Walking away from your mortgage

[boedicca]

So then the bank can get them out through legal means and a simple court order. What's the problem?

It's unethical if they have the ability to pay.

I hope they don't have children - what an awful example for them to see their parents engaged in what is essentially fraud.

Its not fraud, nor is it "essentially" fraud.

Yes it is.

They have the ability to pay, and are refusing to do so.

The fact that you defend such actions says volumes, none of it positive, regarding the content of your character.

 

[SpidermanTuba]

It's unethical if they have the ability to pay.

I hope they don't have children - what an awful example for them to see their parents engaged in what is essentially fraud.

Its not fraud, nor is it "essentially" fraud.

Yes it is.

Under what law?

They have the ability to pay, and are refusing to do so.

That's not fraud. Its failure to comply with a the terms of a contract.

Do you know what words mean or do you just make it up as you go along to suit your latest whim?

Besides what makes you think all these people have the ability to pay?

The fact that you defend such actions says volumes, none of it positive, regarding the content of your character.

I have yet to witness you condemn a similar action by a corporation ever, so honestly I don't see where you moral standing comes from. You seem to think its fine if a corporation does exactly the same thing, but not for an individual to do it.


As long as they comply with any orders issued from a judge I fail to see any moral wrongdoing.

 

[RDD_1210]

I'm going to have to agree that people who intentionally don't pay their mortgage AND then go and buy luxury items get no sympathy from me.

What do they need your sympathy for? They have a roof over their head. Maybe they're trying to avoid needing your sympathy.


Banks fuck people all the time and force the people to lawyer up to undo the fucking. It is in no way wrong or immoral to to the same thing to a bank.

They have a roof over their head for now. What happens when they get evicted and have a mortgage default on their credit report? Not only will buying again for MANY years be impossible, even renting a decent place will be extremely difficult. Are they thinking that far ahead? Doubtful since they deem it appropriate to buy luxury items they probably don't need.

Again, I'm not "PRO" bank, or against the person who genuinely falls on hard times and loses their home. I'm against selfish people (like the banks and these types of entitled homeowners) who think just cause the banks are dishonest liars, they can be the same way. Ever heard of holding yourself to a higher standard?

 

[GHook93]

It's hard to sympathize with the banks when they did so many shady and stupid transactions. Not to mention they took billions of dollars in tax payor bailout money. So they are just as big of freeloaders. They packaged toxic mortgages into CDOs slapped a AAA rating and destroyed countries and other people investments.

Heck if people can pull one over on the banks, then I have trouble sympathizing for the banks, when they pulled a huge one over on us.

 

[Nonelitist]

I'm going to have to agree that people who intentionally don't pay their mortgage AND then go and buy luxury items get no sympathy from me.

What do they need your sympathy for? They have a roof over their head. Maybe they're trying to avoid needing your sympathy.


Banks fuck people all the time and force the people to lawyer up to undo the fucking. It is in no way wrong or immoral to to the same thing to a bank.

This is maybe the best example of a liberal, gimme gimme gimme attitude that could be shown.

You liberals must be pretty proud of spidey and his beliefs of self responsibility.

 

[SpidermanTuba]

They have a roof over their head for now. What happens when they get evicted and have a mortgage default on their credit report?

If they took advantage of the situation, they've saved up cash.

Not only will buying again for MANY years be impossible, even renting a decent place will be extremely difficult

.
Renting will not be impossible. A sufficient amount of advance rent or large cash deposit can convince most reasonable landlords.

Are they thinking that far ahead?

Most people facing immediate eviction don't have the luxury of thinking far ahead. Its more to do with keeping a roof over your head for tonight. If I've got a family and my only alternative is to go to the homeless shelter or the streets, I'm staying in the house.

Again, I'm not "PRO" bank

Sure you are.

or against the person who genuinely falls on hard times and loses their home.

Yeah, the economy has been just great the past few years, all these people being foreclosed on are just lazy good for nothings.

I'm against selfish people (like the banks and these types of entitled homeowners) who think just cause the banks are dishonest liars, they can be the same way. Ever heard of holding yourself to a higher standard?

You act as if the people depicted in this particular article are the only people who do this. It typically takes many months between default and final eviction - this isn't anything new or unique to the people featured in the article. The only reason its even noteworthy is that the average time till eviction had been increasing - but this is as much a function of the banks being overloaded with such properties as it is people not having another place to go.

