spierce Wrote: ------------------------------------------------------- > Sounds pretty selfish eh? No. But this is a good example of social pressure.
spierce Wrote: ------------------------------------------------------- > naturallight Wrote: > -------------------------------------------------- > ----- > > > > I disagree. The risk metric here is not > character. > > These people would pay back their loans if > their > > mortgages weren’t +$100k underwater. So it > can’t > > be character. It’s simply an economic decision > > they are facing. > > > > The risk metric here a possibility of economic > > recession. And as a bank, you can either price > > this risk in or adjust your lending behavior. > Some > > banks gave no-doc loans in Phoenix, others > didn’t. > > > > > > Thus, if you default on your underwater > mortgage, > > you are not harming society. You are simply > > harming a dumb bank. Rest assured, the smart > banks > > will (smartly) fill the void left by the dumb > > banks, and society will be fine. > > Is it the bank you’re harming, or the > securitization bond holder? Is it the bank, or > the investor in the bank? Is it the bank, or the > depositor? Is it the depositor or the FDIC? Is > it the FDIC or the taxpayers? Is it the > taxpayers, or the DIF fund funders, who are the > banks, who are the investors, who are the > 401k/pension/mutual funds, and bailout providers > (taxpayers). > > Are you shooting a bank in the dick, or just > society because you made an “investment” decision > rather than a rational long-term housing > decision? > > Furthermore, since the lenders can’t predict the > behavior of borrowers, then all borrowers are now > inherently riskier. So who are you harming? > > All borrowers, all taxpayers, all investors. All > for your *own* personal gain. > > Sounds pretty selfish eh? This is great. So maybe I should go buy a Toyota for all the pension funds that hold Toyota stock? Furthermore, your comment that “then all borrowers are now inherently riskier” is false. Again, there are good banks who actually did credit analysis, and there were bad banks who didn’t. How do we know this? 80% of negative equity is concentrated in 11% of loans. You’d be doing society a favor by NOT propping up the incompetent banks.