Pages: 1

 

2010-06-05 18:08:16
Harmor
Error_Name_Not_Found
+605|6834|San Diego, CA, USA
Source: http://www.mhrealestateandinvestments.n … r-mortgage

MH Real Estate and Investments wrote:

Do I believe that homeowner’s have a general obligation to pay their debts? Yes I do; however I also believe that a contract must be entered into fairly by both parties with enough information to make an accurate decision.

Homeowner’s are being allowed to make a 30 year decision on the basis of a couple of hours of work by an appraiser using data from a flawed and corrupt system. I agree they should be held accountable for their poor choices. A strategic default will result in poor credit which increases their future borrowing costs and possibly their job opportunities. Thus, homeowners that choose to walk away from a home are impacted for their decision, they don’t get off scot-free, which is important to note.

Banks and mortgage companies have been moronic in their approach to lending for home purchases. Why would anyone commit to a 30-year term based on the minimal amount of data at their fingertips. This approach may have been fine in simpler financial times, but in the era of securitization and CDOs a much stronger analytical approach must be taken to determine not only the value of the home today but also the expected home value in the future.
So I guess the rest of us paying our mortgages on time and keeping our original promise when we bought our homes are going to flip the bill as all these 'strategic defaulters' walk away from their obligations scot-free.
2010-06-05 18:36:08
13/f/taiwan
Member
+940|5984

Harmor wrote:

So I guess the rest of us paying our mortgages on time and keeping our original promise when we bought our homes are going to flip the bill as all these 'strategic defaulters' walk away from their obligations scot-free.
wat

"A strategic default will result in poor credit which increases their future borrowing costs and possibly their job opportunities. Thus, homeowners that choose to walk away from a home are impacted for their decision, they don’t get off scot-free, which is important to note."

Do you even read the articles you post?
2010-06-05 20:13:50
Harmor
Error_Name_Not_Found
+605|6834|San Diego, CA, USA
A small fraction.  You can default and buy a new property within 2 or 3 years.  But here in California when you have a $600,000 house and it forecloses for $400,000...how long before the bank recoups the lost income assuming you try to buy a house from the same lender?

We, the responsible, are going to pay for this mess.  All the costs that the banks will pass on to us.
2010-06-05 21:01:12
Dilbert_X
The X stands for
+1,816|6391|eXtreme to the maX
Its only in the US that homeowners don't have a LEGAL obligation to pay off any loss on their mortgage, the only escape being bankruptcy.
Fuck Israel
2010-06-05 21:26:10
Harmor
Error_Name_Not_Found
+605|6834|San Diego, CA, USA
Bankruptcy lost its stigma, just like teen pregnancy.
2010-06-05 21:32:32
Dilbert_X
The X stands for
+1,816|6391|eXtreme to the maX

Harmor wrote:

Bankruptcy lost its stigma, just like teen pregnancy.
Not so much in most of the world.
Fuck Israel
2010-06-05 22:33:27
Diesel_dyk
Object in mirror will feel larger than it appears
+178|6279|Truthistan
I really can't blame people for walking away from their houses. In some cases its the smart business decision to make.
This has all happened before during the 1970s/80s, when we had the oil crisis and stagflation. Housing prices dropped and people were able to turn the house back to the bank, literally buy the house across the street and save thousands of dollars. It makes no sense, except for some sort of sentimental notion of honor, that you should stay in a house that is under water by for example 100k, when you can walk away and buy the exact same property with a saving of 100k. Ask yourself, if you were a smart business man, what would you do.... what do you think Wall street style investor would do? I think they would cut their loses and call it a profit.
2010-06-06 10:50:25
unnamednewbie13
Moderator
+2,056|7057|PNW

At first, I thought this was a thread about actual underwater property. I didn't know people were moving under the Pacific yet.
2010-06-06 19:33:48
Sup3r_Dr4gon
Boat sig is not there anymore
+214|6612|Australia

Diesel_dyk wrote:

I really can't blame people for walking away from their houses. In some cases its the smart business decision to make.
This has all happened before during the 1970s/80s, when we had the oil crisis and stagflation. Housing prices dropped and people were able to turn the house back to the bank, literally buy the house across the street and save thousands of dollars. It makes no sense, except for some sort of sentimental notion of honor, that you should stay in a house that is under water by for example 100k, when you can walk away and buy the exact same property with a saving of 100k. Ask yourself, if you were a smart business man, what would you do.... what do you think Wall street style investor would do? I think they would cut their loses and call it a profit.
A question though - where would they get the money for another house? If someone just walks away from such a massive debt, I can't see any banks scrambling to lend them more money for another property.
2010-06-06 21:15:45
Reciprocity
Member
+721|6866|the dank(super) side of Oregon
Interesting article on the subject.

Corporations are only obliged to protect their own interests.  Why not individuals?

Do you think the bank you're borrowing from would hesitate for a second to walk away from a bad investment to protect its own financial position?

Last edited by Reciprocity (2010-06-06 21:18:24)

2010-06-06 21:26:24
Harmor
Error_Name_Not_Found
+605|6834|San Diego, CA, USA

Sup3r_Dr4gon wrote:

Diesel_dyk wrote:

I really can't blame people for walking away from their houses. In some cases its the smart business decision to make.
This has all happened before during the 1970s/80s, when we had the oil crisis and stagflation. Housing prices dropped and people were able to turn the house back to the bank, literally buy the house across the street and save thousands of dollars. It makes no sense, except for some sort of sentimental notion of honor, that you should stay in a house that is under water by for example 100k, when you can walk away and buy the exact same property with a saving of 100k. Ask yourself, if you were a smart business man, what would you do.... what do you think Wall street style investor would do? I think they would cut their loses and call it a profit.
A question though - where would they get the money for another house? If someone just walks away from such a massive debt, I can't see any banks scrambling to lend them more money for another property.
You can save alot when you can stay in your house on average of 13 months rent-free.

I'm trying to find the article on http://www.bubbleinfo.com/ that had a guy stay rent-free for 3 years!!!  The MLS picture of his property had a convertible BMW in the driveway.
2010-06-06 21:35:46
Jay
Bork! Bork! Bork!
+2,006|5643|London, England
https://sg.wsj.net/public/resources/images/NA-BC818_WALKAW_NS_20091216184045.gif
http://online.wsj.com/article/SB126100260600594531.html
Good article from the WSJ.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
2010-06-06 21:40:37
Reciprocity
Member
+721|6866|the dank(super) side of Oregon

JohnG@lt wrote:

http://sg.wsj.net/public/resources/imag … 184045.gif http://online.wsj.com/article/SB126100260600594531.html Good article from the WSJ.
How will my foreclosure hurt my community and neighbors? a corporation would ask that question? Do I feel a moral responsibility to meet financial commitments? a corporation wouldn't ask that question.

Last edited by Reciprocity (2010-06-07 12:35:24)

2010-06-07 05:54:48
Dilbert_X
The X stands for
+1,816|6391|eXtreme to the maX
How will my foreclosure hurt my community and neighbors?  a corporation would ask that question.
One word - Outsourcing.
Fuck Israel
2010-06-07 06:41:10
Mitch
16 more years
+877|6811|South Florida

unnamednewbie13 wrote:

At first, I thought this was a thread about actual underwater property. I didn't know people were moving under the Pacific yet.
the whole of california should move under the pacific if you catch my drift.
15 more years! 15 more years!

 

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