Quote:
Originally Posted by GGG
I agree on rent.
But most debt default is the fault of bad lending decisions. Think about how easy it is to get a loan for anything, credit cards, washing machine, furniture, hot tubs, etc. These loans are made on having x amount default. And Visa makes interest money up until the point of default.
I think the current debt model relies on people making bad choices so we shouldn't heavily penalize them for doing what the system has designed for them to do. So in general the creditor shouldn't be lending out money to people who have a high likelihood of defaulting. Instead we have creditors pursuing high risk people to get them hooked taking as much out of them until they default.
Just look at the pay day loan industry
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I guess I'm not talking about credit cards or retail debt. I'm mostly considering secondary market lending. There are so many lending scenarios that allow for fraud. Generally speaking borrowers are allowed to defraud lenders and unless there are millions of dollars and more importantly multiple victims the police will not ever pursue it. They will admit fully that a crime has been committed but there is no way they will chase anthing less than a massive multi million dollar fraud.
I was in the payday loan business for three years and if anything, it is a good indication of what it takes to provide unsecured loans. When First Calgary says they will provide the same service for 12%, they fully understand they will lose money doing so. They're just playing nice at the request of the government.