umm, pardon FReeping me, but whether it "makes sense" after the fact or not is quite irrelevant. Joe ought to meet his obligations. Since when was that optional? Just couldnt get past this part of the article; it's bound to be shot through with more foolish premises after a beginning like this.
“...whether it “makes sense” after the fact or not is quite irrelevant. Joe ought to meet his obligations. Since when was that optional? Just couldnt get past this part of the article; it’s bound to be shot through with more foolish premises after a beginning like this.”
I merely posed “the question” facing many Americans today. I didn’t suggest that they should walk away from their obligations. The federal government would be making principal payments on its debt if it were meeting its obligations, and I am meeting mine despite being upside down, so don’t talk to me about FReeping obligations.
“...whether it “makes sense” after the fact or not is quite irrelevant. Joe ought to meet his obligations. Since when was that optional? Just couldnt get past this part of the article; it’s bound to be shot through with more foolish premises after a beginning like this.”
I merely posed “the question” facing many Americans today. I didn’t suggest that they should walk away from their obligations. The federal government would be making principal payments on its debt if it were meeting its obligations, and I am meeting mine despite being upside down, so don’t talk to me about FReeping obligations.
That became “optional” as you call it when he discovered he was being scammed.
These houses are not “dropping in value”.
Rather, the price they can bring in a sale is dropping to the actual value.
Before the laws were changed during the Carter presidency, the appraisal process required that home values be indexed against the local median income, housing supply, and population density. This insured that federally insured loans were not made for sums vastly greater than the home might bring if sold relatively quickly. The Carter administration got all that pesky math waived in favor of the current system of just seeing what similar homes have recently sold for. I don’t think those who proposed this were unaware of where it would lead.
I have been explaining all this for nearly ten years now. We have a ten to fifteen year oversupply of homes.
I knew this, and absolutely the banking and apprasal industries - at the top and middle management knew. Home buyers, not so much.
You can stop crying crocodile tears about how these people are being unfair to the banks.
Search the keyword “housing bubble” and go back as many years as you like. This didn’t happen out of the blue and the formation of the failed MERS shell game shows the banks were grasping at straws for a way out before the wave broke.
If he's in a non-recourse state, he IS meeting his obligations. He promised to either pay back the mortgage, OR turn over the house in foreclosure, and paid a modest premium compared to what he would have paid in a recourse state. The bank has the choice to foreclose any time they like, and when they do, the terms of the contract will have been fulfilled.