Saturday, March 7, 2009

Rewarding the reckless

House approves mortgage bankruptcy overhaul

The policy measures are beginning to look more and more extreme. Isn't this simply forced wealth confiscation from creditors to debtors? I'm sure some African dictators would approve of these methods.

Posted by paul @ 11:38 AM (777 views)
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2 thoughts on “Rewarding the reckless

  • Extreme? Lenders aren’t obliged to lend, and when they do they have to accept that lending has associated risk. It’s not “forced wealth confiscation”, they’ve taken a gamble to make a profit and they’ve lost.

    Is your issue with the concept of bankruptcy, or with the removal of the special treatment of the primary residence in bankruptcy cases?

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  • I don’t think you understand rich.

    This is using taxpayers money to ringfence losses that homeowners incur because of the falling value of their asset relative to the cost of their mortgage.

    It is effectively shielding gamblers from losing, using creditors’ money. That is extreme. And it is functionally no different to wealth confiscation.

    Don’t you think?

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