Student of the Tao goes
mythbusting, after reading the Seattle
Times:
Myth 1: Sub-prime mortgages allow bad credit risks to buy homes.
Locally and nationally, nearly all of Ameriquest’s loans went to people
who already owned homes, The Times found.
In 2004, the year Taylor obtained her final subprime mortgage, only two
Ameriquest mortgages helped people buy houses in King County — far
less than 1 percent of the total. The remaining 1,286 loans that year were
nearly all refinances for borrowers who already owned their homes.
Likewise, nationally, less than 1 percent of Ameriquest’s loans that year
helped people buy homes. The next year, less than 3 percent of Ameriquest
loans nationally were for home purchases. Ameriquest declined to discuss
The Times’ findings, as did other industry representatives.
Myth 2: Sub-prime mortgages help young people buy houses.
More than one in three borrowers in King County who got loans from the
same lender that foreclosed on Taylor were 50 or older, and one in seven
was 60 or older.
The study was of Ameriquest mortgages, and Ameriquest by all accounts was one
of the most egregious lenders. But one certainly hears much less these days
about how "on the whole the subprime boom appears to have created more
winners than losers". Surowiecki?
Have you changed your mind on that one yet?