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They Bailed On Their Homes -Now They Want Back In
CNBC ^ | 2.22.13 | Diana Olick

Posted on 02/22/2013 1:12:45 PM PST by ExxonPatrolUs

Home sales are slowly climbing back, thanks to investor demand, improving consumer confidence in housing, and the surprising return of former homeowners who once walked away from their commitments.

These so-called, "strategic defaulters," some of them investors and some owner-occupants, are coming back to the market, despite damaged credit, and apparently the market is welcoming them back.

(snip)

Crashing home prices and sketchy mortgage products caused millions of Americans to default on their loans and eventually lose their homes. For some, it was a tragic fight to the end to keep their single investment; for others it was a conscious decision to walk away from their mortgage commitments, given the real fact that they would likely not see home equity again for many years to come.

Some saw this as morally reprehensible, others as a sensible business decision.

(Excerpt) Read more at m.cnbc.com ...


TOPICS: Business/Economy; News/Current Events
KEYWORDS: homesales; housingindustry; mortgage; mortgagedefaults

1 posted on 02/22/2013 1:12:48 PM PST by ExxonPatrolUs
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To: ExxonPatrolUs
"We want people to know that it's possible and, in a lot of cases, it's advantageous," says Jon Maddux, former CEO and co-founder of YouWalkAway.com.

Playing by the rules is for suckers.

I owe you money? [shrug] Why should I pay my debt? I'll just walk away and borrow more money next year. It's cool, bro. I can play this game my whole life and never actually adhere to fiscal conventions. The government will always bail me out. And why? Why will the government always rescue me? Because I am nonproductive and a loser. That's why I get special treatment.

You productive, tax-paying, law-abiding citizens -- what fools you are!

2 posted on 02/22/2013 1:21:31 PM PST by ClearCase_guy (Nothing will change until after the war.)
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To: ExxonPatrolUs
Some saw this as morally reprehensible, others as a sensible business decision.

The business deal was: pay your mortgage on time, or we repossess the house. I don't see how intentionally letting the bank (mortgage holder) to repossess is morally reprehensible.

3 posted on 02/22/2013 1:28:11 PM PST by kevkrom (If a wise man has an argument with a foolish man, the fool only rages or laughs...)
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To: ClearCase_guy
You productive, tax-paying, law-abiding citizens -- what fools you are!

It's so damned disheartening, isn't it? I think they're trying to beat us down and make us give in, but I won't do it. I know right from wrong and I won't let obama or any of his corporate cronies tell me otherwise.

4 posted on 02/22/2013 1:28:42 PM PST by pgkdan ( "Those who hammer their guns into plows will plow for those who do not." ~Thomas Jefferson)
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To: ExxonPatrolUs
I wnder if there are any demographic trends at play here.

After all, such an unfair, oppressive country has alot of making up to do.

5 posted on 02/22/2013 1:29:25 PM PST by skeeter
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To: ClearCase_guy

I know of a family here who allowed their large, high-end home to be re-possessed. But before they were evicted, they bought another using all cash and added a wing. To add insult to injury, they trashed the house where they were foreclosed and removed EVERYTHING of any value from it.

The new wing is for her parents (Dutch) who take care of the children. She is a doctor (psychiatrist) — I don’t know what he does. I just think it is unconscionable.


6 posted on 02/22/2013 1:30:04 PM PST by afraidfortherepublic
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To: ClearCase_guy
You productive, tax-paying, law-abiding citizens -- what fools you are!

It sure feels like we are being played for SAPS!

7 posted on 02/22/2013 1:34:49 PM PST by mylife (The Roar Of The Masses Could Be Farts)
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To: kevkrom
Organized crime used to make business deals like that all the time. Drug dealers and others of that ilk probably still do. I guess morality depends on one's point of view.
8 posted on 02/22/2013 1:46:35 PM PST by hinckley buzzard
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To: kevkrom
The business deal was: pay your mortgage on time, or we repossess the house. I don't see how intentionally letting the bank (mortgage holder) to repossess is morally reprehensible.

Because the deal was made with both side intending on completing the arrangement. Both sides know that defaulting is highly disadvantageous for the lender, which is why the borrower's credit takes a huge hit for allowing it to happen. Those who default intentionally are intentionally harming the bank, and harming the rest of us borrowers, since the bank has to make it up by raising fees and percentages against their other borrowers.

