2007-03-26 08:11:45 · 6 answers · asked by Anonymous in Business & Finance ➔ Credit
If they KNOW it will sink them, then yes they are to blame
BUT
If the borrower KNOWS it will sink them, then the lender will also KNOW
(If the lender doesn't KNOW, then that would be a poor excuse of a lender) .
Why would a lender KNOWINGLY lend money to that person instead of denying them?
GREED maybe?
2007-03-26 08:37:35 · answer #1 · answered by echo 7 · 3⤊ 0⤋
Yes and no.
Some borrowers have no choice but to use the predators, such as payday loans to get them out of a bind or high interest credit cards to reestablish credit.
When I lost my job in early 2003, what helped me out was the fact that I could get a quick loan from Jackson Hewitt on my tax refund, which was $6,000. The interest rate was sky high, and I knew that. However, I needed money right then: my mortgage was due, as were other bills, and I had no income.
That $6K held me over until I found employment.
When people are stuck between a rock and a hard place, they do what they need to in order to make ends meet right then and there. Consequences are not going to keep a car running or keep a roof over ones head.
Mortgage loans are a different story. The banks and brokers blow a lot of smoke to convince people that they can afford a mortgage that they really can't. Lending Tree told a friend he could afford a $500,000 condo when he made $65,000. On paper, it looked like he could (though he would have gotten no equity, and 80% of his take home would have been applied to his mortgage only). Luckily, he did his research...a lot of people do not.
2007-03-26 19:36:28 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Of course they are - I would go a step further and say that they are responsible for their decisions regardless of whether they "knew" or not. Many of the bad sub-prime loans now going into default are due to people really pushing the envelope on 100% financing AND using adjustable rate loans to get the biggest house they could. When home values dropped in many areas it made it impossible for these homeowners to refi or sell without coming out of pocket. If they also could not afford the payments, then they really got into trouble. THEY TOOK A CALCULATED RISK when they bought the property. Nobody made them buy at that price at that time...
Personal responsibility has to be the basis for a capitalist system. If you can't depend on people to make decisions for themselves, then who will be responsible?
2007-03-26 15:49:49 · answer #3 · answered by sdmike 5 · 1⤊ 0⤋
Borrowers are responsible for any money they borrow. Don't know where the "blame" lies, but responsibility is always on the person (or persons) borrowing the money.
2007-03-26 15:17:55 · answer #4 · answered by dbmartin 2 · 1⤊ 0⤋
Of course they are. Nobody puts a gun to a customer head and says you have to do this. It's always the customers choice so they are always responsible for their actions.
2007-03-26 15:25:58 · answer #5 · answered by ? 7 · 1⤊ 0⤋
Yes and no. Yes for not following the language used in receiving their loan. They didn't KNOW they could be sunk. The economy took them by surprise.
2007-03-26 15:16:33 · answer #6 · answered by Venita Peyton 6 · 0⤊ 2⤋