Walk Away?

[AZGrizFan]

I'm not arguing for Goldman Sachs, Deutsche Bank, BofA, Chase, Wells Fargo, ING, or the like. The government has already proven beyond a shadow of a doubt they'll not let those folks fail.

But there's not enough money in the government to fund an insurance fund if people en-masse start bailing on mortgages at the local bank level...and believe me, much like the folks on this board have proven time and again, there is VERY little (if any) difference seen between local community banks and CU's and the large, greedy, slimy, behemoths of the world.

[ASUG8]

Upon further review the main thing the article didn't address is the millions of people who bought when the market was in balance, had affordable mortgages, but chose to cash out the equity when values were inflated by either refinancing or taking out second mortgages/equity lines and are now walking away because the value is tanked.

You'd be amazed at the number distressed properties out there where this is exacty the case. In this case the mortgagor is stealing from the lender, there's no other way to put it, and should be subject to either a default judgment (which would need to paid and a satisfaction issued and recorded in order to purchase another home) or 1099's issued by the mortgagee and enforced by the IRS.

It's all a paper profit/loss until you're about to sell - AZ and I talked a bit about my situation where I have a piece of investment property that I bought near the peak of the market. I had a brief paper profit and now I'm underwater, but it really doesn't matter because the market will swing one way or the other before I'm ready to sell. I'm in AZ's camp where you honor your contract for as long as you can - If you have a 795 FICO and do a strategic walkaway from a contractual commitment then you're a POS in my book - I'd be afraid to have a beer with you or buy a car from you for fear that you'd screw me somehow.
/rant

[kalm]

Upon further review the main thing the article didn't address is the millions of people who bought when the market was in balance, had affordable mortgages, but chose to cash out the equity when values were inflated by either refinancing or taking out second mortgages/equity lines and are now walking away because the value is tanked.

You'd be amazed at the number distressed properties out there where this is exacty the case. In this case the mortgagor is stealing from the lender, there's no other way to put it, and should be subject to either a default judgment (which would need to paid and a satisfaction issued and recorded in order to purchase another home) or 1099's issued by the mortgagee and enforced by the IRS.

It's all a paper profit/loss until you're about to sell - AZ and I talked a bit about my situation where I have a piece of investment property that I bought near the peak of the market. I had a brief paper profit and now I'm underwater, but it really doesn't matter because the market will swing one way or the other before I'm ready to sell. I'm in AZ's camp where you honor your contract for as long as you can - If you have a 795 FICO and do a strategic walkaway from a contractual commitment then you're a POS in my book - I'd be afraid to have a beer with you or buy a car from you for fear that you'd screw me somehow.
/rant

I think I can see that logic if the local/community bank or credit union is the originator of the loan and still posseses the loan. It's a much bigger conundrum for most folks to intentionally walk away when you're screwing "Bob the loan officer at the locally owned bank down the street who's son is on your son's soccer team".

But when the loans become securitized and/or when Bob plays sells your loan to B of A as a business decision to make a buck, then isn't Bob implicated as well. I think in that instance, all bets are off and all is fair. I wonder how much of this crap that scenario pertains to.

[OL FU]

Upon further review the main thing the article didn't address is the millions of people who bought when the market was in balance, had affordable mortgages, but chose to cash out the equity when values were inflated by either refinancing or taking out second mortgages/equity lines and are now walking away because the value is tanked.

You'd be amazed at the number distressed properties out there where this is exacty the case. In this case the mortgagor is stealing from the lender, there's no other way to put it, and should be subject to either a default judgment (which would need to paid and a satisfaction issued and recorded in order to purchase another home) or 1099's issued by the mortgagee and enforced by the IRS.

It's all a paper profit/loss until you're about to sell - AZ and I talked a bit about my situation where I have a piece of investment property that I bought near the peak of the market. I had a brief paper profit and now I'm underwater, but it really doesn't matter because the market will swing one way or the other before I'm ready to sell. I'm in AZ's camp where you honor your contract for as long as you can - If you have a 795 FICO and do a strategic walkaway from a contractual commitment then you're a POS in my book - I'd be afraid to have a beer with you or buy a car from you for fear that you'd screw me somehow.
/rant

There are significant differences in situations. Dealing with Friends is one thing. Entering into a loan with the idea of defaulting in the near future is one thing. Also, if your credit score is through the roof and you don't want to ruin it you should certainly play in the game as long as you can.


