Hacker Read top | best | new | newcomments | leaders | about | bookmarklet login

problem were the lenders not borrowers


sort by: page size:

Well, okay. Then the problem is the government, not the people actually doing the lending.

That's a problem caused by people making poor choices rather than a problem with loan financing.

The majority of lenders would not give loans to people who could not afford them.

I mean.. they did loan the money, with all the associated responsibilities and risks of loaning money. And they did do the work. All the agreements were entered voluntarily, so what's the fault here?

The problem is with other loans there's collateral the lender can sieze like a house or a car.

Why are you only talking about the lender's fault when it comes to bad loans.

Fault for that goes both ways, towards to people who took the loan and the people who gave the loan. The people who gave the loan knew a lot more about the specific details and risks, so I find it hard to blame the people who took the loan.

My point is that the lender also made a bad decision.

I thoroughly agree with your 1st & 3rd paragraphs, but the situation described in your 2nd paragraph sounds like one in which the lenders are irresponsible, whereas the owners of the borrower alone seem to usually be blamed.

Yes but the interview seems to imply that this diminishes or somehow makes the case for the problem overblown. It says yes this is a problem, but doesn't really go into any specifics on why it's a bigger problem for those borrowers or that this is where the defaults are coming from. I guess I could have worded my comment better to say that I felt it wasn't given enough attention or depth.

The issue is in commercial lending

According to the article, the loans were at 18% variable rate... that's probably most of the problem right there.

They took out loans against their equity.

I am not seeing how a lender is better off lending money to people who cannot pay it back.

It is not NOT their fault. It is mostly the industry's fault, I agree with you. But people borrowing beyond their means is not 0% their fault.

Many of the lenders were complicit in fudging numbers to make people qualify for loans they should not have qualified for. They are just as responsible, if not more so than the borrowers.

The problem is the loan brokers in the story are fly by night middleman operations - hard to pin down.

Alternatively lenders could just be more responsible by not lending to those who can't afford to pay it back.

For every unwise borrower there is an unwise lender. My sympathies are more with the borrower, since the lender, as the side that supposedly hired people with financial acumen, bears a majority of the responsibility for assessing risk.
next

Legal | privacy