Quote:
Originally Posted by tw
Once upon a time, bankers determined if you could afford the loan. It was called risk analysis.
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To corrupt that system for higher profits, responsibility was removed. Home owners told they afford homes because risk analysis was subverted to maximize profits.
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I've mentioned this on the Cellar before, but when we got pre-approval for a loan so we could go house shopping for our current home, the bank tried to convince us that we would be fine borrowing about 1.5 times more than what we thought we could afford. They thought we should be buying more house. We had to be the ones telling the bank we didn't want to borrow that much. But even then, they pushed us. Less than a year after the deal closed, they sold our mortgage to another company. I doubt they ever intended to keep it.
It would have been so easy to just listen to the bank and take the huge mortgage and buy the mansion. But we'd be in trouble now.