“Financial literacy is at the heart at the sub-prime mortgage lending crisis we are just seeing the beginnings of throughout our nation; a crisis that will not just impact the poor, but soon, squarely in the households and communities of America’s middle class too. Households where middle class Americans simply sought to purchase “too much home,” effectively asking the wrong question; “what’s the payment,” versus “what’s the interest rate.” Bryant continued, “this coming crisis, tied directly to financial illiteracy in our nation, has been caused principally by unsophisticated applicants taking up increasingly sophisticated, adjustable rate sub-prime financial products by mainstream and alternative lenders alike, and mostly unregulated or lightly regulated mortgage lenders and brokers providing clearly predatory loan products, to applicants wholly unsuited for the financial offering provided. Here, in both cases, financial literacy would have given applicants, now borrowers, the tools and capabilities to push back on and negotiate equally with overly aggressive market makers seeking only to meet next quarter’s expectations from Wall Street, and financial manipulator’s alike. Frankly, this is precisely how my family lost our home when I was a child, and one of the reasons why I am so personally passionate about financial literacy today.”
John Hope Bryant