With the discussion of The Big Short, I thought I would clutter it with my own experience. Admittedly, that is about as small a sample size as one can get but it is of some interest, I think.
I knew a real estate agent who worked in Maryland's high-end Louden County and I asked her if she had defaults in that rich community at the time of the 2008 crash. She allowed that she had and said one of the biggest was an owner who had purchased, sight unseen, four expensive homes when the banks were giving 125% of equity. He pocketed 25% of the purchase price of each and then defaulted on the payments. He was a Swiss national living in Europe, had no intention of paying the interest, simply took the 25% profit as a gift and walked away.
These kinds of mindless distortions are delicacies for predators. And we homeowners, investors, taxpayers and consumers are still paying for it.
I knew a real estate agent who worked in Maryland's high-end Louden County and I asked her if she had defaults in that rich community at the time of the 2008 crash. She allowed that she had and said one of the biggest was an owner who had purchased, sight unseen, four expensive homes when the banks were giving 125% of equity. He pocketed 25% of the purchase price of each and then defaulted on the payments. He was a Swiss national living in Europe, had no intention of paying the interest, simply took the 25% profit as a gift and walked away.
These kinds of mindless distortions are delicacies for predators. And we homeowners, investors, taxpayers and consumers are still paying for it.
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