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If Borrowers Should Accept Their Fair Share Of Responsibility


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Or is that a rhetorical question on a forum stuffed with STR fundees thanks to over inflated asset prices underpinned by liar loans?!?

It is also complete bllks. If I'm selling something, it interests me not whether how they have derived their money.

Or do you think that all sellers should trace the origin of all the money that is offered?

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Or is that a rhetorical question on a forum stuffed with STR fundees thanks to over inflated asset prices underpinned by liar loans?!?

Accept responsibility as in "well, yes, I played my part in wrecking the economy", or accept responsibility as in "oh, you want me to hand some of my ill-gotten gains back? Sounds reasonable..."?

The latter would be absurd and the former would be meaningless.

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It is also complete bllks. If I'm selling something, it interests me not whether how they have derived their money.

Or do you think that all sellers should trace the origin of all the money that is offered?

mmm criticising buyers who over borrowed to buy your over priced asset......

That's definitely staying in the keep net!

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Accept responsibility as in "well, yes, I played my part in wrecking the economy", or accept responsibility as in "oh, you want me to hand some of my ill-gotten gains back? Sounds reasonable..."?

The latter would be absurd and the former would be meaningless.

Now imagine the question was about buyers and not sellers....

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Now imagine the question was about buyers and not sellers....

Should buyers accept responsibility for borrowing more than they could reasonably pay back? They probably will at some point, irrespective of whether that actually offers a way out of this mess.

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Or is that a rhetorical question on a forum stuffed with STR fundees thanks to over inflated asset prices underpinned by liar loans?!?

A good question.

My answer is no on two fronts :

- Net sellers have increased supply which held prices lower than they would otherwise have been

- Net sellers saw that prices were too high and made no sense. How buyers funded the purchase was not uniform and beyond the control of the sellers.

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Accept responsibility as in "well, yes, I played my part in wrecking the economy", or accept responsibility as in "oh, you want me to hand some of my ill-gotten gains back? Sounds reasonable..."?

The latter would be absurd and the former would be meaningless.

Why would the latter be absurd?

That is to say, why should it be more absurd than any other form of taxation? Oh, right, because that brilliant, inspirational government of the day thought it right to reward unproductive speculation and penalise hard work.

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Why would the latter be absurd?

Because it would be a retrospective tax on a particular class of transaction. Even if that wasn't morally dubious, think about what the STR might have done since selling:

  1. Downsized, but still paid more than the house was 'worth'

  2. Spent it on starting up a business

  3. Spent it on other assets

  4. Spent it on non-assets (holidays, hookers, etc.)

  5. Deposited it

How would you sort that out?

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mmm criticising buyers who over borrowed to buy your over priced asset......

That's definitely staying in the keep net!

Err, no. If I'm selling a house, I care not how the buyer has got their money - whether it is paid in cash, mortgage, whatever. if the buyer has made a deal with someone to extend them credit to buy my property, how is that anything to do with me? It is a contract between the bank and the buyer, how can their promise to each other be anything to do with my selling someting?

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Err, no. If I'm selling a house, I care not how the buyer has got their money - whether it is paid in cash, mortgage, whatever. if the buyer has made a deal with someone to extend them credit to buy my property, how is that anything to do with me? It is a contract between the bank and the buyer, how can their promise to each other be anything to do with my selling someting?

I think the point is that a STRer understood that we were in a bubble and took advantage of it. Personally, I don't have any real problem with that, but the guileless seller in your scenario doesn't quite match reality. That said, I find it a bit rich when STRers complain about the lack of crash and lack of repos...

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I think the point is that a STRer understood that we were in a bubble and took advantage of it. Personally, I don't have any real problem with that, but the guileless seller in your scenario doesn't quite match reality. That said, I find it a bit rich when STRers complain about the lack of crash and lack of repos...

Regardless of when someone sold, if they sold ahead of the crash, they judged it right. Willing buyers let them effect their call.

As to the QE and other changes since then, they have a point; the rules changed against previous precedent.

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Will gold bugs hand back any profits they've made? Will art speculators hand back any gains they've made?

Will aunt Doris hand back any profit she makes pawning the family silver? Will uncle Fester hand over any profits he made on the E-type he's owned for 50 years?

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It is also complete bllks. If I'm selling something, it interests me not whether how they have derived their money.

Or do you think that all sellers should trace the origin of all the money that is offered?

Exactly

What a really weard OP concept.

And they sold at probably the exact right price, because they did sell.

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Will gold bugs hand back any profits they've made? Will art speculators hand back any gains they've made?

Will aunt Doris hand back any profit she makes pawning the family silver? Will uncle Fester hand over any profits he made on the E-type he's owned for 50 years?

Who's on about handing any gains back?

Some very defensive responses so far, obviously a touchy subject.

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Who's on about handing any gains back?

Some very defensive responses so far, obviously a touchy subject.

Why is my response touchy? All I see are contract5s between people. I have no qualms about qho contracts to who, as long as they don't come to me to bail them out if things don't work out.

For the record, I have never owned a house, had a mortgage, I'm not an STR.

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Who's on about handing any gains back?

Some very defensive responses so far, obviously a touchy subject.

Ok, picked that up from later posts.

As others have pointed out, where is the vendors responsibility for liar loans, as mentioned in your OP?

Edit: I WAS an STR, bought in again though!

Edited by AThirdWay
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Or is that a rhetorical question on a forum stuffed with STR fundees thanks to over inflated asset prices underpinned by liar loans?!?

In a crash, only very few owners sell up at the top price in the market. If a buyer felt what they were selling they had to have, and were happy to buy with their own money and any debt required, that's their decision.

The 2005-2008 STRs who are happy with what they sold for, ought to be held in high esteem. Sadly they've not seen their decisions vindicated as would have otherwise been the case with less intervention to support house prices.

When the market turns down, the dynamic goes into reverse. Only a very few owners of a collapsing financial asset trade it for money at 90 percent of peak value. Some others may get out at 80 percent, 50 percent or 30 percent of peak value. In each case, sellers are simply transforming the remaining future value losses to someone else. In a bear market, the vast, vast majority does nothing and gets stuck holding assets with low or non-existent valuations. The "million dollars" that a wealthy investor might have thought he had in his bond portfolio or at a stock's peak value can quite rapidly become $50,000 or $5000 or $50. The rest of it just disappears. You see, he never really had a million dollars; all he had was IOUs or stock certificates. The idea that it had a certain financial value was in his head and the heads of others who agreed. When the point of agreement changed, so did the value. Poof! Gone in a flash of aggregated neurons.

Home owners who live on HPC, only rarely suggesting they're supportive of seeing a HPC (but with little enthusiasm), whilst many posting all sorts of anti-crash views, need to have some responsibility too.

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The 2005-2008 STRs who are happy with what they sold for, ought to be held in high esteem. Sadly they've not seen their decisions vindicated as would have otherwise been the case with less intervention to support house prices.

But isn't it a little hypocritical to try take advantage of a manipulated market and then complain that the market's been manipulated?

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But isn't it a little hypocritical to try take advantage of a manipulated market and then complain that the market's been manipulated?

Yup, it is extremely hypocritical. But I suppose that's STR's for you - the bunch of lovable rogues they are! I think they are all a bunch of idiots.

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It is also complete bllks. If I'm selling something, it interests me not whether how they have derived their money.

Or do you think that all sellers should trace the origin of all the money that is offered?

bankers are forced to.

Your accountant can go to prison if he knows and fails to report illicit cash funds YOU are handling.

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