Mortgage mess

Now everyone in the world knows how risky subprime mortgage loans are…but what about before the bubble burst. Why now are so many mortgage brokers being arrested for lying on applications when the W-2 stated loan was based on misrepresentation. Stated income loans have many variations, but let’s start by being general. Initially these loans were given to self employed borrowers whose tax returns were not indicative of their true income – tax fraud. So at its inception, the stated loan is based on fraud. Then banks began widening those who could qualify for stated loans, including borrowers who were paid by W-2. If you receive a W-2 and a paystub , why would you choose to take a 10% interest rate over a 6% rate? Innately, the stated income loan is fraud… So why are the banks not criminally responsible?

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About whoistoblame

Mom of two, currently serving the last 12 months of my sentence in a halfway house and wanting to go home to my children.
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