Teaser-rate loans were an explicit lure that backfired on lenders

Evidence

To sell home loans initially on the cheap with subsequent escalating variable-rate loans served as a lure. Instead, the housing bubble burst, leaving lenders with accumulating repossessed homes and few, if any buyers. When the housing bubble burst home values plummeted and continued to fall with a glut of unsold foreclosed homes. New homeowners lost their homes, and established homeowners, many of whom borrowed against their home values, abandoned theirs when the debt on their homes exceeded their value. — Albert Bandura, Moral Disengagement, 1489

Categorization

• CANDY: Teaser-rate mortgages as a honeypot lure — a vivid, tweetable framing of predatory lending mechanics.
• XREF: connects to: Exploding mortgage-security demand forced lenders to invent worthless borrowers. — Mark Blyth, Austerity: The History of a Dangerous…, 94