The subprime disaster is now getting foundations to help out, along with a lot of financial institutions. California mortgage counseling agencies will get $4.6 million for advising distressed homeowners, reports the San Francisco Chronicle. California expects to see 500,000 homeowners struggle to keep their houses over the next two years. And I am sure the contributing financial banks and companies listed below will be sweating this out to the end.

The grants will be given out over the next two years. The coalition expects to add 46 new mortgage counselors to the 300 already working in the state. The $4.6-million was pledged by Merrill Lynch, HSBC, Wachovia Bank, Comerica Bank, Wells Fargo Bank, Countrywide Financial, Citibank, Bank of America, the San Francisco Foundation and the California Community Foundation.

Subprime lending is the practice of making loans to borrowers who do not qualify for the best market interest rates because of their deficient credit history. Subprime lending is highly controversial because it is alleged that the subprime lending companies engage in predatory lending practices such as deliberately lending to borrowers who could never meet the terms of their loans, thus leading to default, seizure of collateral, and foreclosure.

If someone cannot afford something, then why sell it to them? Answer, greed.

Labels: Greed, Sub-Prime Mortgages