at the time of signing that suddenly, I had an ARM. I didn't know what that was and that is fairly typical.

Example: How many of you know how much money is made on the last car you bought? You think you got a good deal? Let me tell you something. The average used car sells for $4000 over what the dealer paid and the finance office can add 3-4% points to your loan without your ever knowing it. Did you buy a warranty? You paid too much. 85% of the folks that came through my door when I worked in that industry had no clue what they were doing when it came to purchasing a car. So should I just say too bad...you didn't educate yourself? Maybe. Should I say that the folks in the finance office aren't breaking any laws and there is a sucker born every minute? It's already said everyday in that business. But if there is anything I know for sure, there are industry secrets...and it doesn't matter if it's cars or mortgages.

When I said I didn't agree to an ARM I was told, don't worry, you can refinance before the ARM matures. And the real estate agent said I needed to sign because the other seller was waiting on my financing. A year and a half later, plenty of time before the loan percentage changed, I started shopping for a better interest rate that was fixed. I had been moved for my job out of state but could afford to rent out the house. I found out that my house had been overvalued in the appraisal and because I had to rent it out;  no one could finance me without 20% down...even though I was a 700+ beacon.

Long story short, my credit is shot and the house foreclosed. Should I have been better educated? Sure. I'll take my responsibility. But there is plenty of responsibility to go around. Greed begats a lack of morals, which both my appraiser and broker lacked. The good thing to note here is that there are a whole lot of us out here who won't be fooled again. I will eventually get my credit back in good standing and I won't be falling for any more fast talk from brokers.

The feds, are charging this lenders a very low interest for their loans but this lenders are charging  us from 6,7 or more interest rate. ther are not passing any of the savings to the consummer to help struggling customer like me who wants to refinance to lower my payments and not be force to loose my house.

I ask countrywide if they would help me  refinance but they want to charme more than what I'm currently paying they only care about money in their pocket.

You know, it's interesting how defensive lenders get when economic times are bad.  Historically, it's reminds me of the early 30s.  Maybe, consumers need to be reminded that banks, bank holding companies, and, indeed, all lenders are nothing more than "moneylenders" in the biblical sense.  Unfortunately, they will not be driven from the Temple; they simply will be given more money with which to play.

I am so sick of hearing about all these people that fell prey to "Predatory Lenders".  SHAME ON THEM!  

In the stone age, the stupid one's were eaten by predators, which quickly solved problems.

If you are too stupid to read the fine print on your Mortgage, then Shame on you.

I for one am living within my means.  Maybe I'm not in the McMansion i want and feel I deserve, but good things come to those who wait!

It's exacty how a couple of people above said - if you're going to be a big boy or big girl and buy a house, then act like a big boy or big girl and own up to the fact that you bought and need to pay for it.  Companies don't just make stuff up like fees/rates, etc., it's in the thousands of documents that people complain about having to sign to get the money.  People can manage to complain about the paperwork that they sign, but can't manage to spend half of the amount time that they complain about it actually reading it or trying to understand what they are agreeing to... that's lazy and dumb (as well as not acting like a big boy or big girl).  

Sorry to keep going, but the more that I think about this, the more that it makes me mad that there are so many people out there that can't think for themselves or even take care of their families because they are too busy running out and buying houses that they have no way of affording, but think that they must have.  They spend time with lenders asking them t find ways to "creatively" get them in that "dream house", but then when things go wrong, are the first to blame the same lenders who got them exactly what they wanted.  The lender didn't drag them out of their house, show them the new house, and then force them to buy it.  Yet, these people who will sit there and complain about it, are also the ones that could have been spending that time in their current situation with their previous home, or if they needed to move, looking for a more reasonable home, but instead they were out dreaming it up big until reality kicks in and they wake up from their little dream.