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Originally Posted by piercehawkeye45
Then, how would this effect our credit system if banks do not trust the majority of people to take out house loans, sacrificing potential profits?
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The banks won't really be sacrificing profits in this case, because the number of actual houses/loans has not changed. Instead of giving 10 loans to 10 families, the bank is giving 10 loans to your one friend, and he is collecting rent from the 10 families. They are still collecting the same amount of total interest from your rich friend. Things only get bad for the bank (and for your friend too, incidentally) when houses start going empty--because single people start consolidating into roommate situations, unemployed people move back in with relatives, college-age kids decide not to move out into their own apartment after all, etc.