They should sue the banks for loaning more money than the house is worth. The bank is the expert on theses things they should have known better.
I have to agree with you! I think the only thing bankers were experts at is talking starry eyed people into bigger loans. There is a percentage of people who will sit there and 'know' this loan officer or whatever makes more if I take out more... but a whole bunch of others sat there, were told they could or 'would' be able to afford it, and believed it.
The whole home buying thing always seemed to be a game to me. Almost everyone we worked with seemed to be less than straight up. It was like buying a used car from a fly by night used car dealer, except instead of one guys BS, we dealt with 4-6 peoples BS. Realtors, home inspectors, bank officers all seemed to be working the system.
Their realtor while showing the house trys to play up how much it's worth. (of course!) But even the realtor I had 'hired' to help us find a house seemed to be pushing us towards more expensive properties, or properties from a builder she knew... and no doubt was going to score something under the table from! And the more house we bite off, the larger her commission ends up.
The inspectors I've dealt with come up with property values that were basically
to the dollar of what we were going to offer? Gee, how did that happen? Maybe he checked out the place and then talked with our realtor who contacted him in the first place?
Finally, our second home purchase wasn't so bad bank wise, but the loan officer we worked with on our first home purchase years ago left my wife and I feeling strung along. "Lets try to pay this off, and lets see if you can get that paid off!" Then they wanted more money down,
"Oh, you don't have any more to put down because you paid off the car? Hmmmm, gee, that really wouldn't have mattered... it would have been better to put more down." We really left feeling like the bankers were clowns. Several times we were told one thing, so we did it, then only a day or two later were told
"well that really won't affect your application." We were left feeling like the guy was totally clueless in his own profession. It felt like a racket where they were trying to see how much a young couple could score off mom and dad, because we'd unfortunately let is slide that if needed we could probably pay off some of our smaller bills with a little help if needed. They never seemed to be able to come out and say "You need to put down X% to get this rate, and this amount down will get you this rate... If you could pay off this credit card, it would look much better. Don't worry about the $1400 you still owe on this car." Nothing seemed set in stone, and what we needed to do to get the loan seemed to change with each phone call.