yes, when i said 'savings' i meant actual cash savings...i did not mean savings to the exclusion of RE, stocks, and bonds, however
the 20% downpayment bar was lowered and lowered until eventually those with NO CASH savings could buy homes, this is the type of loose lending practices (which btw, you know the saying it 'takes two to tango? ) call the lending practices predatory, but eventually it is the BORROWER who DECIDES to take out the loan
and now we have people like bill gross advocating that 'mr. president, start writing checks' that is just insane.
for homeowners who borrowed without regard to future ability to pay when the ARM's reset (of course we know ever appreciating RE values would solve that problem as RE always goes UP and these borrowers could re-finance with a burst of sudden 'equity' Right? Wrong.)
to bail out lenders and borrowers who made these most egregiously stupid types of BETS would be sending the absolute worst kind of message
these people aren't going to be out on the streets....they're going to be living in rental homes (where they probably should have stayed, until they were able to come up with 20% downpayments via their SAVINGS)
just because a borrower claims victim status to a 'predatory lender' doesn't mean that the rest of the american taxpayers owe them a roof over their head, because of their personal folly
i mean really, i read several months ago that nearly 1/3 of american borrowers don't even know what kind of loan they have! i'm sure many truly didn't understand what they were signing, but, they sure as he#& knew how MUCH they were borrowing....so you would think anyone taking on that much debt would at least bother reading the terms of the loan document, and if they were unable to understand it, find someone who did
there is absolutely no excuse for that except for willful ignorance, and i for one don't believe taxpayers should foot the bill perversely "incentivizing" such, most certainly not reward them nor the lenders
two words for you
'moral hazard'
i don't mean to rant(certainly not directed at you) but this constant drumbeat for the idea that borrowers and lenders should be spared any financial loss via the taxpayer is quite vile, imo |
