Why? Unless there is some kind of call feature in your mortgage, the bank can't do squat, except ask you to buy another window. Once the loan has been made, you've got what you want and they sweat, wondering if you are going to pay them back. Then it is the lender's turn to be worried about what the borrower does for the next ___ years.
Ask your self two questions: Do you wonder more about your credit card balance or your investment account balance(s)?
If your stock or bond tanks, does the issuer of your investment call you and beg you not to sell it, like your credit card card company calls you looking for its payment if you miss a month?
In many ways, the borrower is sitting in the driver's seat -- after they get the loan.
Okay, wrong analogy. Let me put it another way -- if they don't show up to the party and buy our bonds, then we have to increase interest rates. In order to finance those increased interest rates, the rates to bank have to increase. When interest rates start edging above seven percent for a mortgage, the you may see a collapse in housing prices.
And yes, I know the old saying, owe the bank $10,000 and they own you. Owe them $10 million and you own them.
China, however, is a special case. The leaders really don't have to answer to anyone.
The borrower must pay interest. The lender receives interest. I think the lender is better off as long as the borrower can not declare bankruptcy, and the US govt. can not do that for if they did the consequences would be terrible for china and the US.
Quote: If your stock or bond tanks, does the issuer of your investment call you and beg you not to sell it, like your credit card card company calls you looking for its payment if you miss a month? In many ways, the borrower is sitting in the driver's seat -- after they get the loan
Here we go again.. another pro trade deficit type. Ones that think the person who can't pay their monthly mortgage is the ONE in power over the lender. Today right is wrong and wrong is right.
My have our common senses been warped.