Not sure what you are objecting to in the quoted part of my post?
If the borrower fully repays a mortgage, the bank takes no loss (it gets everything it could possibly get under the contract), so by definition any loss is 100% being taken by the borrower. I think that is entirely factual.
If the mortgage is hugely upside down, the borrower made a very bad business decision, i.e. "screwed up". Don't see why anyone would disagree with that.
If the mortgage is hugely upside down, the bank also made a very bad business decision, i.e. "screwed up". Do you disagree with that? If you do, then why do banks do appraisals and why do they care about loan-to-value, and would any bank loan officer actually say that lending 200% of a house's future value is not a big mistake?
I don't see any moral content at all in the quoted statement. It is simply a statement of fact.
Quote:
Originally Posted by Rick Lee
The rest of what you wrote is good food for thought. This above however dances along the lines of moral relativism. Nowhere in a mortgage does it state that one or both sides is exepected to take X% of loss if the SHTF. Consequences to both sides are pretty well known in advance. If things get so bad that those consequences become acceptable, then either party is free to take the steps that lead to those consequences. What's throwing a monkey wrench into the situation nowadays is the gov't. meddling and even the prospect of judges capriciously rewriting private party contracts. That kind of stuff has consequences for lots of folks who had nothing to do with the problem and it will make buying houses more difficult and expensive for all of us.
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