Anyone who fails to see immorality in intentionally raising costs on others while shirking on their own promises clearly has no morality of their own.

Hint: A moral code guides one to live a good life where they minimize harm to others. Harming the bank, and their customers, AND expecting to re-enter the home afterwards, clearly show a very immoral person... whether the rules allow it or not.

9 posted on 02/22/2013 1:55:06 PM PST by Teacher317 ('Tis time to fear when tyrants seem to kiss.)
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To: ExxonPatrolUs

It’s a straight up business decision. A company with a commercial lease or mortgage-like arrangement, if it’s losing money, would walk away from it if it made financial sense to do so. There’s nothing wrong with it - both parties entered into the transaction knowing there was a risk of default.

The “rule” is you either pay your mortgage, or breach and pay the consequences from that.


10 posted on 02/22/2013 1:55:42 PM PST by socalgop
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To: kevkrom

Yep. You nailed it there.


11 posted on 02/22/2013 1:56:03 PM PST by rlmorel (1793 French Jacobins and 2012 American Liberals have a lot in common.)
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To: socalgop

Yeah. Except there appear to not only be no consequences for defaulting, but various entities encouraging them to be welcomed back with open arms.


12 posted on 02/22/2013 1:58:39 PM PST by rlmorel (1793 French Jacobins and 2012 American Liberals have a lot in common.)
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To: ExxonPatrolUs
The several mortgages that I've had (the most recent one being in the 80’s) all required 20% down,a full credit history check,income confirmation by employers,etc.That was SOP.
13 posted on 02/22/2013 2:03:59 PM PST by Gay State Conservative ("Progressives" toss the word "racist" around like chimps toss their feces)
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To: Teacher317
"...Harming the bank, and their customers, AND expecting to re-enter the home afterwards, clearly show a very immoral person..."

Yes. IMMORAL. And this doesn't even mention the harm this does to those good, responsible citizens and neighbors who did it right, paid their bills, and saw their property values damaged because the abandoned houses next to them turned into vandalized eyesores.

This isn't about people who COULDN'T do make their payments. It is about SCUMBAGS who COULD, and decided to screw everyone around them and piss in the water upstream of them.

To those a-holes, it is all about ME-ME-ME.

14 posted on 02/22/2013 2:05:03 PM PST by rlmorel (1793 French Jacobins and 2012 American Liberals have a lot in common.)
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To: ExxonPatrolUs

There is nothing as good for the economy as giving new loans to people who defaulted on the old ones.

Huh????????


15 posted on 02/22/2013 2:05:32 PM PST by Venturer
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To: kevkrom

No, the deal was “Pay your mortgage on time”, not “Pay your mortgage on time, unless the property decreases in value”.

The “strategic defaulters” want the lender to eat the loss on declining asset value, but there’s not a chance in hell they would have shared the appreciation with the lender had the house continued to appreciate.

“Heads I win, tails you lose” - that’s morally acceptable?


16 posted on 02/22/2013 2:07:47 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: kevkrom

I don’t see how intentionally letting the bank (mortgage holder) to repossess is morally reprehensible.
*************************************************
The Mortgage Bankers Assn. agrees with you , they defaulted intentionally on their newly constructed Washington D.C. headquarters ... http://online.wsj.com/article/SB10001424052748704829704575049111428912890.html stiffed the lender for a cool $38,000,000.00


17 posted on 02/22/2013 2:20:25 PM PST by Neidermeyer (I used to be disgusted , now I'm just amused.)
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To: DuncanWaring

Please see post #17 , it is PERFECTLY ACCEPTABLE to the trade group involved , the Mortgage Bankers Association.

“...there’s not a chance in hell they would have shared the appreciation with the lender had the house continued to appreciate.”

If you feel bad about having positive equity in your property you can write me a check for half and I’ll give you a nice thank you note since you seem to disapprove of accumulating wealth.


18 posted on 02/22/2013 2:27:34 PM PST by Neidermeyer (I used to be disgusted , now I'm just amused.)
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To: ExxonPatrolUs

I just refinanced a 30 year note at 2.7% with only 5 years into the house. Dropped my payments by $1000.00

you read that right, $1000.00


19 posted on 02/22/2013 2:28:24 PM PST by Hammerhead
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To: Neidermeyer

I have no problem with accumulating wealth, moron.

