What Happens When You Lend Money To Poor People?
on 09/06/2007 at 05:48 PM
I’m thinking of old R&B tune whose name and recording group escapes me at the moment but the refrain goes like this, MONEY,MONEY,MONEY...MONEY
(Smooooth smarmy voice) Heeey, do I have a deal for you! Yes, you, too (imply a financial loser) can buy the home of your dreams with no money down and you don’t have to prove your income. Just tell us what you do and how much you make, and we’ll lend you the money. And, not only htat, but you get to choose how much you pay every month with our ‘Boy are you a financial loser flexible payment loan.’ Yeees, even you can buy the home of your dreams.”
(Very fast soto voce) Whatwedon’ttellyouisthatwemakemoneybychargingveryveryhighinterestandfeesthatarerolledintotheloanitselfandthateverytimeyoudonotpaythefullamounteachmonththeintereststillaccursandyouhavetopayevenmorebutwedon’tcarebecauseweselltheseturkeystosomegullibleinvestorwhowillprobablylosethiershirtswhentheshithitsthefan.
(Slower)
What we don’t tell you is that we make money by charging very very high interest and fees that are rolled into the loan itself and that every time you do not pay the full amount each month the interest still accrues and you have to pay even more but we don’t care because we sell these turkeys to some gullible investors who will probably lose thier shirts when the shit hits the fan.Wow, that article stings. How nice to see that this guy looks down his elitist nose at 98% of the population as “the poor”.
Good thing the article is written in Bloomberg, the snottiest news service going, whose audience is this guy and his immediate cronies.Nothing under $50 million, please
Sure, I know it was written with quite a dose of sarcasm. But no, I don’t have the slightest bit of sympathy for the investors who took a hit on the subprime mess. They knew the risks going in, and accepted them in order to reap the rewards of ballooning interest. Too bad that the customers had the sense to say “Eff this” when the interest rates soared higher than what they’d pay on credit card debt. I’d call it usury, and we have a whole cultural subtext on that concept (as in, “eff this!!"); we all applaud when the little fish bite back at the sharks.
I think Mr. Snotty is just peeved that he’s been outsmarted by the unwashed and uneducated, which from his perspective would be everyone not wearing Saville Row suites and having an Ivy League education.