The point is the bank lends the money to your for commerical reasons. People tend to pay a mortgage as long as they can because it is their home and that is intrinsic value. But once someone looks at whether they should walk away, they should not consider it a moral issue.

[Pwns]

Everything will be okay. People will walk away from their mortgages en masse, and the federal government will reach into it's magic vault of infinite money and bail out any megabanks that might be harmed by it.

[Chizzang]

It's all a paper profit/loss until you're about to sell - AZ and I talked a bit about my situation where I have a piece of investment property that I bought near the peak of the market. I had a brief paper profit and now I'm underwater, but it really doesn't matter because the market will swing one way or the other before I'm ready to sell. I'm in AZ's camp where you honor your contract for as long as you can - If you have a 795 FICO and do a strategic walkaway from a contractual commitment then you're a POS in my book - I'd be afraid to have a beer with you or buy a car from you for fear that you'd screw me somehow.
/rant

There are significant differences in situations. Dealing with Friends is one thing. Entering into a loan with the idea of defaulting in the near future is one thing. Also, if your credit score is through the roof and you don't want to ruin it you should certainly play in the game as long as you can.


The point is the bank lends the money to your for commerical reasons. People tend to pay a mortgage as long as they can because it is their home and that is intrinsic value. But once someone looks at whether they should walk away, they should not consider it a moral issue.

This is exactly why we've got a broken system...
We apply morality to individuals only - where corporations are seen as something entirely different
Yet, corporations have more rights and less accountability than any citizen in this country

Other than not being able to vote - which they have side stepped that disadvantage through HUGE lobby money and campaign fraud (I mean funding) we have a country now where EVERY American citizen should do 3 things

1) Read incorporating = Carl R. J. Sniffen
2) Read the capitalist corporate handbook / Understanding profit
3) Become incorporated



There is absolutely no reason why any American Citizen should be more accountable than AIG or BP or Bank of America, we should all run our personal finances exactly like they do...

[AZGrizFan]

There are significant differences in situations. Dealing with Friends is one thing. Entering into a loan with the idea of defaulting in the near future is one thing. Also, if your credit score is through the roof and you don't want to ruin it you should certainly play in the game as long as you can.


The point is the bank lends the money to your for commerical reasons. People tend to pay a mortgage as long as they can because it is their home and that is intrinsic value. But once someone looks at whether they should walk away, they should not consider it a moral issue.

This is exactly why we've got a broken system...
We apply morality to individuals only - where corporations are seen as something entirely different
Yet, corporations have more rights and less accountability than any citizen in this country

Other than not being able to vote - which they have side stepped that disadvantage through HUGE lobby money and campaign fraud (I mean funding) we have a country now where EVERY American citizen should do 3 things

1) Read incorporating = Carl R. J. Sniffen
2) Read the capitalist corporate handbook / Understanding profit
3) Become incorporated



There is absolutely no reason why any American Citizen should be more accountable than AIG or BP or Bank of America, we should all run our personal finances exactly like they do...

The fact that they DO it doesn't make it right.

[Chizzang]

The fact that they DO it doesn't make it right.

Oh, I'm sorry are we having a moral argument, you know God and the Devil and perception of right and wrong..?
Because I thought we were talking about "business"

[kalm]

The fact that they DO it doesn't make it right.

Oh, I'm sorry are we having a moral argument, you know God and the Devil and perception of right and wrong..?
Because I thought we were talking about "business"

Z, you are no longer a member of the free market team.

[JohnStOnge]

All other things aside, you do hurt your neighbors if you walk away on your mortgage. As a practical matter, you do contribute to making their property values go down. At least that's what I've picked up from listening to my wife as she operates as a realtor. And she's wasn't saying that for political reasons. She's just doing business.

