Wait just here: you have created a problem in perspective. Yes, from the bank's point of view their rate includes a way to cover their losses in general for the number of loans that they cannot recover. But that is nothing like insurance: insurance assumes some outside agency will pay them off for each loan that is incomplete. >From the borrower's perpective, the difference is unimportant: it cannot >matter to the borrower how the money is being used as it is paid back. It is >none of his business what his specific dollars are paying for: he has no more >say in that. His attitude begins and ends with the loan agreement. You can't look at it from both perspectives and decide that the agreement is moot because a term used from one side creates less obligation when you look at it from the other end.
Here's what it seems you are writing: Cars are made to withstand impacts. Car insurance covers the cost of repairing collisions. Not every driver will drive without a collision. Therefore, insured drivers individually do not have any obligation to avoid collisions. Do you see that even though the insurance industry is there to pay for collisions, wanton abuse is not what it is calculating for? That is why the mortgage industry could not cover the inflated pricing of the housing market; they weren't prepared for a change in attitude of the borrower or creditors, and they tried to hide their failure by being childishly clever in 'selling debt.' I still wonder why anyone in the industry actually supported those awful, childish liars. Mitch [from mePad] On Oct 21, 2010, at 8:56 AM, "Dan Minette" <danmine...@att.net> wrote: > Given the fact that a portion of the interest I paid the bank was a premium > to cover the banks loss in case of such a default; why is it dishonorable to > consider that an insurance payment? As Brad pointed out, mortgages interest > rates are calculated to include the probability of default. > > I see your idealism, but that's not how the market works. Defaulting on a > loan has a penalty associated with it; it will be hard to get another loan > in the future, and if one does, it will be at a higher rate _______________________________________________ http://box535.bluehost.com/mailman/listinfo/brin-l_mccmedia.com
