Lender Shares Blame

Regarding Jack M. Guttentag’s Dec. 27 Your Mortgage and Raymond V. Oja’s letter:

Both obviously echo the position of the lenders--that only the borrower is responsible if the property market value drops below the loan balance. And that the borrower should continue to make payments regardless. That position conveniently overlooks a very important consideration in assessing responsibility for an overpriced investment.

When the lender offers a loan amount, the lender is essentially providing the borrower with its appraisal of the property value. The borrower usually relies on that appraisal to reflect the property value, because the lender purports to be the knowledgeable expert.

Therefore, both lender and borrower share responsibility in determining a property value. Since both lender and borrower contributed to the value of the investment, if there is a loss, both should share the loss.

For an equable solution, the lender should rewrite the loan on current market terms or cooperate in a resale. Both lender and borrower would limit their losses. And the lender would certainly improve its public relations.

GLENN BUCHANAN

Sherman Oaks