John Williams wrote:
...
Please explain why nobody but borrowers should have responsibility for a
market failure, which seems to be what you are implying.
No, you seem to be assuming that borrowers were losers, and the only
losers, in the housing bubble.
But regardless, it is a simple concept. Honor, honesty, integrity,
whatever you want to call it. If a person agrees to something
voluntarily, then they should keep their word.
John--
Hi. I'm with Keith on this. A mortgage is not an
absolute promise to pay back the loan. Rather, the
deal is that if the borrower does not keep up payments,
the lender can take back the property.
I was reading something a few months ago that said
richer borrowers were more prepared to default on
a mortgage when the property was under water, and
that poorer borrowers tried harder to keep up the
payments. (Not that I think that richer people are
less moral. I bet it's because richer people have
more exposure to the business world, as well as
access to better legal and financial advice.)
---David
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