Quote:
Originally Posted by ThurgreedMarshall
But on the whole, the banking industry absolutely knows that people will borrow more than they can pay, especially if you tell them that they only have to pay $700/month for the first five years on an $800,000 5-1 ARM mortgage and that they shouldn't worry about what happens after the 5th year because you can just refinance! Property values never go down.
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People relied on bankers to not lend them more than they can afford. Which isn't entirely irrational. Why would be bank make a loan that the borrower can't repay?
Oh, wait.
