Originally posted by: DrPizza
A lot of people in this thread ignored something cultural: the family in the U.S. is mom, dad, and kids. In Mexico, households are often extended families. It's not unreasonable to think that an extended family would pool their money to make a mortgage affordable.
Rios knew when she bought the house she'd have to skimp to make the mortgage payments. But she felt it was worth it. "It was a sacrifice but at least we'd have a home," said Rios, ...
The real estate agent said she could refinance within two years and lower her payments.
If true, the last part is probably the biggest reason. Who wouldn't skimp if they knew that it was only a temporary sacrifice. She went from making a temporary sacrifice with the trade-off of home ownership & an extended family to a realization that the "temporary" sacrifice was going to be permanent and be an even greater sacrifice.
In short, she was conned by people she trusted - alleged professionals. To suggest that someone earning only 25k per year in that market should be capable of doing a better financial analysis rather than trusting those professionals is ridiculous.
She managed to save $20k for a down payment on her meager earnings; she earned a very good credit rating. She obviously knew how much money she could afford each month, and how much money she could swing for a mortgage payment - and she did. Her one bad financial decision was listening to the advice of her real estate agent: the payments would go down. Instead, that proved to be absolutely incorrect.
The real estate agent got his commission.
The mortgage broker got his commission.
And, they both probably have no trouble sleeping at night knowing that this probably wasn't the only family screwed over by predatory lending practices.