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Was there some form of coercion involved? How is taking a loan against your home to gamble on risky, speculative assets the fault of someone else? If someone b

Was there some form of coercion involved? How is taking a loan against your home to gamble on risky, speculative assets the fault of someone else? If someone borrows against their home to try to double their money in stock trading or the casinos, were they exploited by Wall Street or Las Vegas?

JumpCrisscross 4y ago
> If someone borrows against their home to try to double their money in stock trading or the casinos, were they exploited by Wall Street or Las Vegas? Actually, yes. There are laws regulating loans for the purchase of securities. Most jurisdiction ban lending for gambling.
- oarabbus_ 4y ago
  1. Citation needed - which jurisdictions? This is certainly not true in the USA where you can use home equity for investment purposes multiple ways via HELOC, equity loan, or cash-out refi. Additionally, brokerages themselves offer margin, and margin investing/trading is a loan. 2. This doesn't address the point of where the coercion was involved to make this "exploitation". [0] https://www.lendingtree.com/home/home-equity/home-equity-investment/#:~:text=Yes%2C%20you%20can%20use%20your,a%20variety%20of%20financial%20uses https://www.lendingtree.com/home/home-equity/home-equity-inv.... [1]https://www.thebalance.com/can-i-invest-in-stocks-with-a-home-equity-loan-5324194 https://www.thebalance.com/can-i-invest-in-stocks-with-a-hom...
  - dahdum 4y ago
    Non-purpose loans like SBLOC aren't allowed to be used to purchase or carry securities. I believe HELOC usually don't carry that restriction, so it would be legal. Probably a terrible idea, but legal.
- dahdum 4y ago
  > Actually, yes. There are laws regulating loans for the purchase of securities. Most jurisdiction ban lending for gambling. How is Wall Street exploiting them in this case? It sounds like they are committing some sort of fraud (perhaps even criminal?) against the lender by breaking the terms the loan by investing in speculative assets.
  - JumpCrisscross 4y ago
    Broadly speaking, if a bank lends you money and knows or should have known you were going to use it to gamble or buy securities, the regulators will ding them. The borrower may separately be pursued for fraud. But this is a known failure mode when it comes to human emotions and magic numbers. Some sociopaths just found new lipstick for slot machines.
    - oarabbus_ 4y ago
      You keep claiming this, without providing evidence. Home equity loans and lines of credit can be and are used for investment purposes. It’s considered one of the worst ways to use home equity, but it’s absolutely legal for all parties involved
- tylergetsay 4y ago
  A lot of casinos offer lines of credit so this isn't true.

JumpCrisscross 4y ago

> If someone borrows against their home to try to double their money in stock trading or the casinos, were they exploited by Wall Street or Las Vegas? Actually, yes. There are laws regulating loans for the purchase of securities. Most jurisdiction ban lending for gambling.

oarabbus_ 4y ago
1. Citation needed - which jurisdictions? This is certainly not true in the USA where you can use home equity for investment purposes multiple ways via HELOC, equity loan, or cash-out refi. Additionally, brokerages themselves offer margin, and margin investing/trading is a loan. 2. This doesn't address the point of where the coercion was involved to make this "exploitation". [0] https://www.lendingtree.com/home/home-equity/home-equity-investment/#:~:text=Yes%2C%20you%20can%20use%20your,a%20variety%20of%20financial%20uses https://www.lendingtree.com/home/home-equity/home-equity-inv.... [1]https://www.thebalance.com/can-i-invest-in-stocks-with-a-home-equity-loan-5324194 https://www.thebalance.com/can-i-invest-in-stocks-with-a-hom...
- dahdum 4y ago
  Non-purpose loans like SBLOC aren't allowed to be used to purchase or carry securities. I believe HELOC usually don't carry that restriction, so it would be legal. Probably a terrible idea, but legal.
dahdum 4y ago
> Actually, yes. There are laws regulating loans for the purchase of securities. Most jurisdiction ban lending for gambling. How is Wall Street exploiting them in this case? It sounds like they are committing some sort of fraud (perhaps even criminal?) against the lender by breaking the terms the loan by investing in speculative assets.
- JumpCrisscross 4y ago
  Broadly speaking, if a bank lends you money and knows or should have known you were going to use it to gamble or buy securities, the regulators will ding them. The borrower may separately be pursued for fraud. But this is a known failure mode when it comes to human emotions and magic numbers. Some sociopaths just found new lipstick for slot machines.
  - oarabbus_ 4y ago
    You keep claiming this, without providing evidence. Home equity loans and lines of credit can be and are used for investment purposes. It’s considered one of the worst ways to use home equity, but it’s absolutely legal for all parties involved
tylergetsay 4y ago
A lot of casinos offer lines of credit so this isn't true.