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Higher population growth and shorter retirements require less saving; older populations more.For America, the required stock of savings equalled -228% of GDP in 1970: households should have been borrowers rather than savers since their relative youth and lower life expectancy meant they had ample future income to repay their debts and finance retirement.
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Households, in other words, ought to have been big borrowers rather than savers since the population was generally young, life expectancies were lower than at present, and future income was expected to grow rapidly.
Instead, they have been allowing borrowers to delay their repayments.
The someone might have been a borrower who was not qualified, or another player in the financial field like a hedge fund or a mortgage originator.
Critics of these practices say many of these mortgages should never have been made because borrowers could not repay them.
As the real estate market continues its slow recovery, land prices have been rising, enabling borrowers to pay back their construction loans or refinance.
Mr. Weinstein has found that his own development projects have been fueled by borrowers who share his views: first-time buyers and baby boomers.
Now that the lenders are suddenly in trouble and credit standards have been tightened, those borrowers cannot refinance into higher quality, more affordable loans.
While low rates have been great for borrowers, they haven't been so great for savers.
The law says that, in cases where usurious interest rates have been applied, the borrower need repay only the principal.
Borrowers have been denied choice.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com