Law in Contemporary Society

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DanKarmelSecondPaper 25 - 22 Jul 2010 - Main.DanKarmel
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  • Conclusion
    • Banks expressly consider how a given borrower, loan, and security affect the possibility of default; that affects the benefit required in exchange (i.e. the rate).
    • Borrowers pay more or less and banks receive more or less based on the bank’s assessment of these risks.
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    • Where a borrower has an absolute obligation to pay, the bank is insulated from risk; the mortgage is a pre-defined security and income stream. That would mean borrowers pay additional rates and the banks receive additional rates without a corresponding exchange in the benefit/risk.
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    • Where a borrower has an absolute obligation to pay, the bank is insulated from many of the risks it bargains for. That would mean borrowers pay additional rates and the banks receive additional rates without a corresponding exchange in the benefit/risk.
 
    • A borrower who chooses to default is exercising a right that was reserved in exchange for benefits given to the lender.
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<		-- DanKarmel - 11 Jul 2010
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>		-- DanKarmel - 22 Jul 2010
 

Revision 25r25 - 22 Jul 2010 - 03:37:45 - DanKarmel
Revision 24r24 - 11 Jul 2010 - 01:51:03 - DanKarmel
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