[quote=SK in CV][quote=njtosd]
Let’s not be ridiculous here. Without the “bad borrowers” there wouldn’t have been a problem. They were not the only source of the problem, but they were indispensable, just as the banks, etc. were.[/quote]
The bad lenders knew they were making bad loans. If they don’t make those loans, there are no borrowers, only denied applications. And there is no bubble.[/quote]
IMHO, the distribution of fault for the housing bubble was ~70% lenders, and ~30% borrowers. It would be 50/50 if not for the fact that most Americans (most people?) are so painfully ignorant about finances, so they rely on “experts” (who are looking to fleece them) to tell them what to do.
There is no way in heck that you can say the borrowers were “victims” unless the lenders changed the terms of the contracts after the borrowers read and signed them. I cannot stand how people claim that they were “victims” just because the gamble didn’t go their way.
The price for banks in this debacle (in reality: taxpayers, savers, and consumers of financial services who have to now earn less/pay more) is the lost value of the mortgage assets; and the price for borrowers is the loss of an asset they never really owned in the first place (the house), a lower FICO score, and the inability to access credit (especially cheap credit) for an extended period of time. Suck it up.
The true victims of this mess are prospective homebuyers, who just want to buy a home for thier families, who’ve been forced to sit out this market and rent. And then there are the savers and “conservative” investors who are unable to get investment yields that take into account the risks that are inherent in today’s investment environment. Oh, and then there are the public employees and other investors whose pensions/retirement plans have been decimated by the booms and busts caused by these foolish speculators (both borrowers and lenders, alike).
If one wants to argue that a strategic default isn’t immoral or unethical, that’s their right; but let’s not pretend that there shouldn’t be any consequences.
