Quote:
Originally Posted by LogicalApex
Do you pay a higher mortgage rate due to foreclosures in your area? Or a higher car loan rate based on how often your neighbors defaulted on their car loans? That makes even less sense than the mess we have in place currently.
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Mortgages and auto loans do in fact factor in not only your expected ability to repay but also anticipated losses from other borrowers across the loan portfolio who default. And by the way, the prices you pay for insurance are affected by losses from people other than you and prices you pay at a store factor in theft, spoilage and other forms of losses not directly related to you. This can’t seriously be news to you? So yeah, I’d be ok with other borrowers bearing the cost of borrowers who don’t repay just like any other loan.