Rick Kahler,president of Kahler Financial Group, has a good column on the subprime lending crisis in the Rapid City Weekly News this week. I agree with him that it would be funny if it weren't so sad.
Lenders are faced with losing the difference or foreclosing on the loans and taking the houses to sell themselves.
Again predictably, subprime borrowers and their elected officials are looking for someone to blame. Perhaps they don’t need to look far. A recent study cited by The Wall Street Journal, done by Carolina Katz Reid, suggests the fundamental cause may be a flawed government policy.
If the lenders broke the terms of the loan agreement, then they would be in the wrong. If the borrower breaks the terms of the loan agreement (i.e. specifying that $X amount is paid monthly on X date), then the borrower is in the wrong. If the borrower continues to fall farther and farther behind on their payments, the lender has no choice but to protect their financial interest.
As the Bible says, "The wicked borrow and do not repay." Blaming loan companies when borrowers don't repay their loans is just Marxist class envy.
0 comments:
Post a Comment