Academic

Inspired by yesterday's book club, the time has come for me to out myself as a subprime loan recipient.  What can I say?  It was 2002 and I was young.  Well, younger.

 Actually, my husband and I were the rare--it turns out vanishingly rare--couple for whom subprime loans are made.  We had just graduated from law school and had Big Law job offers.  Our negatives: we were extremely cash poor, which meant a downpayment of less than 5% in the expensive DC Metro market.  My law firm had delayed my start date until October (which seemed like quite a hardship before the current downturn's version of delayed starts), and we wanted to buy a house in May.  The bank deemed my income too speculative, so they based the loan only off of my husband's income, and charged a correspondingly high interest rate.  On the plus side, we had stellar credit and  high income potential.  And the market was on fire--multiple bids for every listing.  If we had waited to save up a big downpayment, we would have gotten a lot less house.  We got an extremely high interest rate loan, and refinanced into a 5 year ARM after my job started.

It was a great financial decision for us, and that personal experience, coupled by a market-friendly bent, has colored my view of subprime lending ever since.  Sure there were abuses, but the products themselves weren't inherently bad--indeed, they fill a gap in the market.  All the Devils Are Here makes clear that most subprime borrowers weren't like us, but I still resist the demonizing of the product itself.