,
6 tweets,
1 min read
Read on Twitter
two years ago i was in a branch of a major cdn bank. I described a young couple, fictional, but based on a real situation, with 150k income, and expected to earn 200k soon. I said How Much? loans officer said "million dollars no problem" 1/n
he added "depending on the down payment" so I played along, "we could help with that" so he said "million no problem". I wasn't shocked as I'd heard from many young couples that the banks were offering those loans 2/n
a while later, when several bank officers were in the room, I asked the group, "what happens when interest rates goes up?" and they said, in unison, "that can't happen" I objected cuz even then rates had started to rise 3/n
but they insisted that rates couldn't be allowed to go up. Why? I asked. "our customers couldn't handle it, they'd be in deep trouble". I had no words. They were handing out million dollar loans to young couples with parents' help 4/5
but they knew borrowers couldn't handle any increase in rates. what about recession? divorce? job loss? change of job? pregnancy? If i hadn't been there i wouldn't have believed it. and now we are at that point when many, many ppl won't be able to cope. 5/5
1 more thing re borrowing 1M as a young couple for a house. i asked several of them, how do you plan to pay this back? but after a few puzzled looks, the light bulb went on. They had no intention of repaying the loan, they were going to sell for a huge profit!
