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There are laws against predatory lending which are intended to protect consumers from lenders trying to take advantage of them. Obviously, they aren't good enou

by nkohari 19y ago

There are laws against predatory lending which are intended to protect consumers from lenders trying to take advantage of them. Obviously, they aren't good enough. In my opinion, the real problem is that lenders should never be able to profit if the consumer defaults on the loan. Without the mortgage brokers and hedge funds on the back-end buying the debt from the banks, the banks would be much less likely to issue bad loans, because they would end up getting royally shafted if the purchaser defaulted and they still "owned" the debt.

timr 19y ago
On my personal wish-list of reforms is an incredibly high (say, 90%) tax on short-term capital gains for real estate investments. The whole justification for the mortgage interest write-off (which is otherwise just a gigantic government handout to property owners), is that it promotes home ownership, the family unit, etc. The problem is, there's no equivalent dis-incentive for short-term speculation on property, and what was intended to be an incentive for family home ownership actually helped to fuel the ponzi scheme that is effectively driving families out of their homes today. If short-term gains on home sales were taxed at very high rates, it would basically be impossible for "investors" to flip homes for short-term profits. A huge incentive for speculative price increases in the housing market would be eliminated. (Plus, no more stupid TV shows about house flipping. It's win-win!)
anamax 19y ago
> Obviously, they aren't good enough. In my opinion, the real problem is that lenders should never be able to profit if the consumer defaults on the loan. How do you think that lenders make money on a default? At best, lenders break-even on forclosure. When a forclosure sells for more than the money owed, the remainder goes to the borrower, not the lender.

by nkohari 19y ago

timr 19y ago

On my personal wish-list of reforms is an incredibly high (say, 90%) tax on short-term capital gains for real estate investments. The whole justification for the mortgage interest write-off (which is otherwise just a gigantic government handout to property owners), is that it promotes home ownership, the family unit, etc. The problem is, there's no equivalent dis-incentive for short-term speculation on property, and what was intended to be an incentive for family home ownership actually helped to fuel the ponzi scheme that is effectively driving families out of their homes today. If short-term gains on home sales were taxed at very high rates, it would basically be impossible for "investors" to flip homes for short-term profits. A huge incentive for speculative price increases in the housing market would be eliminated. (Plus, no more stupid TV shows about house flipping. It's win-win!)

anamax 19y ago

> Obviously, they aren't good enough. In my opinion, the real problem is that lenders should never be able to profit if the consumer defaults on the loan. How do you think that lenders make money on a default? At best, lenders break-even on forclosure. When a forclosure sells for more than the money owed, the remainder goes to the borrower, not the lender.