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This 60-minutes piece spells out exactly the fear I have with the current economic environment....people's changing philosophies regarding their commitment to repay borrowed funds and the impact that has on their credit score...as the guy in this story says, "seems like it's the 'in thing' to do these days"...

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Combine THAT with the story on the local website this a.m.

http://www.azcentral.com/business/reale ... aults.html" onclick="window.open(this.href);return false;

People abandoning houses and mortgages they can afford - or walking away, as it is now commonly known as - has become a polarizing issue between homeowners and lenders.

Thousands of Phoenix-area homeowners owe more than their houses are worth and don't want to wait as long as five to 10 years for home values to rebound. Others have unsuccessfully tried to work out loan modifications with their lender. Some believe it's a smart business decision to stop paying on an asset they can't sell for its current value. So a growing number of homeowners are considering walking away or have already done so, committing what has become known as a "strategic default."

The story itself is rather innocuous, but the COMMENTS display the mindset that is overtaking the American public....a mindset that will bring down the entire financial services industry if it takes root. There ain't enough money in the US treasury to pay for this, folks...

The neighbors who lived directly behind us recently did this. Simply stopped paying, got warning after warning to pay up for a few months (which essentially meant they lived there for free), and simply left when they found a place to rent. Some young couple with a kid bought the house though, so they probably got a nice deal for it. Good for them, bad for the lender...

∞∞∞ wrote:The neighbors who lived directly behind us recently did this. Simply stopped paying, got warning after warning to pay up for a few months (which essentially meant they lived there for free), and simply left when they found a place to rent. Some young couple with a kid bought the house though, so they probably got a nice deal for it. Good for them, bad for the lender...

Now multiply that by 2-3 million homes, at an average loss of $100,000/home (a very conservative number, I might add) and you get an idea of the magnitude of the problem.

AZGrizFan wrote:

∞∞∞ wrote:The neighbors who lived directly behind us recently did this. Simply stopped paying, got warning after warning to pay up for a few months (which essentially meant they lived there for free), and simply left when they found a place to rent. Some young couple with a kid bought the house though, so they probably got a nice deal for it. Good for them, bad for the lender...

Now multiply that by 2-3 million homes, at an average loss of $100,000/home (a very conservative number, I might add) and you get an idea of the magnitude of the problem.

Aren't they just following the lead of Wall Street?

kalm wrote:

AZGrizFan wrote:
Now multiply that by 2-3 million homes, at an average loss of $100,000/home (a very conservative number, I might add) and you get an idea of the magnitude of the problem.

Aren't they just following the lead of Wall Street?

Does that make it right???

AZGrizFan wrote:This 60-minutes piece spells out exactly the fear I have with the current economic environment....people's changing philosophies regarding their commitment to repay borrowed funds and the impact that has on their credit score...as the guy in this story says, "seems like it's the 'in thing' to do these days"...

" onclick="window.open(this.href);return false;

Combine THAT with the story on the local website this a.m.

http://www.azcentral.com/business/reale ... aults.html" onclick="window.open(this.href);return false;

People abandoning houses and mortgages they can afford - or walking away, as it is now commonly known as - has become a polarizing issue between homeowners and lenders.

Thousands of Phoenix-area homeowners owe more than their houses are worth and don't want to wait as long as five to 10 years for home values to rebound. Others have unsuccessfully tried to work out loan modifications with their lender. Some believe it's a smart business decision to stop paying on an asset they can't sell for its current value. So a growing number of homeowners are considering walking away or have already done so, committing what has become known as a "strategic default."

The story itself is rather innocuous, but the COMMENTS display the mindset that is overtaking the American public....a mindset that will bring down the entire financial services industry if it takes root. There ain't enough money in the US treasury to pay for this, folks...

As the 60 Minutes piece mentions, some of the biggest walkaways in real estate in the past couple of years have been by Morgan Stanley and other banks.

What's good for the goose is good for the gander. I don't feel sorry for banks.

At all.

Col Hogan wrote:

kalm wrote:
Aren't they just following the lead of Wall Street?

Does that make it right???

Is it really wrong though?

I mean, I don't know much about the lending process, but isn't the essential agreement that the person pays or loses the house? If they don't pay, then was anything in the agreement broken if they did lose the house?

∞∞∞ wrote:

Col Hogan wrote:
Does that make it right???

Is it really wrong though?

I mean, I don't know much about the lending process, but isn't the essential agreement that the person pays or loses the house? If they don't pay, then was anything in the agreement broken if they did lose the house?

Nope. The house is the collateral. The banks are dealing with their miscalculations in handing out loans like candy. Ain't that a bitch? The penalty for the folks walking away is a reduced credit rating.

It isn't right, morally, but I can't feel bad for the banks that fueled the obscene run-up in prices.

kalm wrote:

AZGrizFan wrote:
Now multiply that by 2-3 million homes, at an average loss of $100,000/home (a very conservative number, I might add) and you get an idea of the magnitude of the problem.

Aren't they just following the lead of Wall Street?

No, the government.

Baldy wrote:

kalm wrote:
Aren't they just following the lead of Wall Street?

No, the government.

What's the diffference?

Col Hogan wrote:

kalm wrote:
Aren't they just following the lead of Wall Street?

Does that make it right???

No. But you gotta agree that it's a lot to ask of homeowners after they bailed out some serious institutional incompetence.

I just signed the contract on a FNMA foreclosure (2br 3ba condo for a rental property). FNMA is taking at least $100,000 loss on it.

This mentality is financially sound in the system as it is today. So was Bernie Madoff's investment strategy.

Bring morality into the picture and you have a different story. I could never just walk away from any debt I had. Ever.

kalm wrote:

Baldy wrote: No, the government.

What's the diffference?

