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No. of Recommendations: 1
There is a contract that spells out the terms of a loan. If people choose not to read the contract, don't get further clarification if they don't understand it, or understand it and decide to get too much mortgage anyway, that is not the fault of the lender. If I buy more car than I can afford, it is not the fault of the dealer.

These people have my sympathy, but why on earth should people be relieved of their personal responsibility? We aren't children, after all.


True, we people on the board aren't, but, as we know, there are plenty of people who never understand a lot of financial principles, and they can be mislead and lied to by their brokers. That's why I think it would be a helpful idea on the part of the industry if they published general guidelines about how much mortgage payments would alter if the customers took out a balloon mortgage or some other type of non-traditional mortgage, or gave a better scale of what payments would be on a traditional mortgage. This would just be a regular page that the customers could read with the rest of their paperwork. People don't always know how to get accurate information, and, as I said, I'd vastly prefer that the industry did some self-policing rather than allow Congress to do it.

AJ was suggesting a class, but I think that's a bit much. A couple of sheets of paper with various income levels listed, along with how much mortgage is recommended. Or a printout explaining, with clear numbers, how the loan will change if it's a non-traditional mortgage.

Once the industry can prove that the customers had accurate information, the guvmint might back off.

Yes, I know that it seems like a lot of trouble at first, but if foreclosures are costing companies to the point of job layoffs, then it would make sense from their end.

By the way, in the Wall Street Journal (which is where I've been reading most of this information over the past couple of weeks) they said that some of the spillover was affecting commercial landlords, because the big mortgage companies were cutting back on space.

Nancy
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