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The Experts Say: Don’t Consider A SubPrime Loan!

Leonardo Simpser; Raising Awareness In The Minority Community

SubPrime mortgage companies implement a type of targeted advertising, called “steering.” This is basically seeking out neighbourhoods, and communities where the majority of the population is either African-American or Hispanic. Their scams are designed for immigrants, with low credit, no credit, and financially unstable families, in low-income communities. Subprime lenders offer loans requiring no documentation, social security numbers, insurance or tax escrow, and promise their applicants that they can make what is far out of reach, within inches of their grasp, financially speaking.

Leonardo Simpser is the managing director of the HNMA, abbreviated for the Hispanic National Mortgage Association. Simpser is the director of the new association, that will hopefully make not just Hispanics, but all Americans, regardless of origin, aware of the dangers involved in becoming indebted to a subprime mortgage lender. His advice to first time homebuyers, indeed, any homebuyers considering applying for a subprime loan is blunt: “Don’t! If you can’t afford to buy a house, don’t buy a house,” says Simpser.

SubPrime Is A Self-Destructive Business

The problem with targeting borrowers that cannot qualify for loans, or cannot afford to purchase a home, is that in most cases, subprime mortgage lenders are getting exactly what they are asking for. Consider, for instance, an unnamed company, who grows from seven employees in 1997 to approximately two thousand employees, ten years later. The company recently closed its doors; as are many other independent subprime mortgage companies, now that the real estate market has slowed to a crawl. If people are not buying houses, then they do not need loans, of course. Other than that, there is also a significant amount of foreclosures, heightening every year in the United States. Why? Because people who would otherwise be unable to qualify for a loan, are qualifying through the subprime lending market. Notorious for their sharply cut interest rates, and their whole percentage increases, subprime lenders cater to those borrowers who do not qualify for prime loans; or at least appear to.

With false promises, they lure in unsuspecting, and uninformed immigrants, elderly, newlyweds, really, any class of homebuyer can fall victim to the targeting advertisements, especially those entering the market for the first