Replies

Strategic foreclosiures have nothing to do with subprime borrowers or easy money. These are buyers who qualified & could afford their loans. Now the loss of equity is so steep, in some places well over $100K, with no chance of recovery in the near future, ie 5 yrs. If we can stop being so judgemental, consider if it’s wise to squander more money & your kids’ money throwing good money literally after bad.

So what you're saying is we should socialize the individual's loss and spread the debt around through increased bank fees, loss of interest on CDs and account held by other bank customers and loss to the share holders because it wasn't the homeowner's fault...they were victims? I'm just trying to wrap my head around it.

So what you're saying is we should socialize the individual's loss and spread the debt around through increased bank fees, loss of interest on CDs and account held by other bank customers and loss to the share holders because it wasn't the homeowner's fault...they were victims? I'm just trying to wrap my head around it.

You have seen the effect with mortgage originators tightening underwriting standards. The only place you can get a low down loan now is through the FHA or VA. Whether it is immoral or not, people are doing this. Since BK laws were reformed, people who are responsible in paying their obligation pay for the losses creditors suffer when individuals file for bankruptcy. Society through its legislature decides how losses from people who cannot or will not pay will be distributed. Back in Victorian England you could be thrown into debtors' prison until your debts were cleared. Society thought this was too severe a punishment so BK laws were reformed essentially shifting the costs to society at large.

Amazing, isn’t it? Heck, we have lost equity in our house (we moved to FL during the boom, not quite the top but certainly on the way up). However, unless we hit a point where for some reason we cannot pay (I don’t expect that to happen, but I suppose something unforseen could happen) we will continue to pay our mortgage payments. We seem to be the sort of idiots other people rely on to take up the slack.