View Poll Results: Who deserves the blame for a loan default, the borrower or the lender?

Voters
51. You may not vote on this poll
  • The borrower, they shouldn't be taking out a loan that they can't pay back

    32 62.75%
  • The lender, they shouldn't be making loans that they suspect will default

    11 21.57%
  • The government for guaranteeing the loan

    8 15.69%
  • The government for failing to adequately regulate the lending process

    8 15.69%
  • All of the above

    16 31.37%
Multiple Choice Poll.
Page 3 of 6 FirstFirst 12345 ... LastLast
Results 21 to 30 of 58

Thread: Who to blame: the lender or the borrower?

  1. #21
    Skeptical Optimist
    Rhapsody1447's Avatar
    Join Date
    Aug 2006
    Last Seen
    09-20-17 @ 02:57 PM
    Gender
    Lean
    Very Conservative
    Posts
    1,510

    Re: Who to blame: the lender or the borrower?

    Quote Originally Posted by Simon W. Moon View Post
    Does it have to be the same for all cases?

    Or can it vary depending on the specific circumstances?
    I wanted to get people's opinion on the fundamental issue of debt and to which party the burden of the responsibility fell. However, the recent financial crises and the popularity of mortgage loans make them the most relevant.
    "There is an excellent correlation between giving society what it wants and making money, and almost no correlation between the desire to make money and how much money one makes." ~Dalio

  2. #22
    Banned
    Join Date
    Nov 2010
    Last Seen
    12-29-15 @ 10:42 PM
    Gender
    Lean
    Conservative
    Posts
    3,747

    Re: Who to blame: the lender or the borrower?

    I was an "all of the above", but I will always blame government the most. They created these most unusual circumstances, where everyone thought they could not lose. Had we not had the uber-inflation in the housing market, started by government, everyone would have behaved in far less risky behavior. As it was, the government created huge moral hazards, and huge money making opportunities, and I believe it is quite predictable what happens then

  3. #23
    Sage
    VanceMack's Avatar
    Join Date
    Feb 2010
    Last Seen
    Today @ 05:41 AM
    Gender
    Lean
    Independent
    Posts
    54,715

    Re: Who to blame: the lender or the borrower?

    Quote Originally Posted by Eighty Deuce View Post
    I was an "all of the above", but I will always blame government the most. They created these most unusual circumstances, where everyone thought they could not lose. Had we not had the uber-inflation in the housing market, started by government, everyone would have behaved in far less risky behavior. As it was, the government created huge moral hazards, and huge money making opportunities, and I believe it is quite predictable what happens then
    Im not sure what you mean by the uber inflation caused by the government. When the government was promoting home buying, they werent promoting the inflated home costs...they were promoting home ownership and industry. Had people bought within their means, the increase in purchase price and property value surely would have gone up, but it would have gone up appropriately. We didnt take a good thing and make it better...we took a good thing and went from cruising speed to full throttle til the engine burned up.

    All that would have to happen for this to correct itself is the government letting the market correct itself. Yes...its going to sting a lot of people. But if this had been allowed to happen in 2007, a lot of people would have declared bankruptcy, those inflated homes would be rental properties, and in another two years, those people would be out of bankruptcy, solvent, and consumers.

  4. #24
    Banned
    Join Date
    Jun 2011
    Location
    The greatest city on Earth
    Last Seen
    08-04-12 @ 04:27 PM
    Gender
    Lean
    Moderate
    Posts
    31,089

    Re: Who to blame: the lender or the borrower?

    lenders should make sure those they lend large sums of money to have the means to pay back the loan.

    if they don't do that, they put their investors in jeopardy.

  5. #25
    Banned
    Join Date
    Nov 2010
    Last Seen
    12-29-15 @ 10:42 PM
    Gender
    Lean
    Conservative
    Posts
    3,747

    Re: Who to blame: the lender or the borrower?

    Quote Originally Posted by VanceMack View Post
    Im not sure what you mean by the uber inflation caused by the government. When the government was promoting home buying, they werent promoting the inflated home costs...they were promoting home ownership and industry. Had people bought within their means, the increase in purchase price and property value surely would have gone up, but it would have gone up appropriately. We didnt take a good thing and make it better...we took a good thing and went from cruising speed to full throttle til the engine burned up.

    All that would have to happen for this to correct itself is the government letting the market correct itself. Yes...its going to sting a lot of people. But if this had been allowed to happen in 2007, a lot of people would have declared bankruptcy, those inflated homes would be rental properties, and in another two years, those people would be out of bankruptcy, solvent, and consumers.
    Well, I could repost a lot of links that I have filed, but it is not worth it. The fact is that it didn't take much to tip such as the housing market into uber-inflation. 5-10% in new buyers gets the bubble going, and then it is a beast unto itself. Just as dot-coms were in the latter 90's. Companies that never made money having IPO's worth billions, buying naming rights to football stadiums, and then folding two years later. The term "day trader" arose, and some folks made a ton of loot.

    In the housing bubble, government gave it that initial momentum via the massive expansion of Fannie and Freddie in the 90's and their headlong dive into sub-primes. Then it was "hold on". Folks so easily forget that the only ones burned with the housing bubble were the last ones holding the bag. If you sold before the pop, you did well, if not better. But again, while it doesn't take much government to tip things artificially well, and it also doesn't take much to collapse it all.

