i definitely don't mean to assume or imply that BoA isn't going to eff these people over with some kind of heinous terms. probably in the rate, some PMI/escrow black magic, or some kind of ballooning ARM. the internal logic to lending is that someone with capital makes the borrower prove they deserve better terms because they are less likely to default. a safe borrower, though safe, does not generate the profit that a "risky" lender does... so of course the lender is going to push the shittiest loan first.
i knew all this in basic theory, but after going through the "i'm a good little boy" dance to get into a mortgage, it all became very real, especially the conflicting incentives of the loan originator. they act like i'm the right kind of client, but really i'm the low margin asset on their balance sheet. they act like they don't want the cash poor minority with weird credit, but that person is gonna print money for them.
That's the trick: they spend a decade or so making people do The Goodest Boy Dance to get low-risk investments on the books. Then once the contradictions of capital start rearing their ugly head and the market begins to sour, they open up the floodgates to all the high risk folks. Then they bundle all your investments together and resell them as Certified Very Safe Trust Me Bro. The poor suckers who buy those end up holding the bag. Tale as old as time.
I mean, it says eligibility is based on income. that's not a NINJA loan. ninja = No Income No Job.
See I thought that meant they were means testing the program
i definitely don't mean to assume or imply that BoA isn't going to eff these people over with some kind of heinous terms. probably in the rate, some PMI/escrow black magic, or some kind of ballooning ARM. the internal logic to lending is that someone with capital makes the borrower prove they deserve better terms because they are less likely to default. a safe borrower, though safe, does not generate the profit that a "risky" lender does... so of course the lender is going to push the shittiest loan first.
i knew all this in basic theory, but after going through the "i'm a good little boy" dance to get into a mortgage, it all became very real, especially the conflicting incentives of the loan originator. they act like i'm the right kind of client, but really i'm the low margin asset on their balance sheet. they act like they don't want the cash poor minority with weird credit, but that person is gonna print money for them.
That's the trick: they spend a decade or so making people do The Goodest Boy Dance to get low-risk investments on the books. Then once the contradictions of capital start rearing their ugly head and the market begins to sour, they open up the floodgates to all the high risk folks. Then they bundle all your investments together and resell them as Certified Very Safe Trust Me Bro. The poor suckers who buy those end up holding the bag. Tale as old as time.