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Originally Posted by
ercchry
With a bank… yes, we are not talking a bank loan here. I don’t think you understand what I see in my day to day.
One of the most comically sad examples of financial illiteracy I’ve seen locally involved the purchase of a new caravan from Lanny’s favourite dealership.
$35k caravan (this was years back now). Traded in a journey for it, so underwater that the new loan was for about $60k and they had hidden money everywhere (including about $3k for nitrogen filled tires).
These people? Total household income of about $60k (b-lender mortgage income calc, even less from an A lender) and they were hammered with unsecured debt and a mortgage on top of that, beacons in the high 400s/low 500s. Edit: now that I think about it I believe it was only the wife on this loan… PT cashier at a grocery store.
Most of these loans are granted with a simple stated income, there might be mitigation with a security deposit, but by no means are these lenders confirming affordability to any level close to mortgage lending
Edit: oh! Another great one… sub 600 beacon, guy was leveraged to the tits on multiple properties… diagnosed with terminal cancer so he went out and raked up about $12k/month in luxury car payments, leases, financed, etc… about 5 cars total. just to fully recover and then had to fix the whole thing… his claimed income was peanuts, but thankfully was self employed and could have paid himself about $100k (but that was not remotely verifiable)