|The Declarer (Floyd McWilliams' Blog)|
Sunday, January 04, 2004
Here is an example, from today's San Jose Mercury News:
Earthquakes kill a thousand times more people in Turkey or Iran than America because America is a wealthy country with secure property rights. When a home is constructed in America, it will be sold to someone who views his dwelling as a significant long-term investment. Furthermore the house is likely to be financed by a decades-long mortgage. Of course houses (and office buildings) are going to be constructed earthquake-safe. Why would anyone spend half a million dollars for a California lot, and then another several hundred thousand dollars to construct a dwelling, without taking some basic and relatively inexpensive precautions to make sure that the structure will still be standing when the next big earthquake comes along? Why would a mortgage financier lend a huge sum of money to a home buyer without making sure that the collateral is secure?
I was reminded of this just a few weeks ago, when my mortgage company CitiMortgage did not receive my home insurance renewal because of a clerical error. CitiMortgage promptly informed me that if I did not renew my insurance, I would be purchasing insurance from them.