The average borrower in foreclosure has been delinquent for 438 days before actually being evicted, up from 251 days in January 2008, according to LPS Applied Analytics.

While there are no firm figures on how many households are following the Pemberton-Reboyras path of passive resistance, real estate agents and other experts say the number of overextended borrowers taking the “free rent” approach is on the rise.

There is no question, though, that for some borrowers in default, foreclosure is only a theoretical threat for a long time.

More than 650,000 households had not paid in 18 months, LPS calculated earlier this year. With 19 percent of those homes, the lender had not even begun to take action to repossess the property — double the rate of a year earlier.

Seriously, would you rather we have 650,000 homeless households instead?

 

[RDD_1210]

I'm going to have to agree that people who intentionally don't pay their mortgage AND then go and buy luxury items get no sympathy from me.

What do they need your sympathy for? They have a roof over their head. Maybe they're trying to avoid needing your sympathy.


Banks fuck people all the time and force the people to lawyer up to undo the fucking. It is in no way wrong or immoral to to the same thing to a bank.

This is maybe the best example of a liberal, gimme gimme gimme attitude that could be shown.

You liberals must be pretty proud of spidey and his beliefs of self responsibility.

Enough with the labels. I'm just as "liberal" as anyone here and I don't agree with what these people are doing either. Life isn't always about labels.

 

[boedicca]

As long as they comply with any orders issued from a judge I fail to see any moral wrongdoing.

Of course you don't, hun.

 

[SpidermanTuba]

I'm going to have to agree that people who intentionally don't pay their mortgage AND then go and buy luxury items get no sympathy from me.

What do they need your sympathy for? They have a roof over their head. Maybe they're trying to avoid needing your sympathy.


Banks fuck people all the time and force the people to lawyer up to undo the fucking. It is in no way wrong or immoral to to the same thing to a bank.

This is maybe the best example of a liberal, gimme gimme gimme attitude that could be shown.

You liberals must be pretty proud of spidey and his beliefs of self responsibility.

"Gimme Gimme Gimmer' is the attitude of a for profit corporation, because they are interested in only profit. It is beyond me why you think it unfair for people to treat corporations as corporations treat people. Can you explain this double standard?

 

[SpidermanTuba]

As long as they comply with any orders issued from a judge I fail to see any moral wrongdoing.

Of course you don't, hun.

Can you please explain why it is not fair for people to treat the banks as they have treated people? Why this double standard?

 

[manifold]

I've seen Tubby post some seriously stupid shit many times.

This is not one of those times.

What these borrowers are doing is not fraud, it's not illegal and it's not even dishonest. But it is ethically and morally suspect in my opinion. But that's it, in my opinion.

And my opinion, just like everyone else's here, doesn't mean jack shit.

 

[Nonelitist]

What do they need your sympathy for? They have a roof over their head. Maybe they're trying to avoid needing your sympathy.


Banks fuck people all the time and force the people to lawyer up to undo the fucking. It is in no way wrong or immoral to to the same thing to a bank.

This is maybe the best example of a liberal, gimme gimme gimme attitude that could be shown.

You liberals must be pretty proud of spidey and his beliefs of self responsibility.

"Gimme Gimme Gimmer' is the attitude of a for profit corporation, because they are interested in only profit. It is beyond me why you think it unfair for people to treat corporations as corporations treat people. Can you explain this double standard?

Please explain how Banks do something similar to individuals?

 

[RDD_1210]

They have a roof over their head for now. What happens when they get evicted and have a mortgage default on their credit report?

If they took advantage of the situation, they've saved up cash.

Not only will buying again for MANY years be impossible, even renting a decent place will be extremely difficult

.
Renting will not be impossible. A sufficient amount of advance rent or large cash deposit can convince most reasonable landlords.

Most people facing immediate eviction don't have the luxury of thinking far ahead. Its more to do with keeping a roof over your head for tonight. If I've got a family and my only alternative is to go to the homeless shelter or the streets, I'm staying in the house.

Seriously dude? You say most people facing eviction don't have the luxury of thinking that far ahead. But you also said...they could have saved up cash to get a new place to live if they took advantage of the situation. Well if they're not thinking in advance, how do they have cash saved up?

And I agree, if it's between the streets and staying in the house, I'm staying in the house as long as possible. But that doesn't mean I'm going out and buying frivolous luxury goods. That's the problem I have with these people, yet you seem to gloss over.

 

[RDD_1210]

What do they need your sympathy for? They have a roof over their head. Maybe they're trying to avoid needing your sympathy.


