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Originally Posted by Meiac09
I can understand saving the banks, but at the same moment, this is just the entire the whole "karma's a bitch" mechanism is kicking in. Its just too bad so many people were gullable enough to sign up for the SP loans.  |
SP loans are/were fine if you knew what you were doing. Basically using a quick turn around of 4-6 months on a SP to simply get you in the door and converting the loan shortly after. That was great for 100% financing deals where a regular loan would have required down-payment. However, as with many good things, they were taken advantage of by people with no understanding of the concept of a ARM or negative amortization(possibly the most dangerous loan ever!)
People in the process took advantage of people who didn't have a concept of what they were getting into. As Alan Greenspan said years ago, adjustable SP loans are a great method for new buyers to get into a home as long as they know the ramifications of keeping it.
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