Actually if they were asked to sign loan documents that had blank lines, that may be illegal and it certainly is unethical. But why would anyone in their right mind sign a blank contract?
"It's very sad. A lot of people were preyed on and didn't understand what kind of loan they were getting into," said Margie O'Campo de Castillo of Arizona Dream Realty. "There was some greed involved, but many buyers were made promises and were lied to."Why would anyone sign a contract they didn't understand? You do know what a contract is, don't you.
People, if you don't understand contracts - and even if you think you do - it worth it to have a lawyer with you.
Since lenders offered higher fees to brokers on the loans with the highest interest rates, some mortgage people put borrowers in subprime loans when they would have qualified for loans with lower interest rates.This is just plain stupidity. People were shopping for the lowest payment (up front - not long term) not the lowest interest rate. This comes the the sabotage of the American education system. Now no one knows simple math. (And figuring out what your loan payments will cost is dead simple - hell you can look it up in a book.)
And even if you can't figure that out, knowing to get the lowest interest rate is easy. It is more important than getting the lowest payment. Then of course it is more important than getting the absolutely biggest house of anyone in your family.
I do feel bad that all of these people are losing their homes. Probably some of them dealt with slimy loan officers and real-estate agents. Caveat Emptor - Let the Buyer Beware. If you think anyone you are doing business with is your friend, think again. In the real-estate/loan business they make more money if you over-extend yourself, get the worst financing, etc. Some of them may be your friend, but most are just good at being in sales.