You are making it sound like the defaulting borrowers were fine until something happened to them. An alternative narrative is that they were never fine. They got loans that they could not even make the first payment on, regardless of how the economy was doing.
I suppose my sassy answer to that is to take it up with Ganong and Noel.
There is an aspect I didn't get into in the post, for brevity. There were some investor buyers by 2007 that were prone to strategic defaults, and that was associated with some of the early rise in defaults in 2007.
For homeowners, I agree that some were never fine. However, I think the main lesson we should take from, for instance, the "All the Devils Are Here" excerpt is that there became a relatively universal gullability about believing implausible things about conditions and motives at the time. Most defaults were triggered by local economic conditions, not affordability.
You are making it sound like the defaulting borrowers were fine until something happened to them. An alternative narrative is that they were never fine. They got loans that they could not even make the first payment on, regardless of how the economy was doing.
I suppose my sassy answer to that is to take it up with Ganong and Noel.
There is an aspect I didn't get into in the post, for brevity. There were some investor buyers by 2007 that were prone to strategic defaults, and that was associated with some of the early rise in defaults in 2007.
For homeowners, I agree that some were never fine. However, I think the main lesson we should take from, for instance, the "All the Devils Are Here" excerpt is that there became a relatively universal gullability about believing implausible things about conditions and motives at the time. Most defaults were triggered by local economic conditions, not affordability.