Wednesday, October 01, 2008

A scary statistic

37% of loans originated in the first quarter of 2007 were interest-only loans. I.e., loans that would *never* be paid off.

Madness. Utter madness. An interest-only loan becomes a non-loan as soon as housing prices decline. That is crazy. Which is why our financial system is at the verge of collapse right now -- because of craziness like that.

- Badtux the Finance Penguin

1 comment:

  1. I must have missed a memo somewhere along the way. When did loans-that-never-get-paid-off become legal? Isn't that usury by anyone's definition?

    ...And why would any sane person take such a loan? After all, it's just like renting, only with an eternal lease you can never get out of. Um... what's the point?

    Just askin...


Ground rules: Comments that consist solely of insults, fact-free talking points, are off-topic, or simply spam the same argument over and over will be deleted. The penguin is the only one allowed to be an ass here. All viewpoints, however, are welcomed, even if I disagree vehemently with you.

WARNING: You are entitled to create your own arguments, but you are NOT entitled to create your own facts. If you spew scientific denialism, or insist that the sky is purple, or otherwise insist that your made-up universe of pink unicorns and cotton candy trees is "real", well -- expect the banhammer.

Note: Only a member of this blog may post a comment.