Isn't is the Governments fault for "allowing" lenders to lend to desperate homeseekers with little or zilch

Question

I think the Feds allowed this to happen, promising "the American Dream" to those who could ill afford it. I wonder what a saleperson at a Mercedes Dealer would say if you walked in with $50 down on a $100,000 Car.

Answer 1

If the government were the ones issuing the loans I would agree but the fact is that predatory lending practices have caused the high rate of default on mortgage loans.

Answer 2

I don't think the Federal Government made any promises about home ownership to people. Yes they lowered interest rates but that was to combat inflation not allow people to buy homes.

The fault lies in two places: 1) the lenders who wrote non-conventional mortgages in order to sucker people into larger loans with variable or unpredictable interest rates.

2) it is also the fault of people who took out mortgages bigger than they can afford. Finance is a personal responsibility, not the governments, or the banks. If I overdraw my checking account, I cannot blame the government because of cheap milk prices.

Answer 3

Isn't it the home-seekers fault for getting themselves into a hole. Why is the government responsible for peoples stupidity.

The lenders are doing hones business. The buyers are adults, it's not the lenders job to manage peoples finances.

A lender can give someone who makes $100K per year a loan for the amount of $100K. And the borrower can still default on payments, how is that the lenders or government fault.

-J

Answer 4

i blame the people they are the suckers and a mercedes car salesperson would do a full credit check but then would not allow you to purchase the car without a higher downpayment