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Originally Posted by Wagner
Hmm, how to answer this. The risk is of the value, not home ownership. That line seems to keep getting blurred in this thread.
I'm pretty sure any bank hopes that if you sell your home you make enough to cover the loan 
So lets see, with this logic, the alternative to having lenders be accountable to the customer they granted a loan to, based on the value they set for the asset..we'd rather have government bail outs. |
Home ownership includes many risks and expenses. Values are just one aspect. With home ownership comes many costs and question marks such as insurance (flood, hazard, fire, etc.), maintenance costs, interest, taxes, and appreciation or depreciation. Plus the whole liquidity issue that it may take you a while to sell your home if you need to get out of it.
Nobody is forcing anyone to blindly buy property, use their homes equity as an ATM machine, buy more house than they can afford, or get ARM mortgages. The people who choose to do these things are really the ones to blame.
Just curious, but how can you expect a bank to eat the costs if there is a decline in your homes value, but not have any cut of future profits?