Thursday, October 09, 2008
SNL spoofs mortgage abusers
Saturday Night Live spoofs President Bush, Nancy Pelosi, Barney Frank - no spoof needed - the abusers of mortgages. - Two totally unqualified buyers - jobs, etc. Nancy feels their pain and give one of them a hug. - Flippers. They intended to sell in six months at triple the prices, but had to settle for a gain of 10%. - Predatory lenders and George Soros. Posters at the SNL site say this version cut out where the couple thank Barney Frank and congress for blocking congressional oversight, which is true. That's the light-hearted way to explain the subprime mess. Seriously. Here is the article that linked to it: Conservatism Today But there were many people who took out loans that they never intended to repay (when the favorable environment changed). The brilliant SNL parody very accurately displays the Silicon Valley couple that bought condos to "flip" (buying houses and quickly reselling) in a rapidly rising housing market. Unknowingly to the Democrat machine of Fannie and Freddie, these flipper investors were the true catalysts of the meltdown. Without the "flipper investors" it's very likely the Dem's Fannie/Freddie fraud would still be churning unabated. You see, flippers were considered subprime borrowers as well. Those loans were/are grouped in with the low income borrowers. Here's why they are subprime and a demonstration of what happened: Those flipper loans were not conventional loans. The flipper would only need to be asset worthy to qualify for an exotic 0 down ARM (adjustable rate mortgage) loan with no documentation. If they could show a bank account or asset that could potentially cover a default, they could qualify. As long as the market stayed hot and home prices escalated, they were more than OK. The flippers were sought after by the mortgage companies because of the quick turnaround.