Let me preface my answer by acknowledging that I have not done my homework on this and do not know all (or even many) of the details.
However, in general I feel that parties need to be held responsible for their own actions. This accountability should be no different now. Lender's should have known better than to give money to the borrowers with poor credit, and the borrowers should have known better than to over extend themselves by getting into mortgages they should have known would be difficult to handle.
I feel that having the Treasury enter the situation partially absolves both parties from facing the consequences of their actions. I feel that the consequences, unfortunately do need to be felt, so that we won't be making the same mistake 10 years from now.
That's my two cents.
Edit - Link to the poll on WSJ.com
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3 comments:
Your two cents is exactly right and worth more than Henry Paulson’s two cents. You are right on with your assessment, and the poll agrees with us.
Government intervention always creates false markets, and the end result is usually poor, if not disastrous. Let all people be responsible for their own actions and let the chips fall where they may.
Well, it ain't that simple in my opinion. There has been tons of predatory AND deceptive lending. The mortgage brokers sell (talk) a good sale & then at closing, the borrower is overwhelmed with so many papers that there is NOT time to read. Last year I handle an residential closing for a colleague (he was tied up) & after a while I gave up said just sign if you want this house, I can't figure out what all of this paper says & it still took an hour to get everything signed. The adjustment is in a foreign language & in fine print. I know: it happen to me. I was told that the convoluted language meant a max increase of 2%; in 2 years I got a notice of 4 or 6 %. I hit the ceiling & worked it out with the bank; I think I am pretty sophisticated. What about the regular worker. The mortgage industry & the bankers need to be hit. Sorry. I am not saying that one who bought "up" should stay in their home, but fraud & trickery by sophisticated finance people should not be rewarded. We've seen several of these cases, hounded to refinance, old & young & tricked & trusting young buyers. There are a lot of just high school grads out there & even the HUD statement takes a while to figure out & it doesn't have the mortgage terms on it.
Enough soap box for tonight. But deal wit the hardworking trying honest people that come to see me & you'll have a different perspective (although some do some pretty stupid things).
This would be better debated in person, but I think essentially, we’re all on the same page. I think there are lenders and borrowers that both can be faulted. Although coming at it from different perspectives, both are driven by their greed. As far as all of the forms goes, I would guess that much of that required paperwork is because of government requirements. If the forms are required to protect either the lender or the borrower or both, they apparently aren’t working. The first thing to do is remove government intervention. The second thing would be for borrowers to invoke Caveat emptor.
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