Wolves Eat Sheep : Movie at 9

From the Denver Post, we have the triumvirate of David Olinger, Jeffrey A. Roberts and Greg Griffin writing about: Builders often key players in high-risk game.

Carmen Pedrego said the builder assured her she could own a brand-new home for no more than her monthly rent.

But when she came to the loan closing, a surprise awaited her. No one was in the room except a stranger from the title company. And after Pedrego signed a first mortgage loan, the agent produced a second mortgage. They totaled 64 percent of the single mother's take-home pay.

Because she had already signed one contract, "I felt trapped, like I couldn't get out of it any more," Pedrego said. She signed the second and made two mortgage payments, she said, then filed for bankruptcy.

64% of take-home pay? Single mother? Felt trapped, and signed a second piece of paper?

Residents who bought houses from Strodtman said they were lured by offers of low payments, then learned at loan closings that their monthly costs would be hundreds of dollars higher than they expected.

"They tell me in one year you can refinance," said Librado Herrera, who does not read English and depended on Strodtman's sales assistant to explain the contract.

When he called a lender eight months later, he said he was told his loan had a prepayment penalty and his house wasn't worth $245,000.

Herrera is unemployed. His wife sews bags for a living. They have fallen behind on their $1,500-a-month mortgage payments and fear they must abandon their new home.

In one year, "I waste all my savings, and I have no more ways to save," he said. "I'm paying too much. I don't understand why the bank loaned the money. The value is not real."

Unemployed? Can't read English? Wife sews bags for a living? Bought a house for $245K?

On the one hand, I know that, thanks to my "liberal" sensibilities, I'm supposed to feel sorry for these people. However, I don't seem to be able to muster up any pity.

They were speculating, and they got caught with their pants down, and like any other speculative episode when the game is winding down, the truth is revealed, and much fraud is exposed because there will always be people who will take advantage of the unwashed masses who wanted to make "easy money".

After this, there will be much hand-wringing, weeping and wailing; heart-rending stories will be published to sell newspapers; politicians will pretend to tear their garments, and promise the masses that this will "never happen again"; people will be subpoenaed before Congress; there will be much finger-waving, and finger-pointing; laws will be passed that mortgage documents must be bilingual (English and Spanish); mortgage brokers will have to take "ethics" courses, etc. etc. etc.

YAWN!

None of this will ever stop the wolves from eating the sheep, of course!