If I'm a bank, and you come to me for a $75k mortgage on a $100k house, the $25k down is my security. That should be the beginning and end of our transaction.
If you stop paying the mortgage, the bank gets the house. If the bank reasonably believed there was a chance of the house being worth less than the amount borrowed during the term, they shouldn't have made the deal.
It's a simple system that makes perfect sense. Holding people to account beyond the security, as they do in the UK, encourages predatory lending behaviours and is utterly unfair to the borrower.
In the occasion you stop paying, the bank will foreclose the house, but YOU are still liable for the rest of the loan. If you still don't pay, an official collection agency (not your bank, that would be a conflict of interest) will try to cut a deal, come and take your stuff and/or garnish your wages to pay of the loan. You can insure yourself against calamities like divorce and losing your job, for which the bank will give you a discount on the interest rate.
Mortgages are limited by what you can afford, so a predatory mortgage loan is practically an oxymoron.
Down payments are uncommon, especially for a first time buyer. The only money you need to bring with you is transaction costs (~5% : taxes, notary, financial advisor, etc.) and whatever you think you need for decorating.
I've tried to convince people for years that the biggest cause of the 2008 crash wasn't the banks, it was the rating agencies, but that's more complicated than people want to get with it.
It's a lot easier to just believe that "the system" is "rigged" and "out to get you".
In the UK, people should've known they couldn't repay their mortgage if they got in trouble, and it's why I continued renting until 2013.
In the US, I'd have happily bought a house with 0% down and no obligation if it goes against me.
FWIW I'm not aware of many people who come down with a cold and are financially ruined. The people I know who are in crippling medical debt have, for example, had both kidneys replaced. While I'm not happy they are in those circumstances, it's not hard to picture two replacement kidneys and all the other treatments involved as mind-bendingly expensive.
It seems worthwhile to distinguish, at least a little bit, severity when we are talking about this.
That's nuts in 2018 in a wealthy democracy.
Think about how cuba is able to have similar life expectancy, etc at a fraction of the cost with chronic shortages and subpar sanitation. Most likely there are many medical procedures doing at best nothing for the patient except draining their wallets.
Worse, it could be that treatment 1 for problem A causes problem B which leads to treatment 2, etc, etc for some moderate benefit at great cost over just dealing with problem A.
Worst, it could be the medical treatments are having a net negative effect on people's health. Eg, those studies that estimate hospital errors (not even just death from dangerous treatments applied as standard) are the third leading cause of death in the US.
I suspect most of the US' problems is the atrocious lifestyle most live; overeating and under-exercising are literally a lethal combination.
I would post a pubmed link but sorry, youll have to just try it yourself and read blogs because the medical researchers still haven't caught up to this. They are still calling a 30% carb diet "low carb".
Treating complex conditions (like cancer) is exactly where the US excels, compared to other countries. Yes, it's expensive, but the alternative is, well, dying.
Since the grandparent mentioned the UK specifically, I'll point out that the US has dramatically higher survival rates for treatable forms of cancer than the UK does. For prostate cancer - generally one of the most treatable forms of cancer, if treated properly - people in the US have over a 90% chance of survival[0]. The UK, on the other hand, has absolutely abysmal surival rates - second-worst of all OECD countries, and a mortality-to-incidence ratio that's almost twice what you see in the US.
Yes, the US could do a better job at making that top-of-the-line care accessible to more people, but even then, the baseline care for complex treatments specifically is actually much higher than what the UK provides.
[0] That's over the entire population, so it's including people who are uninsured and can't afford the most expensive treatments.
Perhaps there is a tradeoff between treatment of complex conditions, and treatment of more frequent but less complex conditions?
However I am specifically a proponent of voluntary collectives for things, as government forced cooperation seems suboptimal and fragile to me.
Isn't this the exact thing insurance solves, in particular catastrophic coverage insurance? Nobody really gets "ruined" by paying out of pocket for one X-ray and two aspirin.
The problem is that the insurance is so expensive some people can't afford it. But the only sense in which single payer would "fix" the high cost/overhead/waste problem is by de facto regulating prices, which can be done even without it but which has a lot of obvious problems -- if the regulator chooses too high a price then it's still wasteful/unaffordable but too low and there will be no providers (or the providers will sacrifice quality to hit the regulated price).
What we need is a real solution to cost disease, which probably has something to do with reducing the regulatory compliance costs so there will be less overhead and more viable competing providers, requiring price transparency from providers, and then having people pay out of pocket for all non-catastrophic care so the patient has the incentive to decline treatment or find a less expensive provider when the treatment is unnecessary or overpriced.
This is why there are regulations to ensure a minimum standard of care. Above that, the provider is the one who has to convince the patient that their service provides some benefit over the lowest cost provider.
And isn't voluntary collective healthcare just another way to describe private insurance companies, especially HMO's?
Chapter 7 bankruptcy (?) is probably the only way forward for most folks after a certain point.
I’m not sure what I’d do if I was presented with a $150k bill for snake bite. https://www.wideopencountry.com/actual-cost-rattlesnake-bite...
I’m fairly sure the US health system is broken, https://www.washingtonpost.com/news/wonk/wp/2015/09/09/the-c...
The prices aren’t even related to cost of materials or time or even linked to inflation. Maybe patents or research costs are included, maybe not. It’s all a game between hospitals and financial companies.
Sort of like student loans...
This is the advice I've heard given to people who are severely underwater on a mortgage, but the idea that you can get sick one time and be financially ruined is still astonishing to me.
I guess everywhere has some legislation that is just bonkers, though. I only just recently found out from a friend that you can't legally walk away from a mortgage here (UK) without declaring bankruptcy like you can in the States, which is bananas.