Posted on 05/31/2010 12:22:29 PM PDT by Lorianne
Its called self-preservation. Humans have been doing it for thousands of years. When the system fails and the people get looted out of thier Taxes, IRA’s, Home Values, and Job Market. Time to look out for oneself!
Including abortion? Just askin'.
When we went to sign papers, it was totally different than the good faith estimate we had originally seen but wanting a home for our family - we figured we could refi the 80/20 ARM loan and everything would be okay.
We NEVER refinanced the loan and took out money for bills/fun stuff - we did refi trying to get into a better loan while keeping our payments low and by the time everything was said and we owed $270,000 on a house that eventually was worth $140,000.
My husband and I worried ourselves sick as the ARM came closer to adjusting. Sick. There were nights I laid awake terrified wondering what was going to happen to our family. We tried a loan mod and Countrywide offered us a monthly payment that was $500 more than what we were paying each month.
Feeling like there was nothing left for us to do - we walked. That was two years ago. Our house just went up for auction last week. It has been the most frightening and embarrassing situation of my life - I totally understand what you're going through.
Nothing is ever black and white and not everyone who chooses this is the s**t at the bottom of your shoes. We made a mistake and believe me we have learned a huge lesson from it but ultimately, it was the best decision for our family.
The banks want the house as a guarantee, they got exactly what was contracted.
hypocrite:
-noun
1. a person who pretends to have virtues, moral or religious beliefs, principles, etc., that he or she does not actually possess, esp. a person whose actions belie stated beliefs.
2. a person who feigns some desirable or publicly approved attitude, esp. one whose private life, opinions, or statements belie his or her public statements.
If the shoe fits...
Why are you not crying for a deficiency judgment aimed at Morgan Stanley. How about a 1099-C?
What say you about Morgan Stanley’s $10 Billion Bailout?
Ha Ha...what a joke!
I didn't say it wasn't.....
.....I only pointed out a few macroscopic results of such activity.
I'm not letting the banks off the hook, I am only saying this activity hurts everybody.
Therefore, what I said is not "hogwash".
What our economy needs more than anything else is for housing and housing backed assets to be deleveraged back to their pricing fundamentals.
We needed this in 2006, we needed it in 2008, and we need it today, despite the frantic efforts of both Democrats and Republicans to pump more helium into the shrinking bubble.
I frankly think walkaways are good for this process. Better that a bank get the house back and sell it at $200,000 to a willing buyer with a down payment, than keep a $400,000 Monopoly money mortgage on its books. The latter does nothing to help re-establish property values on a free market basis.
I didn't say anything to the contrary.
All I said is, this isn't good for anybody.
No, he gave them whatever payments he had made to date AND gave them the house. IF the contract truly says, "Hey, pay us the full amount, or give us the house back and lose all the money you've paid in so far," I don't have a problem with that.
“There’s nothing at all unethical or immoral about standing on one’s rights. “
They should never be allowed to borrow another cent in their lives!
Just for the record, I’m not arguing that the banks didn’t act badly. They acted very badly actually... They shouldn’t have been bailed out and they should bear the consequences of their actions. That’s the only way they will act responsibly in the future.
What I am saying is, people who purchased something where they thought the price was worth it should stick to their obligations as long as they have the means to do so. Just because its “value” went down doesn’t change the monthly payment they agreed to pay or their means to make that monthly payment.
Sinking house prices are a "problem" in the same way as one's body temperature "sinking" from 103.5 to 98.8 degrees is a "problem". It's a natural correction to an insanely overheated market.
And as part of being old-fashioned, you’ll also not take on debt you cannot repay. That goes hand-in-hand with your attitude on having a personal obligation to repay your loans.
You also wouldn’t take on excessive debt if the bank were waving “no-doc” loan papers under your nose either, right? Even if the person waving them were a cute blond with a 36-C chest in a fluffy pink sweater with a plunge neckline?
Of course not. We’re immune to such nonsense when taking out a loan.
We’re also in the smallest of numerical minorities in the US now.
The bankers constructed carefully programmed risk models based on people with our type of thinking, ie, we repay our notes, but then again, we take on only that debt which we can repay. Additionally, the statistics used in constructing these models included default rates from people who put down 20% on a purchase, lived in stable two-parent households, etc.
These models were constructed with lots of pre-2000 data, but *applied* to the grifter culture that has arisen since the late 90’s, onto loans made to people who lied about their incomes, their other debts, or simply were never asked to reveal these issues at all. The loans were then packaged, sliced and diced with more mathematical assumptions and models - starting with one that substantial real estate price declines were only regional in nature, that they didn’t happen nation-wide at the same time... (look up “gaussian copula” for some of the theory behind this idea), rated “AAA” by ratings agencies using similar models to the one above (ie, based on people like you and me) and sold off to unsuspecting marks around the planet.
Why?
Because some sharp Harvard MBA’s (both in and out of government) decided that if they made loans to ONLY those people who repay them, like you and me, there wouldn’t be much of a housing market. There would be no housing boom. Because we don’t re-fi every other year, there’s be no steady stream of RMBS paper to sell into the debt markets. There would never have been all those jobs for mortgage brokers, and appraisers giving out phony price estimates in absurdly inflated markets. There wouldn’t have been ANY job growth following the 2002-2003 recession (if you go back and take out the housing boom, there was almost no job growth during the Bush administration).
And so on.
If it is a non-recourse loan, a borrower who returns the property to the lender in good condition rather than continuing to make payments if fulfilling the terms of his contract.
If fact, the Constitution entitles all parties to the benefits of their contracts. If it is more beneficial to return the property to the lender than continuing to make payments on a significantly upsidedown mortgage, the wise financial decision may be to do exactly that.
People should not be so emotionally attached to relatively simple financial decisions THAT ARE IN COMPLIANCE WITH THEIR CONTRACT.
Try to keep up DB. I read that one already.
I’m talking about this one.
I await keenly for your good “Old Fashioned” explanation of how the Morgan Stanley situation differs from the family in CA.
(You can have a free pass on the $10 Billion Bailout ...we’ll just skip that part ok?)
What the hell is that TBTB alphabet soup crap?
That would be up to the potential lenders and to nobody else. At least in a free market system. Are you suggesting that borrowers who exercise their right under the loan agreement to limit their damages to the value of the house be denied all future credit by government fiat?
And then Obama happened.
Correct.
The long-term trend of housing prices is that housing is priced at 2.6 to 3.0 times the median house income. Median household income is the 50% percentile of total income of all wage-earners in a house, eg, mom and dad put together in a two-wage-earner household.
In some areas of California, the median house price reached 9 times median household income.
That means that to regain the “long term trend line valuation,” the median prices need to a) assume no drop in median household income and b) drop 66%.
Most of California’s urban areas got up to 6 times median household income in their area. That means to reach long-term trend line prices, we need to see 50% price drops.
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