Posted by
Playful Walrus on Saturday, November 06, 2010 6:22:34 PM
Responding to a piece that suggested that it may be bad for the economy if certain people actually pay their mortgage, Pieter Vandenberg of El Cajon
wrote in to the Los Angeles Times:
Lenders are learning quickly not to lend, which hurts the economy.
Businesses with money will use the money in ways that makes them the most money. If lending becomes too risky or costly, they won't lend.
And since when did being underwater become a reason not to repay a loan? After making home loan payments as scheduled, I guarantee that when the last payment is made, the homeowner will not be underwater (unless asset values are negative, which is implausible). In fact, being underwater on a loan is probably the norm for consumers. Buy a car with a normal down payment, drive it for a few months and see what the car is worth; you'd probably be underwater.
It's time for the borrowers to realize they did this to themselves. Nobody made them borrow the money, and it is time to pay up.
Couldn't have said it better myself. My wife and I did without buying a single family home until we could put enough down and secure a fixed-rate mortgage for a house that met our needs, a mortgage we could afford.