CRT Caused The 2008 Recession
I was a loan officer and then a document specialist before the collapse of the mortgage industry in 2008. I worked for a mortgage broker and direct lender called New West Funding. To become a loan officer I had to sit through 8 hours of ethics videos most of which were saying, "Even if you can, and it would make you more money, don't charge a higher interest rate." I take ethics seriously, so I never wrote a loan for any adjustable rate mortgages or ARMs shorter than 7 years. Our company offered three and five year ARMs, but when I was asked about ARMs by customers I told everybody the same story. I said, "Half of all people in California stay in their homes for 7 years or less, if that's you, we can consider a seven or ten year adjustable rate mortgage, versus a 15 or 30-year fixed rate mortgage." Then I would run the numbers on the shorter adjustable rate mortgages and some hypotheticals for the interest rate rising, and ask if they could affo...