[quote=patientrenter][quote=SK in CV]….
You think it’s all about the borrowers. It isn’t. It’s about the lenders.[/quote]
I like your reasoning: Repaying loans is not the borrowers’ responsibility, but doubtless you think lenders should keep lending.
So then you won’t mind sending me a cashier’s check for your net worth, as a loan that won’t be repaid. I am waiting.[/quote]
You’re misunderstanding what I’m saying. The problems in real estate began with the lenders, not with the borrowers. The borrowers were the last piece of the puzzle, not the first. They weren’t blameless, but nobody was. From the loan originators and every broker, lender, underwriter, packager and investor. For the most part, the lenders still hold the cards. I’m sure most borrowers fully intend to repay loans when they’re made and only stop paying when they simply can’t afford the payments. But I would make no judgement with regards to an underwater borrower who chooses to exercise their contractual option and stops paying. The loan contract has quite specific language on the recourse the lender has in that circumstance.
And yes, I think the lenders should keep lending. But only to qualified borrowers and carefully underwritten loans. If I sent you a check for my net worth, I’d be as dumb as many of the lenders that made bad loans over the last 5 years, except there would be little chance of me be being bailed out by the government when you failed to repay.