Two or three or four or five or whatever wrongs don't make a right. If you agree to terms it is wrong for you to violate that agreement unless you have absolutely no choice...unless you are absoulteyl physically incapable of honoring the agreement. And that fact or allegation that somebody else did something wrong doesn't make it any less wrong for you to do otherwise.

[93henfan]

FNMA is pushing to have the window for qualifying for a new mortgage after a strategic default pushed out to seven years... I don't know if it will come to fruition but it is under consideration.

That's why I'd buy a second home at the depressed price before walking from my current overmortgaged home.

I'm not close to doing that, but it is pretty disturbing to know that the house I bought three years ago is now worth probably $50K less than I paid for it, looking at recent sales.

As CID1990 discussed, I went with the 30-year fixed so I didn't have any surprises. My employment is about as safe as any, so I don't foresee ever not being able to make payments.

BUT, in a purely capitalist environment, I will keep a close eye on opportunity costs. If the market ever got so bad that I could buy my same house for half, I'd be a fool not to go ahead and do it and let my lender figure out what to do with this current abode I'm typing from.

If it's OK for Morgan Stanley to walk away from multi-million dollar mortgages as a calculated business decision, why shouldn't I be able to walk away on a much, much smaller scale? What's good for the goose...

Go ahead and hope that I burn in hell. I'm sure they'll be turning the semi-ethical folks away so they can roast the bankers, murderers, and child molesters first.

[Chizzang]

Oh, I'm sorry are we having a moral argument, you know God and the Devil and perception of right and wrong..?
Because I thought we were talking about "business"

Z, you are no longer a member of the free market team.

Note:
Republicans are all about Free Market Capitalism - right up until it negatively effects them...
Then it's about Honor and Morality





Don't go flying off the handle AZ, I'm just effin' with you

[AZGrizFan]

Oh, I'm sorry are we having a moral argument, you know God and the Devil and perception of right and wrong..?
Because I thought we were talking about "business"

Z, you are no longer a member of the free market team.

Our entire system used to be built on a mans word and his handshake.

I'm glad you find the collapse of that so amusing.

[houndawg]

Z, you are no longer a member of the free market team.

Our entire system used to be built on a mans word and his handshake.

I'm glad you find the collapse of that so amusing.

Don't go give yourself the vapors yearning for a bygone time that never was, Z. I've done business with other individuals on a handshake but the system has never worked that way in my experience.

[kalm]

Z, you are no longer a member of the free market team.

Our entire system used to be built on a mans word and his handshake.

I'm glad you find the collapse of that so amusing.

No, I find that tragic. And if I was in your industry with your insight, I'd be even more pissed.

But sometimes you've got to laugh. And the way Chizzang has owned you on this thread makes me laugh.

[native]

Our entire system used to be built on a mans word and his handshake.

I'm glad you find the collapse of that so amusing.

Don't go give yourself the vapors yearning for a bygone time that never was, Z. I've done business with other individuals on a handshake but the system has never worked that way in my experience.

In the cattle business in large parts of the midwest and west, business worked on a handshake for about a nundred years.

[dbackjon]

Z, you are no longer a member of the free market team.

Our entire system used to be built on a mans word and his handshake.

I'm glad you find the collapse of that so amusing.

And it was WALL STREET that collapsed that system, not the average Joe.

[Chizzang]

Don't go give yourself the vapors yearning for a bygone time that never was, Z. I've done business with other individuals on a handshake but the system has never worked that way in my experience.

In the cattle business in large parts of the midwest and west, business worked on a handshake for about a nundred years.

