Aren’t we rewarding bad behavior? Isn’t there a moral hazard issue here?

A:

It’s ridiculous to hear Bank of America or JP Morgan Chase discussing someone else’s moral problems. While individual borrowers may have made bad decisions, the impact of any individual borrower’s decision is very tiny compared to the huge impact of the Wall St. created bubble.

Most borrowers did not get into trouble by “buying more home than they could afford”, as banks allege. They got into trouble being told by everyone (bankers, mortgage brokers, realtors, government leaders, even pastors) that they should be regardless of the price because the price would only go up. Promises were made to refinance and never kept.


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  • followed this page 2013-05-12 17:37:40 -0700