But I couldn't help but wonder: Why didn't the creditors do this before loaning the city money?
Did they really not come see what shape
Did they really not know the risks? And if they did, why did they loan the city money anyway?
As the layers of
First, the city was broke long before emergency manager
Second, creditors had no problem loaning money to
What institution would loan money to people whose tenuous financial condition might make it impossible for them to pay it back?
Time magazine put it best:
The company, founded by the son of a butcher in 1969, became the largest mortgage lender in the U.S. But its legacy, sadly, is its contribution to the housing bust. Its "all-out embrace of such sales (to under-qualified applicants), Time said, legitimized "the notion that practically any adult could handle a big fat mortgage."
(While some criticized American dreamers who took a chance on buying homes for their families, the
But greed may have clouded their judgment. They should have paid attention to the city's rising debt, declining revenues and population losses. Or were they waiting for this day, for bankruptcy, when they could come and scavenge the city, even suggesting that a nationally renowned museum sell its art to pay them?
It was fine for Judge
I contend that creditors should have taken that real tour before signing on the dotted line. They should have had a better sense of what they were getting then. And they should settle for what they can get now.
And in the future, if a city's finances are in turmoil and its officials ask for a loan: Just say no.
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