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DanKarmelSecondPaper 7 - 18 Apr 2010 - Main.DanKarmel
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| | | After The Sale | |
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< | For whatever went wrong in the mortgage collapse, the originations themselves do not appear to be swindles in the vein of those mentioned by Leff. Several critical elements are missing, especially a fabricated back story or the artificial creation of some reason why the con man and the mark must work together but not with others. One could argue that the mortgage companies needed a particular borrower for any given loan, since only that borrower had purchased the home, but that would be a somewhat strained interpretation, especially within the open and competitive market that existed for mortgage lending. That said, which mechanisms identified by Leff help explain the way that borrowers act after the sale, especially when their mortgages are underwater? | >
> | For whatever went wrong in the mortgage collapse, the originations themselves do not appear to be swindles in the vein of those mentioned by Leff. Several critical elements are missing, especially a fabricated back story or the artificial creation of some reason why the con man and the mark must work together but not with others. One could argue that the mortgage companies needed a particular borrower for any given loan, since only that borrower was purchasing that particular home, but that would be a somewhat strained interpretation, especially within the open and competitive market that existed for mortgage lending. That said, which mechanisms identified by Leff help explain the way that borrowers act after the sale, especially when their mortgages are underwater? | | | Wall Street was playing the game. They took their risks and they certainly knew how to walk away from a bad deal. Why aren't individual borrowers allowed to play the game too? Instead, they are the ones being called upon to make good on the moral obligations that are somehow being read into the contracts. What are the things that mortgage companies do to altercast their borrowers into a certain role? For one, they call the borrower a “homeowner.” Of course, there’s a difference between that and owning your home free and clear. Yet the mortgage industry wants you to be a homeowner right away, regardless of what sticks you get in that bundle - because why would a homeowner walk away from the home he owns? |
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