hno:The whole idea of walking away from one's real estate liabilty is going to make the real estate crash even worse then the disaster it already is. Even people with good credit will walk away as who wants to be the sucker paying into a 400k morgage on a house worth 300k and falling.
A tipping point? "Foreclose me ... I'll save money"
January 23, 2008
A homeowner who can't sell his house tells the L.A.Times, "Foreclose me. ... I'll live in the house for free for 12 months, and I'll save my money and I'll move on."
Banks and lenders fear this kind of thinking -- that walking away from a house could be the smart economic move -- appears to be on the rise. Wachovia, in a conference call yesterday, warned investors that increasing numbers of homeowners are walking away from their homes by choice: "... people that have otherwise had the capacity to pay, but have basically just decided not to because they feel like they've lost equity, value in their properties..."
Calculated Risk notes this is "one of the greatest fears for lenders ... that it will become socially acceptable for upside down middle class Americans to walk away from their homes."
A commenter on L.A. Land this morning writes, "I am one of these people. My condo has dropped in value from $520K in 5/06 when I bought it to $350K now. My ARM payment will probably go up $900 per month in June.
"Despite all this, I would be willing to stay if the bank would refi the loans to a 30 year fixed, but since I'm not a 'hardship' case they'd apparently rather foreclose. I guess the only way I could qualify for loan mitigation is to get my boss to fire me, stop making payments, and wreck my credit. In fact, my bank won't even talk to me until I miss a couple of payments.
"I have purchased a cheaper place in a nearby area now, while my credit is good, and will stop making payments on house #1 after house #2 closes. I know the foreclosure will be on my credit for 7 years, but I will have saved a lot of money.
"I realize I agreed to the deal when I signed the mortgage papers, but I am within my rights to walk away from a bad deal and suffer the consequences, just as many corporations write down billions of dollars of debt, lose money for their shareholders, and lay off people as a result of their bad decisions.
"I don't really understand why people view a business decision by a homeowner as a terrible moral lapse. However, when large lending institutions, with access to more sophisticated information than any consumer could imagine, make mistakes affecting thousands of people worldwide, they are not excoriated and vilified with the same righteous zeal."
http://latimesblogs.latimes.com/lala...ing-point.html
A tipping point? "Foreclose me ... I'll save money"
January 23, 2008
A homeowner who can't sell his house tells the L.A.Times, "Foreclose me. ... I'll live in the house for free for 12 months, and I'll save my money and I'll move on."
Banks and lenders fear this kind of thinking -- that walking away from a house could be the smart economic move -- appears to be on the rise. Wachovia, in a conference call yesterday, warned investors that increasing numbers of homeowners are walking away from their homes by choice: "... people that have otherwise had the capacity to pay, but have basically just decided not to because they feel like they've lost equity, value in their properties..."
Calculated Risk notes this is "one of the greatest fears for lenders ... that it will become socially acceptable for upside down middle class Americans to walk away from their homes."
A commenter on L.A. Land this morning writes, "I am one of these people. My condo has dropped in value from $520K in 5/06 when I bought it to $350K now. My ARM payment will probably go up $900 per month in June.
"Despite all this, I would be willing to stay if the bank would refi the loans to a 30 year fixed, but since I'm not a 'hardship' case they'd apparently rather foreclose. I guess the only way I could qualify for loan mitigation is to get my boss to fire me, stop making payments, and wreck my credit. In fact, my bank won't even talk to me until I miss a couple of payments.
"I have purchased a cheaper place in a nearby area now, while my credit is good, and will stop making payments on house #1 after house #2 closes. I know the foreclosure will be on my credit for 7 years, but I will have saved a lot of money.
"I realize I agreed to the deal when I signed the mortgage papers, but I am within my rights to walk away from a bad deal and suffer the consequences, just as many corporations write down billions of dollars of debt, lose money for their shareholders, and lay off people as a result of their bad decisions.
