"I’ve spoken to so many people who did not know what they were agreeing to as they signed on the dotted line.
In some cases, buyers were lured by low "teaser" interest rates without understanding that those rates would double or even triple over time.
Other lenders pushed "piggyback loans" and other gimmicks that hid the true financial costs. As another real estate agent told Sixty Minutes, "They were getting loans in excess of 100 percent of the value of the property." In other words, "getting paid to buy a house."
Buyers share responsibility, too. Some do not read their prospectus. Many do not understand it. Often, the benefits are bannered while the penalties are buried in the fine print.
It reminds me of one humorist’s line: "Why is it you can never read a doctor’s prescription, but you can always read the bill?"
A good line, but a poor excuse.
There are more ways than ever before to buy a home. And so we must educate homeowners like never before. They must know their rights and responsibilities on the way in, not just on the way out.
In January, President Bush signed an executive order creating the Advisory Council on Financial Literacy. It is ably led by two distinguished Californians, Charles Schwab and my good friend John Hope Bryant.
The role of the Council goes beyond promoting ownership. We want families to know what goes into a home: planning, savings, good credit, and, above all, communication with your lenders. People must, as the President says, "be able to manage their assets."
HUD Secretary Alphonso Jackson, speaking before the Commonwealth Club in San Francisco, Ca. on March 4th, 2008