The government can only sustain the valuable borrower options by providing subsidies to borrowers who exploit them; even if recourse loans were banned, the rate on non-recourse loans would be higher in a working market, and low-down-payment purchases (under 10% down) would carry a high interest-rate penalty that would discourage them.
causalpending
Speaker
Arnold KlingEvidence Quote
“the interest rate on these non-recourse loans would be higher if the market were working and in particular it would be much higher on loans with low down payments”
Created: 6/13/2026, 7:04:06 PM
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