Quote:
Originally Posted by Spin  Quote: |
Originally Posted by Texpat These fools signed contracts. | Those contracts should never have even been on the table, never. In the UK you could never get a 100% mortgage based on the borrower stating verbally what he owned. The ONLY way to do that was to have 25% of the house value as a deposit. This meant that in the event of the borrower being unable to pay the mortgate or values falling, the lender could recoup their money. It would be the borrower who was incentivised to pay that mortgage on time. You take away that incentive and you get the problem you have in America right now. |
As I've stated, if the mortgage lender violated lending laws, he should be prosecuted. I'm not sure the lion's share of these loans were of this variety. I think most were legit and the falut lies in the laws. If the rules were too wishy-washy, the banks/Fed/mortgage brokers need to add oversight, but it doesn't absolve the borrower from irresponsible behavior in spending beyond his means. Interest only mortgages were popular when I left Los Angeles. People "
buying" a house with no concern toward ever paying any principle -- the epitome of irresponsibility. Get rich based solely on skyrocketing property values.
IMO, ten years from now property values in California will be 50% above what they are today.
The problem is that many Americans (especially Californians) aren't content to live in a house without upgrading for more than 5 or 7 years.