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

iVillage Member
Registered: 08-19-2010
In reply to: janetlz
Thu, 08-19-2010 - 8:39pm

>>> Kind of like playing hot potato with mortgages, right?

No,not usually...but then, these aren't "usual" times. But you don't seem to understand the concept of an "investment." Most people invest to MAKE money, not lose it.

>>> And then getting a gov't bailout to save the Holy Investment Banks.

I didn't support the bank bailout...or any of the bailouts, for that matter.

>>> Oh yeah....the rich should do what makes financial sense and let the peons bail them out with taxes on their toilet-scrubbing-, brick-laying-, and cooking-earned income.

That was a Democrat policy...not a "rich" one.

>>> TWISTED!!!!

I agree.

iVillage Member
Registered: 07-15-2010
In reply to: janetlz
Fri, 08-20-2010 - 10:46am

Everyone loan issued "has to be" a conforming loan?

Huh? No it doesn't.

It doesn't have to be anything. The bank can say, no.

Surely you've heard the term "conventional loan"? Or are those so rare now that your generation isn't even aware of them?

I've purchased multiple properties with mortgages over the years and have never gotten anything except a conventional loan.

They don't involve other taxpayers and the requirements are such that the risk to the bank is very slim.

My original statement stands. When someone DOES NOT QUALIFY for a CONVENTIONAL LOAN then the bank must demand insurance from the taxpayer...i.e...federal government. But they could just say no and the federal government really should have looked closer at how the banks do business. They won't risk their own money...i.e. have strict standards for conventional loans but are fine with doing so when the government is going to cover any possibility of default!

Government guarantees should be abolished. If you can't meet the qualifications for a conventional loan then you can't afford the HOUSE.

>>Luck is what you call it when preparation meets opportunity<<
iVillage Member
Registered: 08-14-2010
In reply to: janetlz
Fri, 08-20-2010 - 3:07pm

"Surely you've heard the term "conventional loan"? "


All conventional loans are conforming loans.

https://www.efanniemae.com/sf/refmaterials/loanlimits/

"The Federal Housing Finance Agency (FHFA) publishes the conforming loan limits annually that apply to all conventional mortgages that are delivered to Fannie Mae"


That's a Fannie Mae web site so they say Fannie Mae, but all conventional loans are conforming loans.


The mortgage insurance that some high-risk borrowers have to purchase is additional insurance made to bring the

iVillage Member
Registered: 07-15-2010
In reply to: janetlz
Fri, 08-20-2010 - 3:31pm

Perhaps I am misunderstanding the point you're making. My apologies. The only point I was making is:

A conventional loan is any mortgage which is not guaranteed or insured by the federal government.

They are few and far between these days but those who use them are typically a much better risk as the standards they must meet are much higher than those who take loans that are guaranteed/insured by the federal government.

Mortgage insurance is not required on conventional loans meeting certain criteria so I question your comment about it being needed when making a 40% down payment.
http://www.lendingahand.com/2010/08/when-is-mortgage-insurance-required/




Edited 8/20/2010 3:38 pm ET by gripcon
>>Luck is what you call it when preparation meets opportunity<<
iVillage Member
Registered: 08-14-2010
In reply to: janetlz
Fri, 08-20-2010 - 8:44pm
I agree conventional borrowers are a better quality borrower.
iVillage Member
Registered: 07-04-2005
In reply to: janetlz
Sun, 08-22-2010 - 8:27am

It makes perfect sense to honor the terms of a contract that you signed.
A mortgage does NOT guarantee that homes will increase in value.

It makes no sense to take out a mortgage if you can't afford to pay it.
It's immoral, unethical and fraudulent to deliberately default on the contract.


iVillage Member
Registered: 01-25-2010
In reply to: janetlz
Sun, 08-22-2010 - 5:50pm
For decade the home value has risen. For decades the media ,financial planners etc extolled the value of owning a "home"(house). One cannot predict the future nor can one pay with money they do not have.
What do you really propose?
Keeping your self stuck does not make any sense whatsoever.
One defaults when one has no money. So the default will occur.
It is unpreventable. Capitalism is on the principle of risk as it any venture. If you cannot take the risk,don't.

xvx Pictures, Images and Photos


iVillage Member
Registered: 07-04-2005
In reply to: janetlz
Mon, 08-23-2010 - 8:49pm

Strategic default is not defaulting because one has no money. It's a deliberate action taken by a home owner who no longer wants to honor the terms of the contract that he/she signed.


When purchasing a home one

iVillage Member
Registered: 01-25-2010
In reply to: janetlz
Tue, 08-24-2010 - 1:14am
However, under water is underwater and not worth throwing resources at. Many houses were bought as investments. Investment goes sour bail!
Otherwise would be foolish.

xvx Pictures, Images and Photos


iVillage Member
Registered: 02-28-2010
In reply to: janetlz
Tue, 08-24-2010 - 2:24am
Not foolish, but moral as opposed to immoral.....