On 2008-03-24, Hawke wrote:

That's exactly why there is a long standing recommendation to limit
mortgage payment to a small fraction of one's income.

So it doesn't make much sense to say these people knew what the
risks were. No one else did, either.

But they were obviously imprudent. As were the lenders.

Looks like there was plenty of investors who bought mortgage loans
containing those crap loans, who did not even bother to think about
their quality.

i

Why would you worry about quality if you thought they would only continue to
go up? Apparently, the idea that they could actually decline never occurred
to any of them.


The recommendation to not borrow too much, has little to do with home
values and everything to do with dealing with emergencies, loss of
income, etc.

The home prices can go up and you can still lose your home to a
foreclosure.

i