[quote=flu]Why are there so many people so that allow complete strangers to assume their credit in one shape or form? It’s not the first time I read about something like this.
It’s just ironic, that people take such proactive steps against identity theft, but then when it comes to “investments”, anything goes. It’s like folks buying the most advanced security system/doorlocks for their homes, and then letting a complete stranger borrow the keys thinking that he/she isn’t going to steal anything inside.
I don’t get it.[/quote]
flu, you don’t “understand” it, because, in a rational world, it makes no sense. However, and I think you know this, we don’t live in an economically rational world. Everyone kinda knew that it was OK to borrow without checking to make sure that you could and would repay your loans, come hell or high water. Culturally, repayment of debts is pretty much optional in the US of 2009, and people could see this building back in 2006 and 2007 and 2008. So these folks were making a rational choice for the culture they live in. They were getting a good deal if prices went up – and that was the more likely outcome – and a not very bad deal if prices went down. The smartest people were the ones who used their credit to the max to buy houses as early as possible with little money down, and then sold at least a few with the greatest appreciation before the collapse. But even those who didn’t sell in time were making a rational economic decision, given the biases we’ve allowed in our housing markets through small dowmpayments etc.
