If you borrow money from a bank / credit card, are you responsible for repayment?

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I asked a question earlier this morning about this same issues. Some one listed a bunch of points that said that I was wrong. Here are their comments and my responses. Who is right?

FH: It is about the banks being deceitful in their practices to get the homeowners those loans.

It will be bad if the banks seize the properties. First off, these people will have nowhere to go.

BOB: What a bunch of BS. These people can go rent a apartment. Which is what they should have done in the first place.

If the person is too ignorant to understand the terms of the loan, they should have done the following:
1) Hire a lawyer review the papers
2) Have the lawyer or bank explain the loan in plain english
3) If they do not understand the loan terms, they do not sign the loan papers.
4 hours ago

FH: Secondly, the people who live in the homes around the foreclosed will see a dramatic decrease in their property value, over the decrease that has already shown over the past years.

BOB: The value of the home is only relative unless you go to sell it. Taxes are collected on the relative value. If the value of the neighborhood goes down, you can get your taxes lowered by showing this.

If and only if you want to sell in a depressed market do you lose value in the home. Over 90% of the people are making payments on time. It is the bottom 10% of society that is dragging the economy in the toilet.
4 hours ago

FH: These people were victims of falsified securities from the banks, who knew what they were doing, and therefore these people need someone to stand up for them.

BOB: If you are too ignorant to understand what is going on, you deserve what happens to you. That is why we have Lawyers to go through these things and advise the client. Most people don’t want to spend the money on an attorney. So whose fault is it that someone is ignorant?
4 hours ago

FH: Also, some of these people are people who nearly or did pay off their homes, and the banks got them to refinance knowing that the subprime mortgage market would spill over, and now these people are upside down.

BOB: Incorrect. The bank offers loan products. These people went to the bank and said I WANT TO BORROW $ 100,000 to pay off my credit cards, car loans, make repairs to my house, etc.

The bank gave them money in exchange for the person putting their house as collatteral. If you don’t know what that is, look it up in a dictionary.

The person failed to pay the loan under the terms. So who agreed to the terms of the loan. The person who WENT to the bank and asked for a loan and willingly signed the papers. The bank did not force them to sign the loan papers.
4 hours ago

14 Comments
  1. Reply
    Jim C
    January 21, 2011 at 10:32 pm

    Of course you are.

    But lenders, such as banks, also have a duty to their shareholders not to make loans to people who can’t repay. Would you buy part ownership of a bank if you knew that the bank was doing a terrible job of assessing risk before lending to people?

    The fact is that both sides were derelict in their duties. You don’t become a successful bank by making bad loans, and before you make a loan, you’re supposed to assess the risk of default. Lots of U.S. banks failed to properly assess the risks of default, and so they contributed to the current problems.

    I’m not saying the borrowers are not also culpable. They both are.

  2. Reply
    Killer Queen
    January 21, 2011 at 10:46 pm

    In our court system, ignorance of the law is no excuse. Buying a home is simple math as to whether you can afford it or not. If I make $ 2,000 a week and someone tells me that I can afford a $ 4,000 a month mortgage, how stupid would I have to be to believe them?

    Banks can afford to loan money to those who will probably default because they make so much on the interest of those who do repay their loans. Targeting low-income neighborhoods for mortgages was unethical but not against the law. But the main issue is whether we should continue to give more chances to repay. If you can’t afford the house, giving you $ 1,000 is not going to help. We just get further into debt.

  3. Reply
    I am not Peyton. Geez
    January 21, 2011 at 11:36 pm

    I agree with BOB

  4. Reply
    zapper23
    January 21, 2011 at 11:53 pm

    No. In today’s society you are responsible for nothing. It’s you mother and father who are at fault. And if that is not the case….it was the neighborhood you grew up in or the teachers you had. So don’t get uptight about the small stuff. Remember…..you are NOT responsible.

  5. Reply
    ogreat1
    January 22, 2011 at 12:18 am

    As long as the debt was was incurred in good faith you are. If anyone shams you into debt there is a provision which negates the debt.

  6. Reply
    Shark bait
    January 22, 2011 at 12:24 am

    You borrow, you repay. How can that be difficult to understand.

  7. Reply
    Old Goat
    January 22, 2011 at 1:16 am

    Nope the era of responsibility has come to an end unless your a tax paying white male. Otherwise spend to your hearts desire the tax payer will pick up the tab.

  8. Reply
    jwoody88
    January 22, 2011 at 1:46 am

    Waaaaaayyy too much to read…

    Yes, you are supposed to pay it back. But, it’s a free country and you can default on it if you want. That is definitely not in your best interest though. It’s one of the problems that has gotten us into the current mess.

  9. Reply
    The_Firefighter
    January 22, 2011 at 1:59 am

    I’m going to call my lenders and tell them today that the president has said that I don’t have to pay my bills anymore =P

  10. Reply
    violated2
    January 22, 2011 at 2:35 am

    not according to the “Obamanator”…

  11. Reply
    namsaev
    January 22, 2011 at 3:30 am

    If you borrow the money. Yes you are obligated to pay it back. If you don’t understand the terms you shouldn’t borrow the money. If you do you are stupid.

    On the other hand if you loan someone money and you don’t check their ability to repay the loan first– you are even more stupid than they are.

    I’m for full disclosure on the part of BOTH parties.

  12. Reply
    Mike
    January 22, 2011 at 3:31 am

    Yes your responsible for the loan.

    Note: If you make $ 2,000 a week ($ 8,000 a month), then you CAN afford a mortgage of $ 4,000 monthly. It seems that some people do have a problem with simple math.

  13. Reply
    VoiceOfReason
    January 22, 2011 at 3:41 am

    No! Obama is! Just ask him!
    He won’t say NO in public to any fawning supporter!

  14. Reply
    Chupate esa!
    January 22, 2011 at 3:42 am

    I guess you are under the impression those people losing their jobs is their fault, as if they control the economy. Is the banks who do not want to assume the loss of the risk taken by lending money to unqualified people or the underminding of economic status.

    If the bank lend money and they can’t get it back they have the right to take the property back but when they do that the bank is the one incressing their own loss by devaluing those properties due to excess in supply and lack of cash on the streets.

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