[Crichton]

Show me in the documents where the value of the house was guaranteed never to go down. The lender is not responsible for the value of the collateral increasing or decreasing.

But the lender knows that they're assuming risk in the case of default. They even require borrowers to purchase mortgage insurance to help mitigate that risk!

Default is a cost of doing business. If the banks don't like defaults, they could try a little underwriting for a change.

Look, it's just business. The borrower isn't married to the lender; they're doing business together. Yes, these borrowers made a poor decision to buy in an overvalued market. But the lenders made a poor decision to lend, with the full knowledge that they could be on the hook. It makes no sense to say the borrowers have some moral obligation to bail out the banks' poor decisions as well as their own.

[clintonh8r]

The moral obligation is to live up to the commitments that one makes. It's amazing how many "conservatives" don't seem to get that. I mean, it's "just business", right? Hell, most car loans are under water the day they're made; how about all those borrowers just toss in the keys?

For the record: I have NO SYMPATHY for someone who defaults on an obligation even though they have the ability to pay. I really hope they suffer the consequences, which they apparently have not really thought through. I'm done discussing this. Frankly, the attitiude of some FReepers on this subject is pretty disappointing.