The Daily Dish | By Andrew Sullivan
(February 28, 2009) - The View From Your Recession:
I work as a credit analyst for a big bank. I work in a call center and take calls from people who would like to lower their interest rates or increase their credit card limits. Yesterday, I talked to a man in California who for the past five years worked as a 'sandwich artist' at Subway. His salary--and his only source of income? $18,000 per year. His recently foreclosed mortgage? $380,000.
The mortgage was individual, meaning no one else was legally or, more importantly, financially responsible for it. He had no down payment for the mortgage. The down payment was an additional $70,000 mortgage loan, also foreclosed. I assume he had someone living with him, who was able to help with the interest-only payments at least for a while until they reset to include the principal. But in the end he was given a total mortgage 25 times his income with no down payment.
Did he lie about his income and not provide documentation? Possibly. But the man was immediately frank with me about how much he made and what he did for a living. So assuming he was honest with the mortgage lender--who gave him the loan--as he was with me, their recklessness and greed become clear.