Bank: oooh you don't have one of our special cards that rewards you for spending money that's not really yours. You can't buy any house at all.
18yo: I don't have one either, can I take out $250k for school and spend some of it on alcohol and parties?
Bank: Sure!
The way it works is that when you don't pay it off either
1. your spawn pays it off or
2. They sell your debt to a collector
they get profit either way
I don't know where you all live, but in the uk the bank won't give you a mortgage if they don't think you'll pay it off before you retire. Even with an interest only mortgage you have to prove how you're going to pay the rest when your mortgage finishes i.e. inheritance or selling the house.
just watch The Big Short. You'll see what we did. It was MESSED up. And yes WE did it; we elected the politicians that enabled this in the first place.
Spoiler Alert: all we did to fix it was rename stuff.
One sweet deal with the housing market collapse was the banks rubber stamping sales of $250-400k houses for $8k. The banks got the 8k from the buyer and the balance from Uncle Sam. This happened for two years before it was stopped. The government still is not sure of the actual cost of the bailouts. Not one piece of legislation has been passed to regulate the banks or wall street to keep it from happening again. I dont particularly care for the government to be involved in most shit, but we could have gone over the cliff on that one. Economic Apacolyspe could have happened. Just think if everyone lost faith in the value of paper money, no food, gas, running water, electricity ect.
18yo: I don't have one either, can I take out $250k for school and spend some of it on alcohol and parties?
Bank: Sure!
1. your spawn pays it off or
2. They sell your debt to a collector
they get profit either way
Spoiler Alert: all we did to fix it was rename stuff.