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Why did people take mortgages they couldn't afford back in 2008?

by pereinar887 from Auburn, Massachusetts. Oct 4th 2019 Reply


Steven Brand (stevenbrand)
#4 ranked lender in Minnesota - 120 contributions

One word... GREED. From home-buyers, builders, appraisers, Realtors and mortgage brokers. It was truly greed from all angles.

Oct 4th 2019
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,092 contributions

You had three major reasons for most people. The first being as home prices were shooting up, even modest homes started becoming over priced for many people. So the thought was even though on the high end of their price range, it was better to buy a home now than in a few years later, when house prices would be even higher. The second being people thinking of quick money investor type. Buy the house today, because I can sell it in a year for a huge mark up. Many people won on that gamble early in the run up, and of course the people near the end lost their backside. Finally, you had plenty of people who simply thought they deserve the big monster beautiful home today. Gimme gimme gimme... I'll figure it out later was a popular attitude. It was this last group that bugged me the most. People were allowed to "act the fool" because of many factors in the lending market that allowed them to buy homes well above a common sense budget.

Oct 7th 2019
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