Quote:
Originally Posted by Suburbanite
The difference is, your average person understands an ipod. This stuff is written in a specific jargon to make it hard to comprehend. You're right, upon close inspection and research one perhaps could realize the inevitable, or, these are high risk candidates anyways, people with poor credit, for them this could've been their only chance to buy a house or get a loan. But this isn't the problem. The problem is two fold. First, geniuses like Emi here has no clue about the whats or whys of our economy, and instead of finding out, speculate and offer tradition, predictable, misinformation that then spreads to other morons. The second problem, is that it is evident to me, that the banks knew EXACTLY what they were doing, and that being the case, one can no blame a collection of individual people for the problems. Like I talk about in the race forum, the public and private are incommensurable, just because every action is the responsibility of an individual doesn't mean group behavior doesn't have a direct statistical correlation to concrete events taking place. For exmaple, poverty increases one's probability of being violent, but violent people are still responsible for their own actions. Yes, one on one, these people individually should've paid more attention, but the big crime is the one committed by people counting on the lack of diligence of others.
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Oh I'm not letting the lenders off the hook, they took a great risk that could affect the borrowers and the economy. Whenever I hear of the impact on the economy though the talk is centered around not being able to take equity out of your home to spend??!!! Since when has it become mandatory to borrow money from your home to keep the economy going normally? So its not just the foreclosures that is the problem (or worry) its spending. Well if the economy grew at a more than normal rate due to people spending equity maybe it is time for a correction. We need a reality check in that normal corporate growth should be low single digit. I am sure you have noticed that most major media outlets do not care for the unsophisticated buyer, they are worried about the red ink in the business section.
I just refinanced my home and there was that mandatory page with the interest rate. Frankly it spells it out clearly what I was getting involved in.
I must say, it is unfair to lump all buyers in one category:
1. Buyer with conforming loan that pays on time and does not take equity. Good people like this who default I feel sorry for cause it is usually due to sickness or a job loss.
2. Buyer with conforming that takes equity and then defaults: Do they not know that a 50" plasma will have to be paid for? Is it difficult to understand that the Mercedes they are driving in will cost them 30 years of payments? I have little sympathy for this person who wastes.
3. Buyer with 100% loan who defaults. Maybe a little sympathy but when you see your payments going up refinance for heavens sake.
4. Buyer with 100% loan who takes equity and then defaults. F this person, they deserve some hard times for living it up while the rest of us work hard and live normally.
Think about the bright side, now the savings rate will go up in the US. What is it currently like -1%. Thats pathetic!