Don't tell me that the Republican behind this scheme didn't know what he was doing. $15,000/yr field laborer approved for $720,000 home loan. You know what happened:

"We wanted to live in Watsonville," says Rosa. "But [the real estate agent] said the houses there were older and more expensive." One of the first homes they were shown was a "new" four-bedroom, two-bath house in Hollister for $720,000. When the Ramirez's heard the price, they worried that they couldn't afford it.

But the couple says they were assured them it was possible. "The monthly payment was supposed to be $4,800, but then after we bought it, it went up to $5,378," says Rosa, speaking of their zero-down mortgage with a one-month "teaser rate." "Our agent told us that once we refinanced, we could get the payments down to $3,000 or less." For a number of months Avila, who arranged for the loan with New Century Mortgage, paid the difference between what the buyers had said they could afford -- $3,000 -- and the actual loan payment. According to the buyers, this arrangement was supposed to carry them over until the group refinanced.

The money-saving refinance failed to materialize, and eventually, Avila stopped subsidizing their current mortgage. (According to my analysis of interest rates during the period, hitting the $3,000 number would have been virtually impossible under any circumstances. An interest-only $720,000 loan at a 5 percent interest rate [15-year fixed] yields a $3,000 mortgage, but such mortgage rates weren't available to anyone, much less a laborer with low income, no down payment and no other assets. Plus, that doesn't count another $750 a month in taxes and insurance.) The two families continued to make the payments, sometimes sacrificing basic necessities, other times borrowing more. "It was very difficult," Rosa says. "Sometimes we would eat less, and we took out personal loans from Bank of America."

Thanks to the new BK laws these people are effectively slaves for the rest of their lives. They can't even sell the house to break even-

Despite the intention that both couples would be buying the home together (they'd submitted income information for three of the four buyers), the loan was made exclusively in Alberto Ramirez's name. This meant that he was solely responsible for the debt. The couple also discovered that the home wasn't nearly as valuable as they thought: When a new real estate agent valued the house, he told them he'd list it between $560,000 and $580,000. They have sent a letter of demand to Rancho Grande, claiming the brokers breached their fiduciary duties by selling Alberto Ramirez a home he couldn't afford. Rancho Grande declined comment.

This is happening all over the place, to thousands and perhaps millions of people who don't really understand how mortgages work, but who get sweet talked into them by predatory lenders, who, you'll note, walk away from all this after selling packages of bad mortgages to taxpayer-supported Fannie Mae et al. Yes, you will be paying for this fiasco and thousands like it, while the people who got suckered into them are debt-slaves for the 'crime' of not fully understanding the mathemathics of home financing.

And it's racism too- I learned about this back when I had a real estate licence, and wow! Nothing's changed:

According to NCLR, "[f]orty percent of Latino families and over half of African Americans who receive home loans get higher-cost mortgages, predominately subprime loans." In a study released last month, an analysis of 2005 federal mortgage lending data of large subprime originators in six metropolitan areas, African American borrowers were 3.8 times and Latino borrowers were 3.6 times more likely to receive a higher-cost home purchase loan than white borrowers. One argument is that these groups naturally get subprime loans because they have bad credit or are buying in riskier neighborhoods. But according Fannie Mae, there is an enormous lending disparity across the nation: One study found that 50 percent of all borrowers qualified for a cheaper loan than the one they eventually got. They even discovered that female buyers tend to get higher-cost loans than male counterparts.

But...but...I thought the Latin and Black underclass were poor because they were lazy and shiftless? And don't think this is the only type of financial racism that we suffer- insurance is more in our 'hoods, the price of gas is higher in the hood, groceries...pretty much everything. And I don't mean "in cities" in general. I mean that a can of cat food costs more in the South Side off-name corporate food store than it does in Lincoln Park at Dominic's. We call it the "Black Tax" and I'm so fucking sick of it. BIO'sSteve O, explaining to a shocked Euro reader who noted that in his country, any company offering this kind of deal would be shut down and fined, offered this fine reply:

Over here have have whats called an ownership society. You ar expected to be smarter than the corporations and if you’re not you have no right to a respectable living. It’s out on the street for you if you could actually fall for something like this.

It’s amazing, its unethical, it’s no better than the mob yet it’s legal because a company did this to these poor people.

This is along the same lines as privatizing social security, what a great idea, let people manage their own stock portfolios. We’ll all be rich. Don’t worry about the fact that 51% of Americans do not own stock, they’ll figure it out. Don’t worry abou the fact that 70% of 401K recipients mismanage their accounts every year. They’ll rethink things real fast.

Deregulation is a good thing!!! The markets will correct themselves!!!! They always do!!!!! Only problem with that theory is that it corrects itself on the back of the working class. The mortgage industry is already looking for a bail out. I say fuck them, bail out the fuckers they took advantage of, I’d foot the bill for that and then watch the fuck out, because I’d then demand bills be passed that would make this activity criminal.

Sure, the people that took out this loan made a mistake but it should never have been offered to them to begin with.

This goes along the same lines as the private equity markets, you cannot get into those deals unless you are qualified. No Joe Shmo can walk off the street and say sign me up. The SEC makes sure of that because they do not regulate the private equity market and it is very dangerous for the common person to get involved unless they really know what they are doing. You usually have to be an institutionalized investor (i.e. Merrill Lynch, Goldman Sachs or a private equity firm).

But since the mortgage companies and credit companies have little or no regulation as Jersey points out, it’s all good, they can rip these people off, walk away with the money and then they become Joe Publics problem when they come looking for government assistance. My taxes go up and Mr. Johnny Credit is laughing all the way to the bank.

America: land of the free...first month with no money down, and no payment for six months.