This is important.
The primary cause of the subprime collapse—which heralded in the Great Recession was bad loans not bad borrowers. At the peak of the subprime boom lenders structured loans in a way that virtually guaranteed that those loans would fail because it was profitable. Borrowers—particularly minority borrowers—were steered toward these designed-to-fail loans even when they would have qualified for a prime loan. It doesn’t matter how good your credit is or how high your income is. I can write you a loan with terms so bad that I know you won’t be able to pay it back. I’m afraid this post may require tossing around some numbers—but please bear with me. Even if correcting the banks efforts to shift blame isn’t sufficient, this stuff is worth knowing if you plan on someday getting a home loan.