Quote:
Originally Posted by DIY&Save
There are many programs that the government and therefore we as taxpayers support that are critically vital to the well-being of a prosperous country. What I don’t understand is why the RM program that may benefit the borrower causes so much collateral damage. The lender made a bundle, the salesman made a substantial commission, yet taxpayers, neighbors and potentially heirs bear the negative impacts. I don’t recall ever co-signing on a RM loan so why should it negatively impact me? When the lender forecloses they contact the MMI Fund and are made whole. This is at our expense. Let the lenders bear ALL of the associated costs when the value of the foreclosed home is less than the accumulated fees and interest. I believe the lender may act far quicker in resolving property issues when a delay is costing them money.
What am I missing (please be gentle)?
|
The banking industry spends millions on lobbyists who have been very successful at getting the Government to allow them to offer many financial products to customers where the banks incur little or no risk at the expense of taxpayers. Reverse mortgages are one of those products. The SBA loan and the VA loan programs are two others. Years ago, my wife wanted to borrow money to build her veterinary clinic. We could afford to borrow it and make the payments, but the bank forced us to apply for an SBA loan guarantee only because they could make money on the loan with zero risk. They didn't even care about our credit rating, and even provided us with two rejection letters from other banks to justify the guarantee. Veterans could and should make a down payment on a house, but they can get a no money down loan, which I think is an irresponsible financial decision, and often doesn't work out well for them. In these cases, the banks make money with almost no risk.