50-year mortgages and the impact on consumers and the economy

"The danger, of course, is that when debt feels cheap and the horizon looks endless, people convince themselves the rules don't apply to them. I watched that mindset take hold once before. In 2005, we went out to dinner with my wife's hairdresser and her handyman husband. In the car, he told us that he purchased four homes to flip. I later went to list a home at a ritzy country club."

"Having survived through the Big Short market, I saw firsthand how consumers, if given the chance at free money, will take it even to their own detriment. That market, and the free money with it, caused ghastly harm to the economy. I had hundreds of people doing short sales with the fantasy of getting free from their ball-and-chain house and into a rental. Dodd-Frank corrected much of that. People will choose to save a few hundred dollars and"

Cheap, extended mortgage horizons encourage reckless borrowing and consumer harm. The 50-year mortgage operates as a gimmick likely to damage consumers and possibly the economy by making debt feel inexpensive and limitless. Speculative home flips, unrealistic profit expectations, and buyers ignoring carrying costs contributed to a South Florida real estate depression from 2006 to 2014. Many homeowners pursued short sales to escape mortgages, amplifying economic damage. Regulatory responses such as Dodd-Frank reduced predatory lending and excessive risk-taking. Consumers often favor small short-term savings over long-term financial prudence, increasing vulnerability to debt cycles.

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