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Originally posted by JoeinTX
To all the elite's or children on here who have never had to deal with money heres a scenario. The banks gave them a loan and said you owe (hypothetically) $750 a month. The people said ok we can do that. Signed. Then the bank said, oh sorry you owe us $1050 now. They however can't pay that, because they were told $750.
There is no way, none, that the details of the loan were not supplied and discussed during the buying process. I've bought property.....the process is long and detailed and thorough. In my current house, bought during the boom days of 2006, I made sure and certain that we bought on a fixed-rate loan even if it was initially more expensive on a monthly basis for the simple fact that I didn't want a surprise down the road. I'm no real estate tycoon or financial wiz....just some guy who knew what he could and could not reasonably expect to pay.
THESE PEOPLE DID NOT.
Those caught up in the subprime issue today did one of two things:
-signed up to buy FAR more house than they could legitimately afford and hoped like Hell they could pay down a good part of it before their rates changed and hopefully it would be many years down the road.
-or, again bought far more house than they could really afford, but did so on a speculative basis hoping to sell out in a few years with a nice gain based upon the real estate market as it appeared at the time....which didn't last.
These people, by and large, are learning a very dear lesson in personal responsibility. What? Their families are feeling the effect of this?
They've got no one else to blame but themselves and it is up to them to do right by them. Period!
Originally posted by DwnitsDwn
One thing that would help, and possibly save the US economy , would be to outlaw compound interest altogether, and for those who would have had their purchases payed off, they would be considered payed, for those who had payed more than they would have in total, on simple interest , reimbursed. That would turn the tables entirely
This would need to be retroactive back to around 1940
Usury - comes from the Medieval Latin usuria, "interest" or "excessive interest", from the Latin usura "interest") was defined originally as charging a fee for the use of money. This usually meant paying interest on loans, although charging a fee for changing money was also included in the original meaning. Today, the word has changed its meaning to come to refer to the charging of unreasonable or relatively high rates of interest.