- Top Features:
- War Room
- Glenn Greenwald
- Broadsheet
- Joan Walsh
- Camille Paglia
- Since You Asked
- Follow Salon:
Read other letters about this article
the problem is not just with subprime mortgages, there was a real change in qualified borrowers lending practices also. The old rule of thumb was you qualified for double your gross income, but suddenly people were allowed to qualify for 4 or 5 times their income. A friend of mine moved to North Carolina and was shocked to see people she worked with all buying $300,000 houses. She was wondering how they did it, well when she went to the bank they qualified her for $250,000-300,000. My sister and brotherinlaw qualified for over $500,000(all of these examples are middle class individuals with secure jobs, so hardly subprime) The rationale given was with low interest rates, you could break the old twice rule of thumb (though it is interesting that those same low interest rates in the fifties and sixties did not justify such large multiples ), we have just seen the beginning of our problems, add to that, the outstanding debt on credit cards, the ride has just begun
