Bubble Real Estate

Matt Ygelsias is (partly) in a forgiving mood about the housing bubble:

Someone who takes out a loan they can’t afford and then defaults doesn’t deserve to be “blamed” for anything. They suffer consequences for their actions. Much as the person who issues a loan the borrower can’t pay back doesn’t really deserve “blame.” Both parties to such a deal suffer from the collapse of the lending agreement. Everyone has an incentive to avoid lending money to bad borrows and an incentive to avoid becoming a bad borrow. But mistakes happen and people do dumb things, and then they bear the consequences. That’s life.

Maybe. But when you look at foreclosure records, as I have, and see that banks were offering and people were accepting home mortgages at consumer-credit levels of interest, you have to wonder.

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