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: 07-04-2005
In reply to: janetlz
Tue, 08-24-2010 - 2:49am

"investments" are not guaranteed a return.


One should never take out a loan if one cannot afford to pay the loan back.

iVillage Member
Registered: 01-25-2010
In reply to: janetlz
Tue, 08-24-2010 - 12:35pm
I disagree. It is of course up to the individual. However,considering the "morals" of profit at any cost. It is prudent to look at legal options. In time,the stance may be vindicated. To castigate others who do not agree and use legal ways to get out from under is equally immoral. One choses which poison to drink.

xvx Pictures, Images and Photos


iVillage Member
Registered: 01-25-2010
In reply to: janetlz
Tue, 08-24-2010 - 1:02pm

Yes that is my point that many did not realize that there is a down side that was not prepared for. That I see as financial institution as well as the borrower's misunderstanding of the process. Too many people were lured into loans that they should have been more careful about. However, the greater knowledge lies with the lending institutions who should have had better controls in place. IMO,the lax safeguards and poor supervision are very much to blame as are the banking lending regulation that encouraged ignorant consumers to be like lemmings. I am also skeptical of an educational system that does not include financial education. I believe that all took part in unwise lending an borrowing. Imo The lending institution bears the greater guilt.
Why? Because they knew or had reason to know that the borrower was actually over their head and could have denied that loan.

>>>One should never take out a loan if one cannot afford to pay the loan back. The loan is not contingent upon future value of the property. <<<<<
So very right! That is the reason for my stance. I Remember form my parents and the fact that my father actually walked my thru a house loan (with his friends in banking). Looking back I am amazed that the education that was given kept me from disaster.
My Business investment professor said to us that stock,investments are gambling! Only put out what you can afford to lose. And always have a line of retreat. The system is not for beginners with out expert help. The affluent have expert help and structure the loan should disaster occur that they have a line of retreat the the average person may not be aware of.

>>>>>Deliberately missing payments when one can afford to make them is fraud, pure and simple. And it adds to the mess, and further decreases the values of other properties. Strategic default adds to the problem, and punishes neighbors for ones own greed.<<<<<
Not according to law and contract. I also consider too many neighbors did the same thing over bought based on scenario's by shyster loan operators. Because of their actions houses no longer were homes. And those with homes were penalized.
Default in many ways opens other doors(which unfortunately are not being planned). I see this as an opportunity to solve many of the housing crises of today. By rezoning and better planning there is the option of building a better tomorrow. Unfortunately,I think we will cling to the old ways and not venture forth to a better future.
I would hope that we have mush stricter banking /loan regulations as Canada does. The banking industry needs to get rid of shareholders. Shareholders are the hidden owners and bosses. The banking Industry needs to be upfront with it's mistakes.
If a person had good legal representation the deficiency judgments are rare and they can go bankrupt anyway.
A bit of punishment to the loan industry is warranted. Now to bulldoze those poor usage of land monstrosities Including office parks and such to re integrate with a overall land use plan that includes all factors and allows better usage. I do not thin That will happen. The greed is still there. I have seen how many of the real estate board and meetings work and I also put out now genuine hope that it will improve.

xvx Pictures, Images and Photos


iVillage Member
Registered: 02-28-2010
In reply to: janetlz
Tue, 08-24-2010 - 2:59pm

That's why lawyers are not held in high regard LOL.


I don't drink any poison.

iVillage Member
Registered: 08-14-2010
In reply to: janetlz
Tue, 08-24-2010 - 3:55pm

"I don't drink any poison.

iVillage Member
Registered: 02-28-2010
In reply to: janetlz
Tue, 08-24-2010 - 4:38pm
and???
iVillage Member
Registered: 10-25-2006
In reply to: janetlz
Wed, 08-25-2010 - 2:51pm

Great! Now we got these idiots telling us that walking away is the right thing to do; if commercial real-estate investors can do it, so can individuals.

What do you think mortgage rates will be like if everyone who is underwater (25% of mtgs) walks away? What will it do to the value of the homes secured by the other 75%, the good mtgs? How long would it take before no one would want to own a home, ever again?

Be sure to read the comments after/while viewing:

http://finance.yahoo.com/tech-ticker/it%27s-okay-to-walk-away-let%27s-end-the-%22morality%22-double-standard-on-mortgage-defaults-535365.html?tickers=mac,vno,spg,xhb,vnq,tol,len&sec=topStories&pos=8&asset=&ccode=

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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: 07-15-2010
In reply to: janetlz
Wed, 08-25-2010 - 3:46pm

And the problem is with non-recourse loans as well. If people thought that their other assets could be taken and given to their creditor they'd think twice about what they were getting into.

Countries without these "protections" for home borrowers don't have the levels of default that we have.


>>Luck is what you call it when preparation meets opportunity<<
iVillage Member
Registered: 07-15-2010
In reply to: janetlz
Wed, 08-25-2010 - 3:50pm

>>Because they knew or had reason to know that the borrower was actually over their head and could have denied that loan.<<

So some people are too dumb to know what's in their own best interest. It's an inherent risk of freedom.

Personally, I'd rather be free.

>>Luck is what you call it when preparation meets opportunity<<
iVillage Member
Registered: 08-14-2010
In reply to: janetlz
Wed, 08-25-2010 - 7:36pm

"What do you think mortgage rates will be like if everyone who is underwater (25% of mtgs) walks away? What will it do to the value of the homes secured by the other 75%, the good mtgs? How long would it take before no one would want to own a home, ever again?"