Banks fuck people all the time and force the people to lawyer up to undo the fucking. It is in no way wrong or immoral to to the same thing to a bank.

This is maybe the best example of a liberal, gimme gimme gimme attitude that could be shown.

You liberals must be pretty proud of spidey and his beliefs of self responsibility.

"Gimme Gimme Gimmer' is the attitude of a for profit corporation, because they are interested in only profit. It is beyond me why you think it unfair for people to treat corporations as corporations treat people. Can you explain this double standard?

So you subscribe to the "Two wrongs make a right theory" ?

 

[SpidermanTuba]

This is maybe the best example of a liberal, gimme gimme gimme attitude that could be shown.

You liberals must be pretty proud of spidey and his beliefs of self responsibility.

"Gimme Gimme Gimmer' is the attitude of a for profit corporation, because they are interested in only profit. It is beyond me why you think it unfair for people to treat corporations as corporations treat people. Can you explain this double standard?

Please explain how Banks do something similar to individuals?

They kick out people protected by the Tenant Protection Act for one thing.

 

[SpidermanTuba]

They have a roof over their head for now. What happens when they get evicted and have a mortgage default on their credit report?

If they took advantage of the situation, they've saved up cash.

Not only will buying again for MANY years be impossible, even renting a decent place will be extremely difficult

.
Renting will not be impossible. A sufficient amount of advance rent or large cash deposit can convince most reasonable landlords.

Most people facing immediate eviction don't have the luxury of thinking far ahead. Its more to do with keeping a roof over your head for tonight. If I've got a family and my only alternative is to go to the homeless shelter or the streets, I'm staying in the house.

Seriously dude? You say most people facing eviction don't have the luxury of thinking that far ahead. But you also said...they could have saved up cash to get a new place to live if they took advantage of the situation. Well if they're not thinking in advance, how do they have cash saved up?

And I agree, if it's between the streets and staying in the house, I'm staying in the house as long as possible. But that doesn't mean I'm going out and buying frivolous luxury goods. That's the problem I have with these people, yet you seem to gloss over.

I don't care what you would or wouldn't do.

 

[SpidermanTuba]

This is maybe the best example of a liberal, gimme gimme gimme attitude that could be shown.

You liberals must be pretty proud of spidey and his beliefs of self responsibility.

"Gimme Gimme Gimmer' is the attitude of a for profit corporation, because they are interested in only profit. It is beyond me why you think it unfair for people to treat corporations as corporations treat people. Can you explain this double standard?

So you subscribe to the "Two wrongs make a right theory" ?

its not wrong to apply the same standard of ethics to a corporation as they apply to people

Its not even Biblically possible to wrong a corporation. A corporation is an intangible non-human entity - it has no rights under God. It only has rights under the laws that man creates.

 

[boedicca]

Punishing someone for a crime they committed is not a second wrong, bub.

You really do wallow in an existential fugue. Condolences.

 

[MaggieMae]

I haven't read the most recent issue of THE WEEK, but I'm wondering if it didn't refer to this NYT Sunday Magazine article published last January. (I'm copying and linking the whole thing, since once some people here see the evil New York Times, they don't go any further--which is dumb, by the way.)

The Way We Live Now - Walk Away From Your Mortgage! - NYTimes.com

January 10, 2010
The Way We Live Now
Walk Away From Your Mortgage!
By ROGER LOWENSTEIN

John Courson, president and C.E.O. of the Mortgage Bankers Association, recently told The Wall Street Journal that homeowners who default on their mortgages should think about the “message” they will send to “their family and their kids and their friends.” Courson was implying that homeowners — record numbers of whom continue to default — have a responsibility to make good. He wasn’t referring to the people who have no choice, who can’t afford their payments. He was speaking about the rising number of folks who are voluntarily choosing not to pay.

Such voluntary defaults are a new phenomenon. Time was, Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work. But the housing collapse left 10.7 million families owing more than their homes are worth. So some of them are making a calculated decision to hang onto their money and let their homes go. Is this irresponsible?

