As you yourself point out, there's a moral hazard issue, too - why do I want to reward people who signed for a mortgage they couldn't pay, again?
Are you talking about people who a priori knew that they wouldn't be able to afford their house, but wanted the thrill of buying something large?
Are you talking about people who were responsible, knew their limits, and made their payments on time every month, but $BADTHING happened, and now they can't move or sell, while getting hit with an adjustment they never thought they'd have to face (due to moving before then)?
I think that there are remarkably few of the former, and a whole bunch of the latter.
Using the power of 20/20 hindsight to retcon people into being deadbeats doesn't sound like "moral hazard" to me.
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momijizukamori
no subject
Date: 2008-09-22 14:25 (UTC)Are you talking about people who a priori knew that they wouldn't be able to afford their house, but wanted the thrill of buying something large?
Are you talking about people who were responsible, knew their limits, and made their payments on time every month, but $BADTHING happened, and now they can't move or sell, while getting hit with an adjustment they never thought they'd have to face (due to moving before then)?
I think that there are remarkably few of the former, and a whole bunch of the latter.
Using the power of 20/20 hindsight to retcon people into being deadbeats doesn't sound like "moral hazard" to me.