The post you are reporting:
The loan of your fiver is not a very good point to begin, it is not a good example to give. Not in terms of the overall situation that has us where we are now.
[this is nothing personal...]
What a fool you are. You lend a fiver and wish to get the fiver back. But, inflation will get in the way. What I am able to purchase for that fiver you will not be able to purchase with it when I give it you back...over one year it may be worth only £4.20, and then again while I have your fiver you have it not.
What further confuses the issue, and what the simplification of terms does not address, is value over worth. (as is partially explained in the letter above)
I think, though, that we can only talk around ourselves and get nowhere...let's try this.
Let me state:the sub-prime borrower is 1% culpable and 110% down on the deal.
The defaulting borrower loses their home, the 'bank' retains the asset. [While I, on handing you back your fiver, by way of a thank you I buy you a pint. I would hope that we would remain friends throughout. ]
All those on the lending side, set their own rules, set their own profit margins and receive their wages and bonuses and by default retain the asset. The gap then consists of the inflated value over worth and the bonuses paid out in expectation of, but not realisation of, profit.
Everybody, the householder and the homeless, pay and pay again to the 'bank' and the borrower yet bears the burden of their original debt.
When it is conceded that a mortgage rate is an entirely fictional and notional amount at the mercy of each and every whim of the lender for whatever purpose and at whatever rate suits the 'suits' then perhaps we can address a general default.
P.S.
What percentage of culpability should these borrowers bear?