2009-10-03blogspot.com

Once someone decides to stop paying, the loan may be irrecoverable no matter what incentives the lender offers down the road. On the other hand, if the lender offers new terms to anyone who asks, everyone will ask. Either way the lender loses. Moreover, the lender may not easily be able to figure out which option is worse.

The only time the lender is not forked is when someone has a lot of equity in the house issues a threat. Otherwise the lender has to choose between two very unpleasant alternatives, perhaps without even being aware.



Comments: Be the first to add a comment

add a comment | go to forum thread