Switch the general public and banks round to 30/20 respectively and i'd agree with that.
It is the responisbility of the banks to tell the borrower what their repayments will be, how they will change during the term of the loan and what the consequences will be if they don't keep up repayments and financial advisers do this (or in the case of a credit card application it's written in on the form).
Banks can't be expected to know every last detail of a persons finances now or in the future, they have to rely on application forms being filled in honsestly and that the applicant has read and understood everything on the application form (including the small print) when they sign on the dotted line, and lets be honest, lots of people will stretch the truth when it comes to filling out loan applications to get that car, house or the holiday they want.
Where banks went wrong was 3.5X+ 100% and even 125% mortgages but they were only doing their job in competing with the rest of the high street, keeping their share holders happy and keeping the government happy. Regulation or lack of it failed there.
Originally Posted by WWW
Most people live under rocks then. Think how thick the average UK citizen actually it. Then consider that half the population is thicker than that.
I should have written
If anyone hasn't heard about CDSs or CDOs by now even if it isn't by name they'd have to have been living under a rock. I hadn't heard of them until a few months ago but they should have had significant coverage on the media by now for all but the most reclusive of recluses not to have heard of them. (well maybe not Sun readers).