Letters to the Editor

Borrowers responsible for loan lies

Re Isaac Bailey column "Blame lenders, not buyers," Jan. 28:

I read, with interest, "Blame lenders, not buyers." I'm a real estate agent in Myrtle Beach who witnessed the days of easy money, stated income, no documentation loans referred to in the column. This loan meltdown was driven by greedy buyers hoping to make a quick buck by "flipping" property in conjunction with the availability of easy to obtain primary loans exceeding 100 percent of the loan to value and 125 percent home equity lines of credit from the lenders. These Fannie Mae-backed loans were sold off to other lenders or investors in the form of bond funds. This easy money and/or potential to make money attracted almost everyone.

With this in mind, I agree there is plenty of blame to go around. Blame can be placed on mortgage brokers, real estate brokers, hedge fund managers, appraisers, the federal government, home builders and so on. Unlike Bailey, I believe the big share of blame goes to the home buyers who knowingly lied on their loan application. After all it was the loan applicant who willfully and deceitfully entered the incorrect information on the application.

The article stated the loan paperwork is so complex it might as well be written in Greek. I have to disagree. To get a home loan the borrower must fill out a Uniform Residential Loan Application. This form is pretty basic in that it contains easily understood verbiage. For example: Section V asks for the borrower's Monthly Income and Housing Expense Information. When a borrower who makes $30,000 a year falsely states he makes $150,000, it is a blatant lie and there are consequences for the borrower falsely stating his income. Section IX contains easily understood terminology which I'll paraphrase: "The information in this application must be true and correct ... any misrepresentation may result in criminal penalties which may include fine or imprisonment or both."

In a society where we sue fast food restaurants for our obesity I find it disturbing for the media to dissuade personal accountability and to promote shifting of blame to others. My momma always told me (when it came to accountability), "You made your bed. Now you gotta lie in it."

The writer lives in Myrtle Beach.