09-22-2008, 03:48 PM
mikey,
You originally asked a question....
Could anyone here explain to me how there can be irresponsible borrowing without there first being irresponsible lending?
I simply gave ONE account of how that was possible - directly answering your question. I did NOT say anything else.
YOU have implied from there. I certainly understand and agree that there other scenerios where the banker, or real estate agent, other credit pusher's ARE responsible - BUT THAT WAS NOT WHAT YOU ASKED. READ YOUR QUESTION!
....By Dave's account. the banks and lenders are the victim of swindlers and thieves. I doubt that was the real case; even he'd be hard-pressed to make that scenario as being the norm.
Dave has this knee-jerk problem. Someone should get him to a neurologist.....
I would also point out the following for you and others....
http://en.wikipedia.org/wiki/Subprime_mortgage_crisis
"Misrepresentation of loan application data and mortgage fraud are other contributing factors.[38] US Department of the Treasury suspicious activity report of mortgage fraud increased by 1,411 percent between 1997 and 2005. [36]
American Economist Hyman Minsky described three types of speculative borrowing that can contribute to the accumulation of debt that eventually leads to a collapse of asset values:[39][40]the "hedge borrower" who borrows with the intent of making debt payments from cash flows from other invesments; the "speculative borrower" who borrows based on the belief that they can service interest on the loan but who must continually roll over the principal into new invesments; and the "Ponzi borrower" (named for Charles Ponzi), who relies on the appreciation of the value of their assets (e.g. real estate) to refinance or pay-off their debt but cannot repay the original loan. All of these practices in some form or another contributed to the accumulation of debt that preceded the subprime crisis.
Unfortunately the Mortgage Forgiveness Debt Relief Act of 2007 removed incentives for borrowers to remain in their homes."
There is also this...
Effect on insurance companies
There is concern that some homeowners are turning to arson as a way to escape from mortgages they can't or refuse to pay. The FBI reports that arson grew 4% in suburbs and 2.2% in cities from 2005 to 2006. As of January 2008, the 2007 numbers were not yet available.[115] [116]
You originally asked a question....
Could anyone here explain to me how there can be irresponsible borrowing without there first being irresponsible lending?
I simply gave ONE account of how that was possible - directly answering your question. I did NOT say anything else.
YOU have implied from there. I certainly understand and agree that there other scenerios where the banker, or real estate agent, other credit pusher's ARE responsible - BUT THAT WAS NOT WHAT YOU ASKED. READ YOUR QUESTION!
....By Dave's account. the banks and lenders are the victim of swindlers and thieves. I doubt that was the real case; even he'd be hard-pressed to make that scenario as being the norm.
Dave has this knee-jerk problem. Someone should get him to a neurologist.....
I would also point out the following for you and others....
http://en.wikipedia.org/wiki/Subprime_mortgage_crisis
"Misrepresentation of loan application data and mortgage fraud are other contributing factors.[38] US Department of the Treasury suspicious activity report of mortgage fraud increased by 1,411 percent between 1997 and 2005. [36]
American Economist Hyman Minsky described three types of speculative borrowing that can contribute to the accumulation of debt that eventually leads to a collapse of asset values:[39][40]the "hedge borrower" who borrows with the intent of making debt payments from cash flows from other invesments; the "speculative borrower" who borrows based on the belief that they can service interest on the loan but who must continually roll over the principal into new invesments; and the "Ponzi borrower" (named for Charles Ponzi), who relies on the appreciation of the value of their assets (e.g. real estate) to refinance or pay-off their debt but cannot repay the original loan. All of these practices in some form or another contributed to the accumulation of debt that preceded the subprime crisis.
Unfortunately the Mortgage Forgiveness Debt Relief Act of 2007 removed incentives for borrowers to remain in their homes."
There is also this...
Effect on insurance companies
There is concern that some homeowners are turning to arson as a way to escape from mortgages they can't or refuse to pay. The FBI reports that arson grew 4% in suburbs and 2.2% in cities from 2005 to 2006. As of January 2008, the 2007 numbers were not yet available.[115] [116]