As causes for the mortgage meltdown continue to surface, MAC5 Mortgage, Inc. looks forward to offering fair Colorado mortgages and Denver home loans for those who qualify for property ownership. A recent CNN investigation panel discussed who was to blame for the crisis. From lenders to backers, to Wall Street to buyers and greed, we can agree that all of the above were players. Apparently, the temptations were just too enormous.
Some of our Denver CO real estate has been affected, but generally our markets continue to show promise. This a good time to invest and we can help with a Denver mortgage product to suit your new Colorado home.
So, what can we learn from the fiasco? Understanding that today’s global market adds complexity to the equation—an equation that was indeed much simpler decades ago—let’s go over a few elements that added into the Colorado mortgage problems.
One is that the United States was coming off of the 9-11 and high-tech blow ups. The environment was fertile for companies looking to take on riskier debt that could have a bigger pay off. The FED kept the interest rates low in an effort to offer homeownership to more buyers, especially minorities and borderline qualifiers. As Wall Street encouraged lending, mortgage companies packaged more and more creative loans and sold them off as mortgage-backed securities to investors.
Some mortgage companies began offering “equal-opportunity” loans as they called them. Case in point: AmeriQuest, which was subsequently indicted in the State of Iowa and sold to Citi Group. AmeriQuest ran a $1.3 billion business rife with shady practices. Cold-call scripts lured potential customers with lies. A former employee described for a CNN reporter that he saw bogus appraisals, altered W-2 forms and paystubs, and other obvious ethical problems. Vulnerable buyers did not scrutinize the volumes of complicated documents that they were asked to sign.
But along with predatory lending, there were plenty of greedy homeowners who knew that they were getting in over their heads. As those buyers go to foreclosure, no one wins. Surrounding homes lose value. The stock market and 401(K) investments dip. People from around the globe who have invested in the stock also lose. The entire equation was an accident waiting to happen.
Our position is to fully inform our clients and to encourage self-responsibility in today’s marketplace. We will run the numbers and look out for our customers’ best interests, steering them away from wrong fiscal decisions. For information about sound financing for your real estate purchase, contact Brad Wyatt at (720) 407-6338 or e-mail clientcare@MAC5M.com.
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