One of the interesting things about the subprime mortgage mess is that, in part due to underestimating the risk and in part due to federal subsidies, banks went on a lending spree giving mortgages to a bunch of people who couldn’t otherwise have bought a house. Now that some people can’t afford the houses they wouldn’t ordinarily have been able to buy, it’s a terrible tragedy. But unless we think that before the spree, lenders found every last person who would pay off their mortgage, there are clearly people today who own homes who otherwise wouldn’t. The banks, on the other hand, are staring into the abyss.
It’s an odd sort of capitalist scandal that allows the poor to buy houses and punishes the bankers.
31 July 2008
Odd That We Think The Victims Are The Ones Who Put No Money Down
I put this comment up at Thought-Mesh, but thought that it was worth cross-posting here:
Posted by David at 9:10 AM