Strategic default

iVillage Member
Registered: 10-25-2006
Strategic default
51
Mon, 08-16-2010 - 3:06pm

How about this for sticking it to the younger generation?

http://blogs.reuters.com/deep-pocket/2010/08/13/strategic-defaults-why-older-americans-walk-away-from-mortgages/

Any 68 yo with $6,000/mo in retirement income should not be able to walk away from his mortgage. I had no idea that in some states they cannot go after the other assets of these defaulters.

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http://www.pnhp.org/news/2009/october/meet_the_new_health_.php

http://www.youtube.com/watch?v=DQTBYQlQ7yM

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iVillage Member
Registered: 08-14-2010
In reply to: janetlz
Mon, 08-16-2010 - 11:12pm
Interesting that rich people are much more likely to strategically default and walk away from a mortgage than the "deadbeat" middle class some Republicans love to stick it to.
iVillage Member
Registered: 02-28-2010
In reply to: janetlz
Mon, 08-16-2010 - 11:54pm
They probably "trickled" on the middle class minions during their working years - thus making them deserving.
iVillage Member
Registered: 08-14-2010
In reply to: janetlz
Tue, 08-17-2010 - 2:32am
Things like this happen when people use social ideology to craft their economic policy. It's not good for anyone, but some never learn.
iVillage Member
Registered: 10-25-2006
In reply to: janetlz
Tue, 08-17-2010 - 8:36am

Hey, i like the username (-:

Yeah, the guy in this article wasn't even as bad as many who walk away from the mega-mortgages--the ones that FHA cannot insure.

"More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent."

http://www.nytimes.com/2010/07/09/business/economy/09rich.html?_r=1

http://www.msnbc.msn.com/id/26315908/ns/msnbc_tv-rachel_maddow_show/

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http://www.pnhp.org/news/2009/october/meet_the_new_health_.php

http://www.youtube.com/watch?v=DQTBYQlQ7yM

iVillage Member
Registered: 01-25-2010
In reply to: janetlz
Tue, 08-17-2010 - 8:42am
It makes no financial sense to keep a property that is bleeding you white. If you can walking away is the sensible thing to do.

xvx Pictures, Images and Photos


iVillage Member
Registered: 10-25-2006
In reply to: janetlz
Tue, 08-17-2010 - 9:39am

Apparently, there are a lot of people who care only about themselves, and not their communities. Or maybe the millionaires don't consider their second and third homes to be in "their communities", and therefore they have no qualms about walking away, despite their ability to pay their obligations on those homes.

Meanwhile, many middle class families (like our friends in MI) are taking any part-time jobs they can find, and working any shift, trying to keep up on payments.

And the right-wingers continue to place all the blame for the sorry state of our economy on Obama and the lazy working class.

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http://www.pnhp.org/news/2009/october/meet_the_new_health_.php

http://www.youtube.com/watch?v=DQTBYQlQ7yM

iVillage Member
Registered: 01-25-2010
In reply to: janetlz
Tue, 08-17-2010 - 2:05pm

When the economy is in a recession and jobs are not forthcoming it is all to easy to point fingers to find a scape goat.
"Millionaires" can walk away. Yes they can for many have better representation than the ordinary citizen does and more leverage.
What was not discussed in the articles is the fact that walking away does NOT relieve payment of the mortgage but of the associated fees unless the loaning body signs off.
In the article we did not have the complete picture of his finances.
6000 per month is really no money(remember to be rich one needs 100 million USD). And for many that money is paper(shares which are NOT guaranteed) Nor are pensions guaranteed although a person might consider them to be guaranteed. His taxrate is 25% or 18000
leaving 54000USD minus state,city,county taxes.

