[bmalicoat]

I agree with you entirely. But from the person looking for (or getting) a mortgage, they likely didn't know the lender was going to chop up their mortgage and mix it with bits of hundreds or thousands of others' and sell it to another party. It's obvious, like you say, that the system wasn't incentive compatible and that the people writing and selling the mortgages had no reason to ensure the borrowers paid.

Sadly there are still no regulations preventing this from happening again.

[dantheman]

What issue does the person getting the mortgage with how it's financed? You seem to try and remove the responsibility from the borrower, which is where it should be. This is most likely the biggest financial decision they will ever make and they should understand it.

[bmalicoat]

Yes, but there is no way for them to know that their mortgage will be sold, that is strictly up to the financier and the third party. Therefore a borrower cannot know what is happening to their mortgage other than they have to pay it.

However this doesn't remove the irresponsibility of taking a mortgage that you cannot afford to pay, which may be your point. Sorry if I misunderstood.