That's certainly possible - I have no idea about the cattle industry
but at the exact same time the cattle business was working on a handshake the Steele, Railroad, shipping and lumber industries were a cut throat business populated by very successful liars and dishonorable thieves

And that's what built America... not AZ's imaginary hand shake era

We are living today in an exactly what we made for ourselves, to believe that entire industries were based on honor is an overly romantic and wildly dangerous form of nostalgia that I cannot subscribe to... Sure there are "examples" of hand shake and honor overriding business ethic etc. etc. but that's not how this country was built

It took hard men to make hard deals and drive their industries at satan's whip 24/7/365 to get this nation forged and the Federal Government sided with big business as a necessity "to get things done" "Progress"

It's not EVIL or WRONG... it's just how a nation gets made
The present day business climate is a residual artifact of previous standard practices, in other words the forge was cast long ago, today we're simply living in it

[mrklean]

I'm Currently upside down my self. When I bought my home in 2003, its was 144k. in 2005 my value of my home was up too 164k. Now my home is worth 82k and I own 124k. I did all the right things never ever have I been late on a payment and this happened to me. But I will not walk away from my home. To date I've put over 20k upgrades into my home. There's enough blame to go around, but in the end its pointless. The Banks like the Oil companies run this country!!!!

[93henfan]

In the cattle business in large parts of the midwest and west, business worked on a handshake for about a nundred years.

That's certainly possible - I have no idea about the cattle industry
but at the exact same time the cattle business was working on a handshake the Steele, Railroad, shipping and lumber industries were a cut throat business populated by very successful liars and dishonorable thieves

And that's what built America... not AZ's imaginary hand shake era

We are living today in an exactly what we made for ourselves, to believe that entire industries were based on honor is an overly romantic and wildly dangerous form of nostalgia that I cannot subscribe to... Sure there are "examples" of hand shake and honor overriding business ethic etc. etc. but that's not how this country was built

It took hard men to make hard deals and drive their industries at satan's whip 24/7/365 to get this nation forged and the Federal Government sided with big business as a necessity "to get things done" "Progress"

It's not EVIL or WRONG... it's just how a nation gets made
The present day business climate is a residual artifact of previous standard practices, in other words the forge was cast long ago, today we're simply living in it

Let's not forget that our first handshake deal was with Native Americans.

[mrklean]

That's certainly possible - I have no idea about the cattle industry
but at the exact same time the cattle business was working on a handshake the Steele, Railroad, shipping and lumber industries were a cut throat business populated by very successful liars and dishonorable thieves

And that's what built America... not AZ's imaginary hand shake era

We are living today in an exactly what we made for ourselves, to believe that entire industries were based on honor is an overly romantic and wildly dangerous form of nostalgia that I cannot subscribe to... Sure there are "examples" of hand shake and honor overriding business ethic etc. etc. but that's not how this country was built

It took hard men to make hard deals and drive their industries at satan's whip 24/7/365 to get this nation forged and the Federal Government sided with big business as a necessity "to get things done" "Progress"

It's not EVIL or WRONG... it's just how a nation gets made
The present day business climate is a residual artifact of previous standard practices, in other words the forge was cast long ago, today we're simply living in it

Let's not forget that our first handshake deal was with Native Americans.

[kalm]

That's certainly possible - I have no idea about the cattle industry
but at the exact same time the cattle business was working on a handshake the Steele, Railroad, shipping and lumber industries were a cut throat business populated by very successful liars and dishonorable thieves

And that's what built America... not AZ's imaginary hand shake era

We are living today in an exactly what we made for ourselves, to believe that entire industries were based on honor is an overly romantic and wildly dangerous form of nostalgia that I cannot subscribe to... Sure there are "examples" of hand shake and honor overriding business ethic etc. etc. but that's not how this country was built

It took hard men to make hard deals and drive their industries at satan's whip 24/7/365 to get this nation forged and the Federal Government sided with big business as a necessity "to get things done" "Progress"

It's not EVIL or WRONG... it's just how a nation gets made
The present day business climate is a residual artifact of previous standard practices, in other words the forge was cast long ago, today we're simply living in it

Let's not forget that our first handshake deal was with Native Americans.

to both of ya.

[Grizalltheway]

I'll save native the trouble: you guys are just freedom-hating commies.

[mrklean]

I'll save native the trouble: you guys are just freedom-hating commies.

From the words of a closed minded REPUKE!!!!!!

[Chizzang]

I'll save native the trouble: you guys are just freedom-hating commies.

You forgot: Who aren't as smart as he is... and can't see what he sees