As the Editor in Chief at Crediteria.com, I have seen first hand the suffering that is going on with the sub-prime credit card and housing market. Banks and loan brokers were issuing loans to those with marginal credit to make a fast buck.
Whats sad is these loan sharks were out there cashing in on the hopes and dreams of those with low annual incomes and marginal credit, offering sub-prime consumers mortgages and credit cards. After all, the American dream is really owning a home and living a normal life. So, when somebody earning 8 or 9 bucks an hour is given the chance to stake a claim and have home ownership they take an emotional nose dive into a financial situation they cant sustain.
Why did this happen?
When a consumer with marginal credit was approved for a home loan, the loan was at an introductory rate which kept the payment to a level that they could barely make the monthly payments. Once the introductory interest rate expired, usually this was a 6 to 12 month term, the ongoing rate on the mortgage loan was raised by as little as 0.5%. In most cases the rates went up by as much as 3%.
The interest rate increase resulted in, of course, a...
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