You seem to be contradicting the point of the doctor and making my point. It was actually government intervention by artificially depressing interest rates that has led to this min-disaster!
Also, people, naturally, sought to take advantage of this government intervention made millions. Even the relatively uneducated in real estate made hundreds of thousands of dollars per year. This was not a bad result. Will people late to the party get hurt? Yes. Will people who have no understanding of basic finance get hurt and who took out loans that were too big? Yes (not really that much, though, cause they will get free rent after the NODs. The people who actually will get hurt the most will be affluent investors who made the loans posssible.
Would this have been avoided by making loan applicants read scores of pages of disclosures about not taking out too big a loan? No. They didn’t even read the fine print to begin with, so why would they read additional disclosures?
Maybe, after artificially depressing interest rates, the government should have limited loan sizes? Why not do this in the stock market, too, when artificially low interest rates cause the market to heat up?
So, thank you for agreeing with me. Also, I’ll pass on smelling the coffee. I prefer tea.
