[cramjabsyn]

If there are demonstrably predatory mortgages in place then yes they should be forgiven, or at the the least converted to a low rate standard loan without mandatory insurance.

We need better laws and repercussions against screwing over the working class.

[aeternum]

Ah yes when those too-good-to-be-true variable rate mortgages ramp up the rate due to inflation, we can just relabel them as predatory.

It's not like the risk of was ever disclosed to the purchaser. Oh wait.

We continue to bail out and incentivize poor decision-making, then wonder why the proportion of poor decisions seems to be increasing.

[cramjabsyn]

Whose poor decision is that? The banks created those products, the banks profit from them massively, and the banks receive the socialized bailout using our money.

How exactly is being approved for a loan to buy a first home the fault of the purchaser?

We can shop in any grocery store trusting that the products are safe to consume. Meanwhile, banks are allowed to legally sell financial poison?

Sure, compare rates, terms, insurance, etc. But financial time bombs like you describe should be illegal. The banks should suffer the consequences of their greed. And the working class should not be left homeless as a consequence.

[jcalvinowens]

> Meanwhile, banks are allowed to legally sell financial poison?

You will rarely catch me defending the banking industry... but what you're calling "financial poison" here is just how mortgages work in most of the world. A variable rate loan isn't inherently predatory, that's how most loans work.

There are many legitimate reasons a buyer might prefer a variable rate mortgage: the trade off is easy to understand. It takes ten seconds to do an internet search for "interest rates past 30 years" and see the risk. I refuse to accept that most people with ARMs were taken advantage of.

[gustavus]

The people who took variable rate loans made the poor decision. The banks didn't force them to take the loan the banks didn't sign the paper saying the purchaser understood. At some point adults need to be treated like adults and be allowed to make bar decisions.

[hackeraccount]

Sometimes they're good and sometimes they're bad. I tend to have most faith the parties with the most interest ( :-) ) in the question - the borrower and the lender - are the best ones to manage the risk.

3rd parties will both be lacking in information and have obligations beyond just seeing the loan paid back.

[cramjabsyn]

No. Again. Tax dollars bailed out the banks, after they pocketed billions in profits from predatory arm and similar loans.

Who bailed out the home owners? No-one. They lost their homes, their credit was ruined. Decades worth of setback. But they deserved it? Please. It was a trap in the name of shareholder profits.

The problem is systemic and blaming the consumer is myopic at best.

[aeternum]

This is what annoys me about people living in the US. Like why not move to Singapore or something if you want government allocated housing. It's probably the best implementation of government housing, government healthcare, etc. in the world, so just go there and be happy.

Let the US remain free where consumer choices matter. You can take a risk with an ARM mortgage and might hit it big, but you might also have to pay the price. That's freedom. People can always downgrade homes, foreclosures are not necessarily a bad thing when there is limited housing supply.

[tekla]

I struggle to understand how student loads are predatory

[cramjabsyn]

some are predatory. They are structured in a way that after years of on time payment the principal amount increases

School loans should not be modeled after payday loan sharks.

[tekla]

Can anyone show me one of these loan agreements?

I distinctly recall talking to a loan officer when I made my 100k+ student loan, and the paper had in very large numbers, amount loaned, loan duration, per month loan cost, the interest rate, and total loan cost.

I want to see a student load agreement where the minimum monthly payment simply does not create an expected end date for the load.

[cramjabsyn]

As just one data point look into navient

[tekla]

I have had loans with Navient. It wasn't anything particularly interesting.

[cramjabsyn]

Uhm did you receive your settlement from their class action lawsuit?