I wrote earlier about a study by the NYFED, that provided insight as to what the average subprime loan looked like. The study laid out the horrific terms of these subprime loans but didn’t talk about the people or circumstances that caused the subprime loans to be enticing. Sunday’s Star and Tribune chronicles one such circumstance.
Bradley Collins Jr. is a painting contractor. He averages an income of $60,000/year and supports his family of 5 on that income. According to the article, about 3 years ago, Collins and his wife thought they would take advantage of the real estate boom occurring in the NW part of the Minneapolis metro. With the encouragement of two salesman from a “property management company,” they bought 4 houses for a total price of $1.2M. The story as we all know, continues with the real estate market busting, the resales of the homes not occurring, the owners failing as landlords and the homes falling into foreclosure.
(more…)