Except for, I already had some debt when I started, so I got *slammed* when they did that. In theory, it makes sense, but doesn't everything?

I meant it, but not twice!

I've keep reading articles about this and it seems like a lot of people were just outright deceived. I don't know how it's legal either. One couple in a CNN article (I think it was CNN, I can't find it now) said that after they signed all the paperwork they discovered that the paperwork had been changed and they had signed for a different, more riskier, loan than what they had agreed to. They didn't read through the paperwork as they signed it, they described it as a "mountain" of paperwork and I'm sure they never imagined that someone would do something like that without telling them.

Then in a print article I read about a woman who remortgaged her house and her payments skyrocketed and she discovered her monthly income was listed as double what it was in reality.

I think I'm fairly smart and I would never guess that paper work I'd previously read through and was getting ready to change had been altered in such a drastic way without anyone saying anything.

There's a whole continuum that goes from just careless stupidity when it comes to money all the way up to "The Space Station Landed on Me and My Employer and My Dog and I'm Screwed" . Financial difficulties != stupid. I didn't mean to imply that, and I realize from my phrasing that could seem implied.

I don't think that the gov't bailing out someone like megan's example is a good plan , and sometimes it is going to be hard to figure out where a situation lies on the continuum, and thus how much responsibility the consumer bears. If there was wrongdoing on the banker/whoever's part, go after them to fix that. But I also think a fair bit is on the consumer to make a good faith effort to inform and protect themself.

I'd make a lousy commie, I think.

Financial difficulties != stupid. I didn't mean to imply that, and I realize from my phrasing that could seem implied.

Thanks for the clarification. That was how it read. I already feel like an idiot.

One couple in a CNN article (I think it was CNN, I can't find it now) said that after they signed all the paperwork they discovered that the paperwork had been changed and they had signed for a different, more riskier, loan than what they had agreed to. They didn't read through the paperwork as they signed it, they described it as a "mountain" of paperwork and I'm sure they never imagined that someone would do something like that without telling them.

Yup. And you get so many documents at closing. (As a side note, I'd suggest closing as early in the day as possible).

Then in a print article I read about a woman who remortgaged her house and her payments skyrocketed and she discovered her monthly income was listed as double what it was in reality.

This too. It wasn't mostly the borrowers overstating their incomes, but the brokers.

I keep wondering how that can be legal, but I guess after you sign the documents the brokers can say it's legal binding and you've agreed that everything in the contract is accurate.

Another nice "trick" is having a glaring error in the closing documents, so you send the package back. Then when you go through the second closing, you are so frustrated you just want to be DONE and you don't read to make sure that what you were told is correct and matches the documents in hand.

Should all this have been a big red flag - hell yes. Do reasonable people still screw up - hell yes.

Plus, I think there was a sort of "pack animal" mentality when it came to these types of loans and lenders. A lot of people were getting them at the same time and everyone felt good about it. And a lot of unethical and even some ethical lenders got caught up in being sucessful at this and started pushing them. One friend of mine in Los Angeles had great credit and still had to push hard not to get roped into one of these types of loans. A lot mortgage people are ruthless and are, in the end, sales people. They have to sell the mortgage to make their money and a lot of them don't care how they do it.

Sometimes, it is the consumer being excited that on $75k a year, they can with these types of loans "afford" a $650k house. But a lot of the times, at least in my presonal experience, it's ruthless mortgage brokers who maybe not outright lie, but twist the words so in the end, a good consumer gets fucked.

Very few people ever want to default on anything they're buying and feel like shit when circumstances happen and they can't live up to their obligations. If it were a handful of people, I'd be a little skeptical, but there are millions of people in these types of loans and helping them out now is going to make things better for all of us in the long run.

(I might make an ok Commie. Plus, I love red.)

For $500 a month that car had better give good road head while I'm listening to my books on tapes on the long drives.

Well, according to Ramsey (who, if you don't know, has a radio talk show where he helps people get out of debt), the average car payment in the US is $484/month. He has a little spiel about how if you invested that for X number of years it would grow to $2 million and "hope you like the car!". I don't buy everything he says (he big into tithing for one, and believes you should pay cash for everything), but he's really helped me work out a budget and how to stick to it.