Wall Street might have it's bad seeds, however... Aside from the military, the government is a catastrophic failure at everything it attempts.

AZGrizFan wrote: There ain't enough money in the US treasury to pay for this, folks...

Well then the geniuses that run the banks that run the Federal Reserve can just sell the U.S. Federal Government some more of it's own money back to them...



When does any of this get tracked back to our fraudulent banking system..?
Or are we just going to keep making note of the "symptoms" of the disease and continue to pretend that they are the problem...

Baldy wrote:

kalm wrote:
What's the diffference?

Wall Street might have it's bad seeds, however... Aside from the military, the government is a catastrophic failure at everything it attempts.

Wow - I feel stupider just reading that drivel.

If the Government is such a failure, how has it survived so long?

Many, many great achievements by the United States. Sorry you hate your country so much - try Somalia instead.

dbackjon wrote:

Baldy wrote: Wall Street might have it's bad seeds, however... Aside from the military, the government is a catastrophic failure at everything it attempts.

Wow - I feel stupider just reading that drivel.

If the Government is such a failure, how has it survived so long?

Many, many great achievements by the United States. Sorry you hate your country so much - try Somalia instead.

So, is that your excuse for the completely moronic...stupid...brainless...idiotic...stupefied...imbecilic remark about nationalizing the oil companies?

There have been many great accomplishments by the PEOPLE of the United States.

Baldy wrote:

dbackjon wrote:
Wow - I feel stupider just reading that drivel.

If the Government is such a failure, how has it survived so long?

Many, many great achievements by the United States. Sorry you hate your country so much - try Somalia instead.

So, is that your excuse for the completely moronic...stupid...brainless...idiotic...stupefied...imbecilic remark about nationalizing the oil companies?

There have been many great accomplishments by the PEOPLE of the United States.

Seizing BP would be one of the best things this country could do. BP only cares about greed, at the expense of OUR natural resources.

I feel sorry for the sad pathetic outlook you have about our country.

I like how guys like you hate the fact that businesses are in business to make money.

You think they should hand out sandwiches and kool-aid free of charge to everyone.



When you start a business the object is to make as much money as you can for your company, your family and or your shareholders. You see, people buy stock in your company to MAKE MONEY.......they wont buy it if you dont make them money.

BTW Gordon Gecko says hi.........greed is good.

Col Hogan wrote:

kalm wrote:
Aren't they just following the lead of Wall Street?

Does that make it right???

No, not right, but Cleets has a point. It's hard to tell what's right and wrong in the current environment. It seems that everyone EXCEPT the honest middle class worker who doesn't lie cheat and steal is being rewarded by the regime with unearned entitlements. Illegal aliens, employers of illegal aliens, irresponsible big money interests, foreign terrorist interests like Hamas, crappy car companies, unions, political activists and everyone else that does NOT contribute to productive, civil society is favored by Obama.

dbackjon wrote: Seizing BP would be one of the best things this country could do. BP only cares about greed, at the expense of OUR natural resources.

I feel sorry for the sad pathetic outlook you have about our country.

Your ignorance knows no bounds. Sad, really.

And how do you expect to "seize" BP? Invade Great Britain? Who and where next? The Netherlands and The Hague to "seize" Royal Dutch Shell? How very Hugo Chavez of you.

Do me a favor, dback....please name me one society that doesn't run off that evil "greed". Can you please explain the difference between the "greed" of BP and the "greed" of the US government? At least BP can pay its bills and isn't running up trillion dollar deficits.

Baldy wrote:

dbackjon wrote: Seizing BP would be one of the best things this country could do. BP only cares about greed, at the expense of OUR natural resources.

I feel sorry for the sad pathetic outlook you have about our country.

Your ignorance knows no bounds. Sad, really.

And how do you expect to "seize" BP? Invade Great Britain? Who and where next? The Netherlands and The Hague to "seize" Royal Dutch Shell? How very Hugo Chavez of you.

Do me a favor, dback....please name me one society that doesn't run off that evil "greed". Can you please explain the difference between the "greed" of BP and the "greed" of the US government? At least BP can pay its bills and isn't running up trillion dollar deficits.

BP cant pay to clean up the mess in the Gulf. In about a month, they will be asking the federal Government for help. Just Watch. I dont care if a company makes money, but dont screw up and act likes its not your fault.

mrklean wrote:

Baldy wrote: Your ignorance knows no bounds. Sad, really.

And how do you expect to "seize" BP? Invade Great Britain? Who and where next? The Netherlands and The Hague to "seize" Royal Dutch Shell? How very Hugo Chavez of you.

Do me a favor, dback....please name me one society that doesn't run off that evil "greed". Can you please explain the difference between the "greed" of BP and the "greed" of the US government? At least BP can pay its bills and isn't running up trillion dollar deficits.

BP cant pay to clean up the mess in the Gulf. In about a month, they will be asking the federal Government for help. Just Watch. I dont care if a company makes money, but dont screw up and act likes its not your fault.

The taxpayers shouldn't spend a dime until BP has spent their last dollar.

ALPHAGRIZ1 wrote:I like how guys like you hate the fact that businesses are in business to make money.

You think they should hand out sandwiches and kool-aid free of charge to everyone.



When you start a business the object is to make as much money as you can for your company, your family and or your shareholders. You see, people buy stock in your company to MAKE MONEY.......they wont buy it if you dont make them money.

BTW Gordon Gecko says hi.........greed is good.

Now the whole trick is how to get the US taxpayer to "socialize" the risk.

houndawg wrote:

mrklean wrote:
BP cant pay to clean up the mess in the Gulf. In about a month, they will be asking the federal Government for help. Just Watch. I dont care if a company makes money, but dont screw up and act likes its not your fault.

The taxpayers shouldn't spend a dime until BP has spent their last dollar.

On this point, we are in complete agreement...