This is a sponsored post, but all the content, thoughts, and writing is my own! - Mo’ Houses
Did any of you hear about this whole Wells Fargo fiasco? I’ve just been hearing about it and it is absolutely crazy! The Globe and Mail explains that Wells Fargo is “the largest U.S. mortgage lender”, and this big bank committed major fraud by wrongfully approving and certifying thousands of mortgages for Federal Housing Administration insurance (Forbes.com). In case you don’t know what that is (I sure as hell didn’t before I googled it), FHA insurance is “a policy that protects lenders against losses that result from defaults on home mortgages” (FHA.com). Essentially what all this means is that mortgage lenders at Wells Fargo were giving out mortgages to people who couldn’t afford them in the first place, and when those people defaulted on their payments, those lenders could file an insurance claim to the U.S. Department of Housing and Urban Development and be completely protected, whereas the borrowers were pretty much f***ed. In short, Wells Fargo was scamming the government for years, causing thousands of people to go into bankruptcy and playing a big part in the recent recession. Yikes!
Now my opinion, and it is just my opinion, I am by far no expert on mortgages or real estate, is that I think the borrowers should take some responsibility for some of this too. Sure, the lenders were at fault for not doing their jobs properly and approving anybody with a last name a mortgage, but if you only have a couple thousand dollars in the bank and you want to get a mortgage so you can buy a $400,000 house, you should probably at least sense that something’s not quite right when a lender is eager to give you a loan with only 5% down. Remember, if something is too good to be true, it probably is.
Then again, there is something to be said for finding the right mortgage loan lender. Getting a loan is a big deal, and if you think there’s anything fishy or scammy about the lender, the bank, or the whole situation, I say run for the hills and find someone else! That’s why it’s important to do your research before doing something as risky and impactful as buying property. I know we were all told by our parents that buying property is the best investment you can make, but that’s only if you can afford it. Even I sometimes worry that if I don’t buy something now, in 10 years property will be even more unaffordable and out of my reach. But I don’t want to ever be one of those people who buys a place, gets laid off, and can no longer make my monthly payments. As much as I want to own my own place, hopefully with concrete walls and no psychopath neighbour, I know waiting instead of rushing into anything is the smart thing to do.
What are your thoughts on the whole Wells Fargo situation? Have you ever had any run ins with scammy loan lenders?
-Mo’ Houses out!