Oct 6
The sub-prime/bad loan mess
With the whole sub prime mortgage problem rearing it ugly head in the US and bubbling under in the UK. There is some thought it will be far worse in the UK when things really get cracking. Northern Rocks collapse is just the beginning of the fallout from banks lending to people who should not have anything to do with a new loan in the first place.
On a side note what has struck me as most amusing is the people who have bragged about the fact they have got a mortgage on a new house; even though you have heard them complain about their tight money situation. Now some will be blame the lenders; but the borrowers also have themselves to blame for being greedy and foolish.
Lending is going to get tighter in both the US and the UK; it already is to some extent. However there will still be companies with direct mail and other direct marketing efforts targeting who should not be offered loans in the first place. When these loans go awry neither the lender nor the borrower should be bailed out by government. Taxpayers should not be expected to bail out the greedy and the corrupt from messes of their own making.
Now this will take some political courage to resist the inevitable sob stories that will be found in the media. As with other aspects of law; ignorance is no excuse and does not mean an automatic call on the pocket-books of those who were responsible with their money. There are people with genuine need out there; bailing out people who go greedy on the property market is not a group that qualifies. Never mind the fact they have been driving up prices which is hurting potential buyers who can pay their way.
There should be no reward from the taxpayer for greed driven stupidity.
As you may or may not already be aware, members of the Watcher’s Council hold a vote every week on what they consider to be the most link-worthy pieces of writing around… per the Watcher’s instructions, I am submitting one of my own posts for consideration in the upcoming nominations process.
Here is the most recent winning council post, here is the most recent winning non-council post, here is the list of results for the latest vote, and here is the initial posting of all the nominees that were voted on.
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