    And when we woke up, everything said "Made in China". Or similar.
    Last edited by Eighty Deuce; 10-25-11 at 10:42 PM.

  6. #26
    Guru
    Councilman's Avatar
    Join Date
    Apr 2009
    Location
    Riverside, County, CA.
    Last Seen
    11-04-11 @ 10:16 PM
    Gender
    Lean
    Conservative
    Posts
    4,454
    Blog Entries
    10

    Re: Who to blame: the lender or the borrower?

    All of the Above covers it but I have to spot light the Housing and Community Development Act of 1977 wich got the bubble expanding way back over 30 years ago, so blame the 1977 Congress, Senate, Jimmy Carter and while you're at it, all those who have followed and did nothing about it.
    There is plenty of blame to go around.

    Funny, Carter had a winning smile and loosing Administration, Obama has a great line of BS and a loosing Administration.

    Wow, it's amost like those three monkeys only were missing one who should I pick. I Carter looked like no evil but was, we have does nothing but evil, and whom should I pick for the last one? Oh I got it, Clinton can be almost evil, but not quite.

    Who to blame: the lender or the borrower?-220px-jimmycarterportrait2-jpg

  7. #27
    Student
    Join Date
    Oct 2011
    Last Seen
    10-26-11 @ 11:02 PM
    Gender
    Lean
    Independent
    Posts
    171

    Re: Who to blame: the lender or the borrower?

    Quote Originally Posted by Rhapsody1447 View Post
    If a person defaults on a loan, who deserves the blame the lender or the borrower? As credit eases and lending standards go down, more and more loans are made to people with riskier credit histories. A lot of times this can lead to predatory lending practices (e.g. adjustable rate mortgages that reset at a much higher interest rate, banks pushing loans on people who can't afford them), however sometimes it is necessary for the government to ease credit conditions in order to help spur economic growth (e.g. by making it easier for people to buy a house or start a new business).

    So if I take out a loan and fail to repay it, is it my fault or the bank's?
    Yours, but if the bank gave you a $500,000 home loan for only $10,000 down, or something else stupid along those lines (as seems to have happened in many cases before the recession), then the bank definitely deserves some blame for ****ing up so bad on something they are supposed to be professionals at. Government insuring loans isn't necessarily a bad thing, but only if they are only insuring ones that were made to creditworthy borrowers.

  8. #28
    Professor

    Join Date
    Feb 2011
    Location
    MI and AZ
    Last Seen
    03-15-15 @ 01:29 PM
    Gender
    Lean
    Other
    Posts
    1,581

    Re: Who to blame: the lender or the borrower?

    Quote Originally Posted by Thunder View Post
    lenders should make sure those they lend large sums of money to have the means to pay back the loan.

    if they don't do that, they put their investors in jeopardy.
    Note that the lenders employees don't put themselves in jeopardy, they get their commission, bonus and salary and don't have to give back the money they made in getting ridiculous loans done.

  9. #29
    Sage
    Cephus's Avatar
    Join Date
    Mar 2007
    Location
    CA
    Last Seen
    Yesterday @ 10:25 PM
    Gender
    Lean
    Slightly Conservative
    Posts
    29,797

    Re: Who to blame: the lender or the borrower?

    Quote Originally Posted by Rhapsody1447 View Post
    If a person defaults on a loan, who deserves the blame the lender or the borrower? As credit eases and lending standards go down, more and more loans are made to people with riskier credit histories. A lot of times this can lead to predatory lending practices (e.g. adjustable rate mortgages that reset at a much higher interest rate, banks pushing loans on people who can't afford them), however sometimes it is necessary for the government to ease credit conditions in order to help spur economic growth (e.g. by making it easier for people to buy a house or start a new business).

    So if I take out a loan and fail to repay it, is it my fault or the bank's?
    I don't know that fault is a concern here, I'm more interested in whose responsibility it is. If you sign your name on the dotted line, you guarantee to repay the loan regardless. If you can't do it, you default on the loan and ought to lose the house, period. Now that's not to say that the bank might not bear some fault for misleading the consumer but that's a separate issue. You took the loan, you signed the document, you either follow your agreement or you turn over the keys.
    There is nothing demonstrably true that religion can provide the world that cannot be achieved more rationally through entirely secular means.

    Blog me! YouTube me! VidMe me!

  10. #30
    Professor
    Sig's Avatar
    Join Date
    Sep 2011
    Last Seen
    11-29-13 @ 11:55 PM
    Gender
    Lean
    Other
    Posts
    2,179

    Re: Who to blame: the lender or the borrower?

    Quote Originally Posted by Rhapsody1447 View Post

    So if I take out a loan and fail to repay it, is it my fault or the bank's?
    It's the bank's fault. It's their business. They are presumably the one's to suffer should you default. Therefore, the real onus is on them to make sure you are good for the loan.

    Of course, if Uncle Sam is guaranteeing the loan, then the onus is on Uncle Sam, which means the onus is on the taxpayer. Therefore, if you are a taxpayer, then the onus is on you. If you are not a taxpayer because you do not make enough money to be a taxpayer, then the onus is not on you, and you can do whatever you want.

    That being said, if you are not a taxpayer and you default, then those who are taxpayers should retain the right to have you, and the banker who granted you the loan, drawn and quartered, live on pay-per-view.

Page 3 of 6 FirstFirst 12345 ... LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •