"These subprime lenders target you to take you through disaster," said Anderson, 59, who filed for bankruptcy after a legal tussle with a subprime lender, a "nightmare" that she said ended four years ago when her home was nearly foreclosed.
[WS:] Here is a story that I know first hand, because I was one of the key characters. You can make whatever you want out of it.
Last year I put a condo that I owned on the market. I moved out of that condo a couple of years ago, and rented it to a single Black woman with a kid and shitty credit. She liked the place and looked like she wanted to get her life together, had a job nearby, and that was good enough for me. Despite a few bounced checks I got the rent most of the time. Last year I decided to sell the condo for a variety of reasons.
My intention was to sell it to the tenant. My real estate agent, an acquaintance of my soon be ex wife, worked a special deal in which I would drop the price somewhat, she would take half of the usual commission (not a big sacrifice for her, because otherwise she would have to share the commission with other brokers), and find a lender for the buyer. The tenant was quite excited about that. She and the broker spoke with the lender, who agreed to lend the money on the condition that she comes up with a substantial down payment.
Since the tenant did not have that kind of money, the broker asked me if I would be willing to give her the second mortgage to cover the down payment. I agreed. But then things took an unexpected turn.
The tenant informed my broker that she decided to work with some Black guy to whom she was referred to get the credit. She asked if I could wait a bit. I agreed. After about three months, which on the current housing market is three light years, the tenant informed my broker that the person with whom she was working demanded excessive fee, which she could not afford to pay. She also asked if she could still make a deal with the original lender. They met again, but when the lender checked the tenant's credit again, he discovered that a few of her checks bounced and her credit ratings, less than stellar to begin with, took a nose dive since the last time they talked. Consequently, he backed out of the deal.
Three weeks later, I sold the condo to a Russian immigrant and her Indian boyfriend for more money and less hassle.
Wojtek