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The Tuesday Podcast: Discipline And Forgiveness

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The Tuesday Podcast: Discipline And Forgiveness

Housing

The Tuesday Podcast: Discipline And Forgiveness

The Tuesday Podcast: Discipline And Forgiveness

  • Download
  • <iframe src="https://www.npr.org/player/embed/134168778/134179117" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Joe Raedle/Getty Images

In Spain, if you don't pay your mortgage, the bank can come after you for everything — your car, your wages, whatever.

In many parts of the U.S., it's not like that. If you don't pay your mortgage, the bank can take the house back, but that's it.

On today's podcast, we ask: Which system is better?

The Spanish system gives people a stronger incentive to keep paying the mortgage.

Both Spain and the U.S. had major real estate busts. But at the end of last year, only 3 percent of people with mortgages in Spain were 30 to 90 days behind on their payments, compared with 10 percent in the U.S.

But the U.S. system makes it easier for people to start over, and to keep their financial lives going. Our financial system is set up to embrace failure. And in the long run, that may be good for economic growth.

For more: Read our post, "When Borrowers Don't Pay, Should The Bank Take Everything?"

Subscribe to the podcast. Alanis Morisette's "Forgiven." Find us: Twitter/ Facebook.

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