The borrower SHOULD be informed. But like anything else you buy, the promotions are misleading. When I read something like FREE or LOW INTRODUCTORY RATE, I STOP READING. But I know people with near genius IQs that are still tempted by it. If people really understood what they are getting themselves into, they wouldn’t go for it in the first place. Would YOU have gone for these mortgages? Whether or not there are LEGAL obligations, many on the board here also talk about MORAL obligations, and they don’t stop with sex.
When I got mortgages, there was a blizzard of points and extra costs, and many papers to sign, and fast talking bankers glazing over details.
My position is that these people should have known, but they didn’t. I don’t think they went in thinking about the government bailing them out for the most part.
The media of course wouldn’t do stories about the downside of these mortgages because these mortgage companies were providing a huge portion of their advertising revenues.
I don’t think this is a Left Wing or Right Wing viewpoint or issue. It is a MORAL issue.
One more thing, whether or not the government bails the borrower out, real estate prices will fall, and that affects ALL OF US. If there were a LEGAL obligation for the lender to EDUCATE, all of us would benefit. Apparently, a MORAL obligation is not enough.
Evidently many here don’t think MORAL responsibility is applicable to business deals. Strange isn’t it?