How Subprime Mortgage Lenders Destroyed The Slavic Village

The fact that the only way for people with very poor credit history to recover is to find a lender which will trust them enough that they can indeed recover gave birth to sub-prime mortgage lenders. While these people cannot qualify for prime lending because of the bad credit history they are currently in, sub-prime mortgage lenders “risks” into still granting them loans in exchange for higher rates and the assurance of repossession when the client eventually ends up unable to pay; then came the economic recession which threatened every banking state a couple of years ago.

The recession was primarily blamed to subprime mortgage lending because of the increased in repossession of properties from people who borrow from them. It was found out that most of their borrowers end up unable to continue paying the after payments because of intolerable interest and thus choose to default their mortgages. The result is an economy losing liquid money with increasing properties frozen into houses which cannot be spent like liquid money at all.

This sad event happened because of the sudden increase of people who went for subprime mortgage lenders because of thinking that they are not qualified for prime loans. Agents who convinced these people to make subprime loans (which have very high interest rates) also did nothing to inform these people that they are legible for prime lending, thus more clients for them.

Agents of subprime mortgage lenders make house campaigns and personal invites which they sent to everyone in a poor neighborhood. The people are convinced to make subprime loans, pay down payments and eventually were kicked out the houses they’ve mortgage because the interests become intolerable.

The Truth About the Slavic Village

The Slavic Village is among the many communities build by subprime mortgage lenders. They sell properties in Slavic Village and when these properties get defaulted, they look for new borrowers wnad give them the defaulted house. Most of these houses need serious repairs after being left by their previous honors who eventually chose to have their houses repossessed.

Subprime mortgage lenders convince people that houses in Slavic Village are as cheap as $400 per after payment but when borrowers receive their bills, they are surprised by $650 worth of bills because of taxes and interests. Houses are yet to be repaired and expenses have to be shouldered by the borrower. In the end, interest rates boost to intolerable rates and the borrower will be willing to default the property and the same cycle goes over and over again.

People are moving out of the Slavic Village and the house value of those who were able to surpass the sub-prime interests end up living in devalued houses. When the economy of the Slavic Village fell, homeowners who chose to leave the place ended up selling the houses they owned through high interest mortgages at a low price.

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