Ethical considerations (none) for defaulting on non-recourse loan.

[CA renter]

PR,

If we just let the lenders fail (as we should, IMHO), then they will have learned a most valuable lesson: don’t lend money to people who can’t pay it back, AND know the value of the collateral backing the loan.

It really is that simple. We (the taxpayers) don’t need to do a thing.

Mortgages are secured loans. If the borrower doesn’t pay, then the lender has the right to foreclose. That’s what’s supposed to protect them in the event of a default.

While I agree with you that a borrower should be expected to pay back a loan, it was the lenders who willingly and knowingly volunteered to lend money to people who were unlikely to pay it back. The onus is on the lender to evaluate the borrower and collateral and weigh the risks. The borrowers would not take loans they couldn’t pay back if the lender didn’t make those loans available (even push those loans through incessant advertising pitches targeted directly at the least informed borrowers) in the first place.

[patientrenter]

CA Renter, I’d be very happy with the lenders failing. And you’re right, if that were allowed to occur, then lenders would get more careful, and we’d avoid the next bubble.

We could solve this problem with even one of these possible actions:

1. Let lenders fail

2. Require borrowers to repay

3. Require minimum 20% downpayments in all cases

There are probably more options, but these will do. Unfortunately, none of these actions will be taken.

I still think that borrowers should be responsible for their loans (and lenders too). I can’t imagine letting other people determining for me what I can or cannot borrow and repay. Each party should make their own determination of how far they can go, and the loan should be the lesser of what each comes up with. And if the loan isn’t repaid, it should be a black mark for both. In the case of the lender, the penalty is easy to determine – it’s the loss of the unrepaid loan amount. In the case of the borrower, there should be a large penalty too. I don’t see that large penalty being applied now. I guess I still think the system is lopsided, and borrowers need to be held more accountable.

[patientrenter]

CA Renter, I’d be very happy with the lenders failing. And you’re right, if that were allowed to occur, then lenders would get more careful, and we’d avoid the next bubble.

We could solve this problem with even one of these possible actions:

1. Let lenders fail

2. Require borrowers to repay

3. Require minimum 20% downpayments in all cases

There are probably more options, but these will do. Unfortunately, none of these actions will be taken.

I still think that borrowers should be responsible for their loans (and lenders too). I can’t imagine letting other people determining for me what I can or cannot borrow and repay. Each party should make their own determination of how far they can go, and the loan should be the lesser of what each comes up with. And if the loan isn’t repaid, it should be a black mark for both. In the case of the lender, the penalty is easy to determine – it’s the loss of the unrepaid loan amount. In the case of the borrower, there should be a large penalty too. I don’t see that large penalty being applied now. I guess I still think the system is lopsided, and borrowers need to be held more accountable.

[patientrenter]

CA Renter, I’d be very happy with the lenders failing. And you’re right, if that were allowed to occur, then lenders would get more careful, and we’d avoid the next bubble.

We could solve this problem with even one of these possible actions:

1. Let lenders fail

2. Require borrowers to repay

3. Require minimum 20% downpayments in all cases

There are probably more options, but these will do. Unfortunately, none of these actions will be taken.

I still think that borrowers should be responsible for their loans (and lenders too). I can’t imagine letting other people determining for me what I can or cannot borrow and repay. Each party should make their own determination of how far they can go, and the loan should be the lesser of what each comes up with. And if the loan isn’t repaid, it should be a black mark for both. In the case of the lender, the penalty is easy to determine – it’s the loss of the unrepaid loan amount. In the case of the borrower, there should be a large penalty too. I don’t see that large penalty being applied now. I guess I still think the system is lopsided, and borrowers need to be held more accountable.

[patientrenter]

CA Renter, I’d be very happy with the lenders failing. And you’re right, if that were allowed to occur, then lenders would get more careful, and we’d avoid the next bubble.

We could solve this problem with even one of these possible actions:

1. Let lenders fail

2. Require borrowers to repay

3. Require minimum 20% downpayments in all cases

There are probably more options, but these will do. Unfortunately, none of these actions will be taken.

