Borrowers have two options when it comes to mortgages:
(1) make the payments or
(2) give the house back to the bank
Option (2) is perfectly legal and every idiot mortgage lender knows that borrowers can stop making payments and then the mortgage lender has recourse by selling the house (collateral) in a foreclosure auction. Mortgage lenders are totally at fault here because they didn’t require borrowers to put enough down. If they borrowers had been forced to make reasonable down payments, then the bank could make a full recovery in the foreclosure auction.
Credit cards are unsecured debt and, again, lenders know that there is no collateral backing up the loans. If a person declares bankruptcy, then credit card lenders get in line with all the other unsecured creditors, which means they will usually get nothing.
Borrowers are the unsophisticated party in the transaction and lenders are the sophisticated party. Do you know of any borrowers who write their own contracts?
If lenders aren’t getting paid back, it is entirely their own fault as lenders write the contracts and set the underwriting standards.[/quote]
Don’t you know, Iforget. Jose the strawberry picker broke into Wells Fargo and changed underwriting guidelines then he made them take huge bonuses. he also threatened the ratings agencies to keep AAA ratings for years as well as forced Bernake to claim there was no bubble in 2005 in front of congress then went over to Greenspans house and made him get on TV to tell everybody to take out ARMs.
The poor banks were taken advantage of, which is still going on to this day. you remember the million FB march on Washington were these evil FBs were demanding bailouts. And Obama caved to the irresponsible FBs. It really has nothing to do with the banks. Actually most of the big five were begging Obama not to take the money because the all wanted the free market to work and put them out of business. They were begging for it and Obama forced them to take huge bonuses and stay in business and keep making billions.
Actually many fine banking interests that represent such firms as Goldman Sachs, Citi and the ny Fed have been vehemently fighting the government from within and can’t seem to get Obama to change is mind about keeping their friends in business.
