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We were recently in the UK for my nieces wedding and talked about them getting a place to live. They were telling me the banks were prepared to land more than they can reasonably afford to payback.
They thought the banks approach was if they default the banks repossess the house, sells it to clear the debt, any uncleared debt is still owed. The growth in the housing market in the time they were repaying the mortgage and the amount they repaid put the banks on a no lose situation.
Great plan, unless the housing market collapses and the borrowers declare bankrupt on mass.
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