I still think that borrowers should be responsible for their loans (and lenders too). I can’t imagine letting other people determining for me what I can or cannot borrow and repay. Each party should make their own determination of how far they can go, and the loan should be the lesser of what each comes up with. And if the loan isn’t repaid, it should be a black mark for both. In the case of the lender, the penalty is easy to determine – it’s the loss of the unrepaid loan amount. In the case of the borrower, there should be a large penalty too. I don’t see that large penalty being applied now. I guess I still think the system is lopsided, and borrowers need to be held more accountable.

[patientrenter]

CA Renter, I’d be very happy with the lenders failing. And you’re right, if that were allowed to occur, then lenders would get more careful, and we’d avoid the next bubble.

We could solve this problem with even one of these possible actions:

1. Let lenders fail

2. Require borrowers to repay

3. Require minimum 20% downpayments in all cases

There are probably more options, but these will do. Unfortunately, none of these actions will be taken.

I still think that borrowers should be responsible for their loans (and lenders too). I can’t imagine letting other people determining for me what I can or cannot borrow and repay. Each party should make their own determination of how far they can go, and the loan should be the lesser of what each comes up with. And if the loan isn’t repaid, it should be a black mark for both. In the case of the lender, the penalty is easy to determine – it’s the loss of the unrepaid loan amount. In the case of the borrower, there should be a large penalty too. I don’t see that large penalty being applied now. I guess I still think the system is lopsided, and borrowers need to be held more accountable.

[NotCranky]

The relationship between the borrower and the lender is similar to that between you and your insurance company. If you hit a car and your insurance company pays are you unethical? If a silly teenager does is he unethical? Maybe, but he made a deal to cover the risk that he was silly and unethical. Insurance company pays.

Whether non-recourse laws are a good idea or not isn’t really the topic of this thread and it seems like some can’t see that(for whatever reason). For some reason people think FB’S must take on some super ethics after blowing it, even though they had the help of some mighty unscrupulous people on the other end of the contract and in the purchase decision and transaction.

To think that the borrowers did not get hurt is not very clear sighted. Maybe from the perspective of a massive bankroll and keys to the world , like the average pigg has stashed away, they did not. Lots of people lost everything they had saved from hard and humble lives. Paid double rent for a POS for a few years while barely making it by on other fronts(while waiting for the promissed inflation, refinance or whatever was promished to make it work out for them). They fought with their spouses, did feel humiliated and get bad credit marks. The lenders are despicable and should pay big time. The upside down people that I know are taking responsibility from an emotional or psychological perspective.Some are fighting to stay and pay but that idea is absurd and impossible for others.

I’d rather drink a beer with someone who can see these kind of things about those losing their houses and put down the pitchforks, than with some self congratulating person who apparently never screwed up on something they established just a little too much hope in.

Treat your neighbor well. The Banks. The government, Real Estate Industry ect. Hurt us all.
Is that a rant? LOL.

[NotCranky]

The relationship between the borrower and the lender is similar to that between you and your insurance company. If you hit a car and your insurance company pays are you unethical? If a silly teenager does is he unethical? Maybe, but he made a deal to cover the risk that he was silly and unethical. Insurance company pays.

Whether non-recourse laws are a good idea or not isn’t really the topic of this thread and it seems like some can’t see that(for whatever reason). For some reason people think FB’S must take on some super ethics after blowing it, even though they had the help of some mighty unscrupulous people on the other end of the contract and in the purchase decision and transaction.

To think that the borrowers did not get hurt is not very clear sighted. Maybe from the perspective of a massive bankroll and keys to the world , like the average pigg has stashed away, they did not. Lots of people lost everything they had saved from hard and humble lives. Paid double rent for a POS for a few years while barely making it by on other fronts(while waiting for the promissed inflation, refinance or whatever was promished to make it work out for them). They fought with their spouses, did feel humiliated and get bad credit marks. The lenders are despicable and should pay big time. The upside down people that I know are taking responsibility from an emotional or psychological perspective.Some are fighting to stay and pay but that idea is absurd and impossible for others.

I’d rather drink a beer with someone who can see these kind of things about those losing their houses and put down the pitchforks, than with some self congratulating person who apparently never screwed up on something they established just a little too much hope in.

Treat your neighbor well. The Banks. The government, Real Estate Industry ect. Hurt us all.
Is that a rant? LOL.

