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The author mentions "sub-prime" borrowers several times but I don't see any indication that borrower quality had anything at all to do with Uber's problem. I a
by pbreit 9y ago
The author mentions "sub-prime" borrowers several times but I don't see any indication that borrower quality had anything at all to do with Uber's problem.
I always thought sub-prime borrowers were unfairly blamed for the mortgage crisis. There were a lot of average & prime borrowers walking away from ridiculous "nothing down, 1%" mortgages.
- jandrese 9y agoA house would have to be staggeringly overpriced for a 1% fixed loan with no down and no points to not make sense. Especially if they qualified for a prime rate. Hell, if I had that loan available I would totally take it and run with it.
- bronson 9y agoWell, 1% loans never existed. They were just teaser rates. After a time period (say, 3 years), it would reset to awful ARM rates that the borrower couldn't possibly afford. The loan agent: "No problem, just refi before then."
- jandrese 9y agoSo people were running away from loans that were about to get way more expensive? Who could have ever seen this coming? IIRC you can't refi if your house value has dropped below your equity in it, meaning those people didn't really have a choice.
- lsc 9y agoI'm not weighing in on the moral judgement, but I do believe that you misunderstood the comment you are responding to. I think previous commenter was saying that lots of people like you with reasonable credit did take and run with those sorts of loans on crazy favorable terms, then when the value of the house dropped to half what was owed, many of those people defaulted on the loan; "Mailed the keys to the bank"