Reply to What I don't get: When people complain that they are drowning because their house is underwater

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]it is the bank's fault. They loaned the money and didn't turn down the people that couldn't afford and also rated mortgages as non risky when they were a risk. So what happened was prices went down because everyone defaulted who should never have gotten the loan to being with, increasing the inventory and driving down prices. FUCK THE BANKS, too big to fail my ass I want them all to fail.[/quote]

Banks were definitely greedy as hell, and knew they struck gold with creative financing.  But come one, you're telling me that people are just ignorant of their finances?  They were being greedy as well.  Both parties were at fault.[/quote]

I always find this attitude to be a bit puzzling:  you've got a multi-hundred billion dollar industry that is entirely oriented around mitigating risk while lending money on the one side, then on the other, you've got some schlub who probably has a hard time doing his taxes.  In that context, sure you can argue "both parties were at fault".  But one party is about 99% at fault, and the other 1%.  Which one should we completely insulate from the consequences of their *professional* malpractice?  Of course, it should be the banks.

Just irrational--and morally convoluted.[/quote]  Assuming professional malpractice is quite a leap, though - if the bank lied or misrepresented something, I agree with you.  For the sake of argument, I'll even throw in those that are too stupid to understand how a loan works (although I'm a little uncomfortable with the basic concept of relieving someone of a contractual responsibility based on intelligence, or lack of same).  But if someone with a college degree is too lazy (likely) to educate himself as to the way the loan works, or (equally likely, around here) understood EXACTLY how it would work, but just banked on property values going up and refinancing (just as likely, at least around here), then your 99%/1% allocation of fault is quite a bit off.  [/quote]

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