[NotCranky]

The relationship between the borrower and the lender is similar to that between you and your insurance company. If you hit a car and your insurance company pays are you unethical? If a silly teenager does is he unethical? Maybe, but he made a deal to cover the risk that he was silly and unethical. Insurance company pays.

Whether non-recourse laws are a good idea or not isn’t really the topic of this thread and it seems like some can’t see that(for whatever reason). For some reason people think FB’S must take on some super ethics after blowing it, even though they had the help of some mighty unscrupulous people on the other end of the contract and in the purchase decision and transaction.

To think that the borrowers did not get hurt is not very clear sighted. Maybe from the perspective of a massive bankroll and keys to the world , like the average pigg has stashed away, they did not. Lots of people lost everything they had saved from hard and humble lives. Paid double rent for a POS for a few years while barely making it by on other fronts(while waiting for the promissed inflation, refinance or whatever was promished to make it work out for them). They fought with their spouses, did feel humiliated and get bad credit marks. The lenders are despicable and should pay big time. The upside down people that I know are taking responsibility from an emotional or psychological perspective.Some are fighting to stay and pay but that idea is absurd and impossible for others.

I’d rather drink a beer with someone who can see these kind of things about those losing their houses and put down the pitchforks, than with some self congratulating person who apparently never screwed up on something they established just a little too much hope in.

Treat your neighbor well. The Banks. The government, Real Estate Industry ect. Hurt us all.
Is that a rant? LOL.

[NotCranky]

The relationship between the borrower and the lender is similar to that between you and your insurance company. If you hit a car and your insurance company pays are you unethical? If a silly teenager does is he unethical? Maybe, but he made a deal to cover the risk that he was silly and unethical. Insurance company pays.

Whether non-recourse laws are a good idea or not isn’t really the topic of this thread and it seems like some can’t see that(for whatever reason). For some reason people think FB’S must take on some super ethics after blowing it, even though they had the help of some mighty unscrupulous people on the other end of the contract and in the purchase decision and transaction.

To think that the borrowers did not get hurt is not very clear sighted. Maybe from the perspective of a massive bankroll and keys to the world , like the average pigg has stashed away, they did not. Lots of people lost everything they had saved from hard and humble lives. Paid double rent for a POS for a few years while barely making it by on other fronts(while waiting for the promissed inflation, refinance or whatever was promished to make it work out for them). They fought with their spouses, did feel humiliated and get bad credit marks. The lenders are despicable and should pay big time. The upside down people that I know are taking responsibility from an emotional or psychological perspective.Some are fighting to stay and pay but that idea is absurd and impossible for others.

I’d rather drink a beer with someone who can see these kind of things about those losing their houses and put down the pitchforks, than with some self congratulating person who apparently never screwed up on something they established just a little too much hope in.

Treat your neighbor well. The Banks. The government, Real Estate Industry ect. Hurt us all.
Is that a rant? LOL.

[NotCranky]

The relationship between the borrower and the lender is similar to that between you and your insurance company. If you hit a car and your insurance company pays are you unethical? If a silly teenager does is he unethical? Maybe, but he made a deal to cover the risk that he was silly and unethical. Insurance company pays.

Whether non-recourse laws are a good idea or not isn’t really the topic of this thread and it seems like some can’t see that(for whatever reason). For some reason people think FB’S must take on some super ethics after blowing it, even though they had the help of some mighty unscrupulous people on the other end of the contract and in the purchase decision and transaction.

To think that the borrowers did not get hurt is not very clear sighted. Maybe from the perspective of a massive bankroll and keys to the world , like the average pigg has stashed away, they did not. Lots of people lost everything they had saved from hard and humble lives. Paid double rent for a POS for a few years while barely making it by on other fronts(while waiting for the promissed inflation, refinance or whatever was promished to make it work out for them). They fought with their spouses, did feel humiliated and get bad credit marks. The lenders are despicable and should pay big time. The upside down people that I know are taking responsibility from an emotional or psychological perspective.Some are fighting to stay and pay but that idea is absurd and impossible for others.

I’d rather drink a beer with someone who can see these kind of things about those losing their houses and put down the pitchforks, than with some self congratulating person who apparently never screwed up on something they established just a little too much hope in.

Treat your neighbor well. The Banks. The government, Real Estate Industry ect. Hurt us all.
Is that a rant? LOL.

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