Businesses — in particular Wall Street banks — make such calculations routinely. Morgan Stanley recently decided to stop making payments on five San Francisco office buildings. A Morgan Stanley fund purchased the buildings at the height of the boom, and their value has plunged. Nobody has said Morgan Stanley is immoral — perhaps because no one assumed it was moral to begin with. But the average American, as if sprung from some Franklinesque mythology, is supposed to honor his debts, or so says the mortgage industry as well as government officials. Former Treasury Secretary Henry M. Paulson Jr. declared that “any homeowner who can afford his mortgage payment but chooses to walk away from an underwater property is simply a speculator — and one who is not honoring his obligation.” (Paulson presumably was not so censorious of speculation during his 32-year career at Goldman Sachs.)

The moral suasion has continued under President Obama, who has urged that homeowners follow the “responsible” course. Indeed, HUD-approved housing counselors are supposed to counsel people against foreclosure. In many cases, this means counseling people to throw away money. Brent White, a University of Arizona law professor, notes that a family who bought a three-bedroom home in Salinas, Calif., at the market top in 2006, with no down payment (then a common-enough occurrence), could theoretically have to wait 60 years to recover their equity. On the other hand, if they walked, they could rent a similar house for a pittance of their monthly mortgage.

There are two reasons why so-called strategic defaults have been considered antisocial and perhaps amoral. One is that foreclosures depress the neighborhood and drive down prices. But in a market society, since when are people responsible for the economic effects of their actions? Every oil speculator helps to drive up gasoline prices. Every hedge fund that speculated against a bank by purchasing credit-default swaps on its bonds signaled skepticism about the bank’s creditworthiness and helped to make it more costly for the bank to borrow, and thus to issue loans. We are all economic pinballs, insensibly colliding for better or worse.

The other reason is that default (supposedly) debases the character of the borrower. Once, perhaps, when bankers held onto mortgages for 30 years, they occupied a moral high ground. These days, lenders typically unload mortgages within days (or minutes). And not just in mortgage finance, but in virtually every realm of our transaction-obsessed society, the message is that enduring relationships count for less than the value put on assets for sale.

Think of private-equity firms that close a factory — essentially deciding that the company is worth more dead than alive. Or the New York Yankees and their World Series M.V.P. Hideki Matsui, who parted company as soon as the cheering stopped. Or money-losing hedge-fund managers: rather than try to earn back their investors’ lost capital, they start new funds so they can rake in fresh incentives. Sam Zell, a billionaire, let the Tribune Company, which he had previously acquired, file for bankruptcy. Indeed, the owners of any company that defaults on bonds and chooses to let the company fail rather than invest more capital in it are practicing “strategic default.” Banks signal their complicity with this ethos when they send new credit cards to people who failed to stay current on old ones.

Mortgage holders do sign a promissory note, which is a promise to pay. But the contract explicitly details the penalty for nonpayment — surrender of the property. The borrower isn’t escaping the consequences; he is suffering them.

In some states, lenders also have recourse to the borrowers’ unmortgaged assets, like their car and savings accounts. A study by the Federal Reserve Bank of Richmond found that defaults are lower in such states, apparently because lenders threaten the borrowers with judgments against their assets. But actual lawsuits are rare.

And given that nearly a quarter of mortgages are underwater, and that 10 percent of mortgages are delinquent, White, of the University of Arizona, is surprised that more people haven’t walked. He thinks the desire to avoid shame is a factor, as are overblown fears of harm to credit ratings. Probably, homeowners also labor under a delusion that their homes will quickly return to value. White has argued that the government should stop perpetuating default “scare stories” and, indeed, should encourage borrowers to default when it’s in their economic interest. This would correct a prevailing imbalance: homeowners operate under a “powerful moral constraint” while lenders are busily trying to maximize profits. More important, it might get the system unstuck. If lenders feared an avalanche of strategic defaults, they would have an incentive to renegotiate loan terms. In theory, this could produce a wave of loan modifications — the very goal the Treasury has been pursuing to end the crisis.

No one says defaulting on a contract is pretty or that, in a perfectly functioning society, defaults would be the rule. But to put the onus for restraint on ordinary homeowners seems rather strange. If the Mortgage Bankers Association is against defaults, its members, presumably the experts in such matters, might take better care not to lend people more than their homes are worth.
...
Roger Lowenstein, an outside director of the Sequoia Fund, is a contributing writer for the magazine. His book “The End of Wall Street” is coming out in April.

 

[SpidermanTuba]

Punishing someone for a crime they committed is not a second wrong, bub.

Yeah tell that to the children of convicted wrongdoers who wind up becoming foster children.

Punishing someone for a crime they committed is not a second wrong, bub.

You really do wallow in an existential fugue. Condolences.

Why do you think corporations deserve special treatment?