I am against the "lazy" label. Many people can do math. working for less than unemployment is unwise unless there are benefits. Contrary to belief the employers are NOT impressed with low skill jobs on your resume.
I also believe the government state and federal need to make these promises sacred. The federal Government has let stand the notion that a corporation is a person. It used to be that pension were fully funded,that went by the boards, Unemployment used to be to the person so there was the incentive not to used because at the end a percentage was yours to keep(retirement)
Now some people choose to try to keep payments in hope that the market will recover. That is also their choice.
Noting the corruption found in some cities
http://www.aolnews.com/nation/article/calif-cities-struggling-under-wave-of-corruption/19591084
And the fact that there is little "local news" in depth anymore. we have a information crises.
I myself do not have sympathy for gamblers(stock market) as the shareholder are the real master of the corporations but take none of the responsibility.

xvx Pictures, Images and Photos


iVillage Member
Registered: 10-25-2006
In reply to: janetlz
Tue, 08-17-2010 - 2:42pm

$6,000 not that much.....I agree. My objection is that, by taking on a mortgage on a second property in retirement, the guy is being irresponsible--as bad as a stock market gambler--and by walking away, he and others like him are cheating the next generation. Will the 20-somethings of today be able to afford even a FIRST home?

I think the loaning bodies are forced to sign off if they want to move the properties, right? They can't hold on to them forever. And some states apparently do not allow the lenders to go after other assets.

"lazy" label....I agree with you.

High salaries in city govs.....Friedrichs makes a good point that it's the local culture that allows corruption; we DO need to pay more attn to our local govs.

shareholder masters of corps....sort of. Sometimes 90% of the common shares are held by institutions, and in those cases the individual shareholder really has no say. (Still, he chose to invest and should accept some blame.) In the last crisis, most institutions were not doing their homework either, despite the high salaries their execs were collecting.

-----------------------------------------------
http://www.pnhp.org/news/2009/october/meet_the_new_health_.php

http://www.youtube.com/watch?v=DQTBYQlQ7yM

iVillage Member
Registered: 01-25-2010
In reply to: janetlz
Tue, 08-17-2010 - 3:04pm

I disagree with >>>and by walking away, he and others like him are cheating the next generation. Will the 20-somethings of today be able to afford even a FIRST home?<<<<<<
There is no evidence that that will become the outcome. Fear yes, no facts. But if that were true why are so many foreclosed homes being bought up by speculators? Buy low sell high.

>>>>I think the loaning bodies are forced to sign off if they want to move the properties, right? They can't hold on to them forever. And some states apparently do not allow the lenders to go after other assets.<<<<<
I am not sure there are too many governing bodies in the US

>>>>>>High salaries in city govs.....Friedrichs makes a good point that it's the local culture that allows corruption; we DO need to pay more attn to our local govs.<<<<<<
I have nothing against high salaries except when the city is broke and barely treading water And those meetings are held when many cannot attend even if they knew that it was occurring!

xvx Pictures, Images and Photos


iVillage Member
Registered: 07-15-2010
In reply to: janetlz
Wed, 08-18-2010 - 4:55pm

Absolutely! Blame the rules that created the mess, not those who are playing by them.

I would not walk away from a loan obligation if my other assets could be touched. If however my mortgaged property had dropped significantly in value mostly due to the "system" or actions of others and the worst thing that could happen to me would be they took the depreciating asset from me? And every other household was doing the same thing...I'd be a FOOL to continue to funnel money down the toilet.

But then again I would never have ever purchased a property that I could not rent and get enough rent out of to cover the carrying costs of the loan. I wouldn't have risked someone elses money that way but I most certainly understand those who have made this decision and do not blame them even though I was foolish enough to pay cash for my homes...I have nothing to walk away from.

So, I suck it up and realize those others with non-recourse loans who have lost nothing more than someone else's money and gotten a ding on their credit score were the smart ones. And then I go out and grab some good deals in the hopes of making up for the bad ones one day.

It is not in anyone's best interest--the community included to pay for an overpriced house that you have no hope of every paying for in either your lifetime or maybe even your children's lifetime.

>>Luck is what you call it when preparation meets opportunity<<

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