4 ms·

I acknowledge that I'm in the minority but I find it really hard to understand the idea that "The secured loan you took out and can no longer afford to pay? Th

I acknowledge that I'm in the minority but I find it really hard to understand the idea that "The secured loan you took out and can no longer afford to pay? They're going to take the collateral" isn't the whole fucking point of a mortgage. This idea that the banks foreclosing is somehow a sign of greed boggles my mind. Now, sure there is a bunch of consumer protection around to help 'honest Joe' out when times are tough - but it isn't going to magically stop a crunch point coming where either you keep paying off the loan or you lose the house.

rrcaptain 9y ago
It's rather that banks foreclosed on houses that weren't in default for long enough to warrant forclosure. And that they skipped due process and didn't actually make sure they were properly forclosing. There's the famous John Oliver sketch regarding a bank that tried to forclose on a house that didn't even have a mortgage. And then when the people tried to collect their legal fees, the bank wouldn't pay, leading them to foreclose on the bank. In addition, many of the mortgages that were issued should never have been done so. They deliberately and knowingly issued mortgages that they knew were far more risky than they actually were.
- Ntrails 9y ago
  105% mortgages were given out on homes that hadn't finished being built with no money down. The lending was idiotic - but so was the borrowing. There's a distinct implication that banks are entirely responsible for managing credit risk from repayment risk. That's explicitly false _and the whole point of backing the loan with assets_. Take away the right to foreclose and the banks will simply stop lending to basically everyone except those who can trivially afford the repayments. I'd be surprised if the rate of genuinely illegal foreclosures was > 5%, maybe I'm wrong on that. In essence though I can't help but wonder when people will take responsibility for what they borrowed.

rrcaptain 9y ago

It's rather that banks foreclosed on houses that weren't in default for long enough to warrant forclosure. And that they skipped due process and didn't actually make sure they were properly forclosing. There's the famous John Oliver sketch regarding a bank that tried to forclose on a house that didn't even have a mortgage. And then when the people tried to collect their legal fees, the bank wouldn't pay, leading them to foreclose on the bank. In addition, many of the mortgages that were issued should never have been done so. They deliberately and knowingly issued mortgages that they knew were far more risky than they actually were.

Ntrails 9y ago
105% mortgages were given out on homes that hadn't finished being built with no money down. The lending was idiotic - but so was the borrowing. There's a distinct implication that banks are entirely responsible for managing credit risk from repayment risk. That's explicitly false _and the whole point of backing the loan with assets_. Take away the right to foreclose and the banks will simply stop lending to basically everyone except those who can trivially afford the repayments. I'd be surprised if the rate of genuinely illegal foreclosures was > 5%, maybe I'm wrong on that. In essence though I can't help but wonder when people will take responsibility for what they borrowed.