Posted on 09/26/2010 7:41:50 AM PDT by Oldeconomybuyer
Nothing like a little class envy to push a liberal agenda... Wealthier Americans aren't going to 'mail back the keys' and lose their good credit rating.
The left hates the middle class - the only reason to try to pit them against those in the upper classes is to undermine the banking system and throw the whole country into chaos. And we all know how Obama would use that disaster...
Okay, out here in CA most of them walk away from a $3000 mortgage payment on a 3 bdrm 2 ba to a $1500 rent payment on a 5 bdrm 3 ba (or something similar...)
Business is business, and if you service a population in need you’ll make money. If you listen to cranks and follow rules from 5-10years before you’ll be broke or miss the opportunity for growth.
If your home doubled in value over a five year period, would you feel the profit was yours? Of course. But you decide if it declines in value you should be able to walk away?
We live in a District that has MUD taxes. I called them to see when they would be paid off for my district and was told that it all depends on how many don’t pay. Redistribution of taxes?
"U.S. homes lost to foreclosures have hit an all time high in August. According to RealtyTrac Inc. the number of home repossessions is up 3 percent from July, bringing the total to 95,364 properties, an increase of 25 percent from August 2009."
"At least 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to RealtyTrac. The firm forecasts that more than 1 million American households are likely to lose their homes to foreclosure in 2010."
"Of more than 25,000 calls from January to June 2010, 41 percent were related to moving. Of those, 77 percent sought help finding an apartment, and two-thirds of those seeking apartments said it was "foreclosure related."
"People are calling us at the point where they don't have alternatives," says ComPsych CEO Richard Chaifetz. "We have sent people with no money to shelters. Their credit is terrible, and we have to buy them time. We've gotten calls from people that have been thrown out on the street, and that's when they call."
Is it "moral" to throw people out of their homes if they can't pay?
“If your home doubled in value over a five year period, would you feel the profit was yours? Of course. But you decide if it declines in value you should be able to walk away?”
The fact that the banks took no risk on contracting the mortgage means that there is NO contract. TARP and gaming mortgage insurance killed any contractual obligation.
The banks could give loans w/o concern of actual value knowing they’d be covered by both receiving 150% of actual value after default. Give loans for properties 3 times the actual value, say 600,000.... the actual value is 200,000... insurance covers 80% of intial loan 480,000... bank walks with pockets full of cash... TARP... and interest payments.
That is one freedom still left. If you want to move am I supposed to judge and/or attempt to stop you? Regardless of your reasons the answer is no. It’s ugly in housing right now in most places.
While the area boomed, people bought or rented houses or rooms, paying whatever the "going rate" was for housing, food, hardware, etc., usually much higher than the "going rate" for the same in less booming areas.
Eventually, the economic viability of the area declined, driving down the "going rate" for everything, and driving out the people who had come there for jobs. Without the jobs, the homes were worthless. No one else came in to buy them at any price. People left town without paying the hotel, the hardware store, the blacksmith, etc., unless they had paid up front.
The government didn't step in to reimburse anyone for their losses. Some people made much money; others made little or none. Then the town went bust. People just left.
Whoever gets the blame for this modern-day, nationwide bust, the results will be the same. People will leave where they can't survive, and go where they might have a better chance. And no amount of additional government interference will squeeze more blood out of a turnip.
Actually, the author is correct. The more money a person has, the more likely they are to walk away from an underwater mortgage. I think it is because they are more like to view it as a simple business deal, and they also have the financial resouces to ride out any temporary credit hit they take.
At the top of the market, Zillow had my home valued a little over $500,000. Today I'd be lucky to get $300,000. I know it's an ugly market - and worse in Florida.
If you lose your job, and can't make the payments, that's different. You are not walking away, the bank is taking it back.
You are spot on!
You didn’t ask how I felt about hanging the bankers (and the dems who passed this corrupt but favorable legislation for them ) by their thumbs for a thousand years...
Why do you think there is the highest rate ever in foreclosures? People are walking away because they can't pay the mortgage. The author is saying that rather than cash in your 401Ks, use your credit card, and borrow from friends and neighbors to hang on to a house you may lose eventually, walk away now so you have some kind of future.
The banks are kicking people out of their houses because a deal is a deal.
That's no longer true. The "Mortgage Forgiveness Debt Relief Act of 2007" excludes such "imputed income" from being taxed. (The exclusion runs through 2012 but may be extended.) And California passed a similar exclusion for state taxes earlier this year. Other states may vary.
So the consequences of a foreclosure or short sale mainly consist of the damage to your credit report. Financially, it can make good sense for someone who is paying two or three thousand dollars a month on an underwater mortgage (and therefore can't refinance to a lower interest rate) to walk away and rent a comparable house at half the cost.
As for the morality of doing so, a mortgage is a "secured" loan, in which a person made a deal with the lender to pay off the loan under the agreed terms or else the lender would repossess the property. Both sides were taking a risk, and both sides accepted the potential consequences (losing the house, and losing money on the loan) if things went bad. Why should we expect the homeowner to have a moral obligation to pay off the loan no matter what, so that the lender doesn't lose money no matter what?
The mortgage lender could have made less risky loans (e.g., required 20% or more equity instead of loaning 100% of inflated appraisals) to borrowers with better credit and adequate assets and income. But instead many lenders offered sub-prime loan deals which they turned around and sold to Fannie May or into the market where the deals were sliced and diced into tranches. Now whoever owns the defaulting mortgage can have the house instead of the loan payments; that's the risk they accepted in hopes of making a higher return than prudent lending would normally justify.
Cite, please.
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