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Yes, and even closer to Debt Bondage: http://en.wikipedia.org/wiki/Debt_bondage http://en.wikipedia.org/wiki/Debt_bondage Note it's a pretty thin line between

by madair 17y ago

Yes, and even closer to Debt Bondage: http://en.wikipedia.org/wiki/Debt_bondage http://en.wikipedia.org/wiki/Debt_bondage Note it's a pretty thin line between the two, and this is a feudalistic system of peonage. The only difference from peonage really comes down to whether you are forced to work for one company or can switch employment while still garnished. I think this speaks to the value of credit scores and social pressure for enforcing consumer debt contracts, as opposed to prison or garnishment. Sure there are always abusive edge cases to point to, but it's worked quite well overall. Obviously there's going to be a problem with a massive real estate gold rush bubble fueled by lax regulation, profiteering and fraud by both consumers and finance companies. But last I checked the consumers are getting whacked pretty hard for their sins. Not so sure about finance.

startuprules 17y ago
"But last I checked the consumers are getting whacked pretty hard for their sins" Please elaborate. Consumers are walking away from their mortgages (in many cases, 0 percent down and ARM) or they have been defaulting (staying in the house without paying mortgage for 2+ years in many cases) . Consumers are walking away from their obligation of credit card debts (10%+ discharge rate) at an all time high. Credit scores get reset after bankruptcy pretty quickly now, after 3 years. Heck, you can buy a house with a FHA mortgage up to 500k with 3% down only 2-3 years out of bankruptcy. What is real is consumers don't have 'jobs' anymore.
- madair 17y ago
  Well, I don't know if you're ever been through any financial trouble, but in my experience it is very traumatic and has long-lasting physical and psychological repercussions. Those people walking away from all that are essentially signing up for years of more pain, self-doubt. They will have poor reputation in commerce and finance. And what's more, clearly you're talking about people with financial resources, that's really not what we're talking about here, you make it sounds like some party, but the vast majority of people who are affected by this aren't going to be getting their credit score back to the level now needed for the FHA mortgage, nor will they have 3% to put down on a house. Look, dude, I realize you'd like to throw peeps in debtors prison, as you said in another comment, so it's likely I'm talking to either a mean person, and uninformed person, or a troll, but, like, ummm, totally whatever.
- tptacek 17y ago
  Companies that issue no-doc 0-down ARM loans should be forced under. It's hard for me to care that much about the unfairness of the "consumers" in that scenario. The real problem is the vast network of Wall Street arbitrage opportunities that radically incentivized stupid lending.

by madair 17y ago

startuprules 17y ago

"But last I checked the consumers are getting whacked pretty hard for their sins" Please elaborate. Consumers are walking away from their mortgages (in many cases, 0 percent down and ARM) or they have been defaulting (staying in the house without paying mortgage for 2+ years in many cases) . Consumers are walking away from their obligation of credit card debts (10%+ discharge rate) at an all time high. Credit scores get reset after bankruptcy pretty quickly now, after 3 years. Heck, you can buy a house with a FHA mortgage up to 500k with 3% down only 2-3 years out of bankruptcy. What is real is consumers don't have 'jobs' anymore.

madair 17y ago
Well, I don't know if you're ever been through any financial trouble, but in my experience it is very traumatic and has long-lasting physical and psychological repercussions. Those people walking away from all that are essentially signing up for years of more pain, self-doubt. They will have poor reputation in commerce and finance. And what's more, clearly you're talking about people with financial resources, that's really not what we're talking about here, you make it sounds like some party, but the vast majority of people who are affected by this aren't going to be getting their credit score back to the level now needed for the FHA mortgage, nor will they have 3% to put down on a house. Look, dude, I realize you'd like to throw peeps in debtors prison, as you said in another comment, so it's likely I'm talking to either a mean person, and uninformed person, or a troll, but, like, ummm, totally whatever.
tptacek 17y ago
Companies that issue no-doc 0-down ARM loans should be forced under. It's hard for me to care that much about the unfairness of the "consumers" in that scenario. The real problem is the vast network of Wall Street arbitrage opportunities that radically incentivized stupid lending.