I have a problem with people who want to capture all the benefits in a potentially risky situation while taking the risk out of someone else’s hide.


20 posted on 02/22/2013 2:31:19 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: ExxonPatrolUs
At least to me, a promise to repay a loan in good faith is a promise. The fact that a penalty is specified for failure to repay does not release me from my promise if I strategically decide that I'm better off breaking my word.

A far bigger issue though is the federal government intervention in the transaction. When my tax dollars are used to subsidize real estate speculation, I get irritated. Homeowners and lenders who gambled and lost should absorb the entire loss on their own. Absorbing my tax dollars instead is stealing - and it is evil.

21 posted on 02/22/2013 2:55:35 PM PST by Pollster1
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To: Teacher317

Well said!


22 posted on 02/22/2013 3:08:21 PM PST by Bigg Red (Restore us, O God of hosts; let your face shine, that we may be saved! -Ps80)
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To: DuncanWaring
The “strategic defaulters” want the lender to eat the loss on declining asset value, but there’s not a chance in hell they would have shared the appreciation with the lender had the house continued to appreciate.

Hardly.

Those banks have been collecting payments with interest while receiving near ZERO interest government money from the Fed. Why should they not "have some skin" in the losses just like the underwater sap who has already lost their life savings from the crash?

23 posted on 02/22/2013 3:11:36 PM PST by AmusedBystander (The philosophy of the school room in one generation will be the philosophy of government in the next)
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To: kevkrom

The deal was that the bank loans you money and you pay it back. The house just happened to be collateral for your obligation. If the house doesn’t satisfy the debt, they still owe.

Those people that walked away gave their word that they would pay back the money they borrowed. They didn’t. They broke their word. That’s the end of the story. You may not consider breaking your word to be morally reprehensible, but a lot of us still do.


24 posted on 02/22/2013 3:20:58 PM PST by Publius Valerius
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To: Hammerhead

A 30 year note at 2.7? Who is your bank?


25 posted on 02/22/2013 3:23:30 PM PST by Publius Valerius
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People on here should get off their high horse.

Governments deeply in debt are serviced by the banks.

The little guy deserves the same consideration. If the most powerful people on the planet don’t have to play by the rules, why should we?

Rules are made to be broken.


26 posted on 02/22/2013 3:10:24 PM PST by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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The underwater sap who already lost his life savings in the crash is not a “strategic defaulter”.

This discussion is about strategic defaulters.


27 posted on 02/22/2013 3:26:47 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: DuncanWaring

Look at the biggest “strategic defaulter” on the planet - the US government.

There are a long list of people behind it. The banks have to do business with them because the economy is going to suck for a long time.


28 posted on 02/22/2013 4:14:06 PM PST by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: goldstategop
If the most powerful people on the planet don’t have to play by the rules, why should we?

If you don't care about your credit rating, go for it. Also, the short sale forgiveness exemption on primary residences expired at the end of last year.

29 posted on 02/23/2013 4:51:28 AM PST by EVO X
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To: Teacher317

No, sorry, can’t see it that way. It’s a business deal, not a moral pledge. If with party feels its more advantageous to break the contract and accept the penalty for doing so, they’re perfectly free to do so.

If the banks weren’t getting adequate collateral for the loans they issued, that’s their problem, not the borrower’s. I find their lending practices more irresponsible and morally reprehensible than people who make a rational decision to make their best financial move.


30 posted on 02/23/2013 3:02:36 PM PST by kevkrom (If a wise man has an argument with a foolish man, the fool only rages or laughs...)
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To: Teacher317

No, sorry, can’t see it that way. It’s a business deal, not a moral pledge. If with party feels its more advantageous to break the contract and accept the penalty for doing so, they’re perfectly free to do so.

If the banks weren’t getting adequate collateral for the loans they issued, that’s their problem, not the borrower’s. I find their lending practices more irresponsible and morally reprehensible than people who make a rational decision to make their best financial move.


31 posted on 02/23/2013 3:02:53 PM PST by kevkrom (If a wise man has an argument with a foolish man, the fool only rages or laughs...)
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