Sen. Christopher Dodd, chairman of the Banking Committee, said the mortgage industry has to take greater responsibility and federal regulators may have to intervene.
“We are seeing increasing evidence that this important source of wealth for so many American families is under a grave threat from predatory, abusive and irresponsible lending practices undertaken by too many subprime lenders,” Dodd, D-Conn., said at a hearing.
Translation: Too many middle class suburbanites are losing their homes and doggone it, we’re going to do something about it!
The problem isn’t poor people. Well, it is a problem for poor people, but the issue in this case is all the houses at $250k and up that are being foreclosed on.
Not even a week ago I was in a conversation with a buddy of mine whose a Real Estate Investor and he commented that some of the more upscale communities are a literal hot bed for foreclosures. It seems many people got into homes they couldn’t afford using adjustable rate mortgage products and now the mortgages are adjusting upwards and they can’t afford the payments. Some are so cash strapped that they can’t even afford the payments on a fixed mortgage, so many of them are losing their homes.
So, if you live in a nice neighborhood and notice your neighbors moving out in the middle of the night, chances are they are trying to save face, because they couldn’t keep up with the Joneses.