"I don't really understand why people view a business decision by a homeowner as a terrible moral lapse. However, when large lending institutions, with access to more sophisticated information than any consumer could imagine, make mistakes affecting thousands of people worldwide, they are not excoriated and vilified with the same righteous zeal."
http://latimesblogs.latimes.com/lala...ing-point.html
only near term fix at this point is to rejuvenate credit lines, tax those that are prudent and have savings and a steady job out the ass, and inflate everything out the ass
so we can try help out those that lived beyond their means and created this situation we now have
long term this does no good as those that are smart, savers, and good citzens learn that the system is just fucking them over, why be a productive member of society that doesn't spend like a maniac when in the end your just gonna end up bailing out others and giving lots of the fruits of your labors to big government
granted the people themselves aren't fully to blame so are those that laid on the debt bait (the fed with artificially low interest rates at 1% after the tech bubble collapsed as well as all the lenders and banks)
but at the same time you have to have somebody taking the bait so everybody in the end is to blame
all this blame game crap has to stop
people need to start taking on individual responsibility for their own shit and stop looking for fingers to point at as to why they are where they are, start living within their means, being prudent with their spending habits, this is the main reason our country is rotting to its core
so we can try help out those that lived beyond their means and created this situation we now have
long term this does no good as those that are smart, savers, and good citzens learn that the system is just fucking them over, why be a productive member of society that doesn't spend like a maniac when in the end your just gonna end up bailing out others and giving lots of the fruits of your labors to big government
granted the people themselves aren't fully to blame so are those that laid on the debt bait (the fed with artificially low interest rates at 1% after the tech bubble collapsed as well as all the lenders and banks)
but at the same time you have to have somebody taking the bait so everybody in the end is to blame
all this blame game crap has to stop
people need to start taking on individual responsibility for their own shit and stop looking for fingers to point at as to why they are where they are, start living within their means, being prudent with their spending habits, this is the main reason our country is rotting to its core
tiz & steam, bud has been around these forums quite a while.
he isnt like his classmates and isnt a rube like most people that believe everything they read and are told.
he just posted what his classmates think about the market...i doubt he agrees with his classmates.
most of them will become the next flock of sheep working on wall street and giving lousy advice more often than useful advice.
like eek, most of buds classmates will be buying gold, someday....thats when we will sell or will have already sold.
he isnt like his classmates and isnt a rube like most people that believe everything they read and are told.
he just posted what his classmates think about the market...i doubt he agrees with his classmates.
most of them will become the next flock of sheep working on wall street and giving lousy advice more often than useful advice.
like eek, most of buds classmates will be buying gold, someday....thats when we will sell or will have already sold.
I agree that it will hurt the economy. Some would argue that the economy needs to get very bad before it gets better, inspiring fundamental change. On the other hand, people who just walk away likely will not learn their lesson, hurting the chances of fundamental change.
Add*
2 News stations are supposed to be airing hard hitting pieces which criticize debtors and offers tips on how to improve. CNBC and NBC will be airing the reports. The CNBC story gets after this one girl who was trying to push blame onto others.
those in massive debt will learn their lesson one day
right now the fed and congress attempting to push off their judgement day a little while longer
will it work or won't it? i personally think it won't as the problem is just to big at this point and there aren't many sheep left at this point to sheer (enslave them in debt)....maybe i'm wrong
they must find a way to keep the american consumption debt games going in order to keep things going
regardless if it does work, it will only make the problem that much worse down the road if it indeed keeps us afloat for a few more years or whatever
the more they intervene and try to keep the ship afloat the higher the probability of depression or something along those lines gets, intervention does not fix anything long term, its only a short term band-aid
Personal story to share, on the news here... the Station here in Birmingham, in interviewing people about candidates' education plans, just had a quote from a woman who felt that they "needed to have different student loans, ones that you don't have to pay back." Nice to see her education was well worth it.
by the way they intervened after the tech bubble collapse
it was never allowed to fully deflate that bull market (of the past 5 years) began at valuations above any in the history of US markets
this was done by waging BS wars, creating big government programs like FEMA and homeland security, increasing our deficit to 9 trillion while cutting taxes so we could keep more of our own money to by ipods and other crap, and also allowed the debt/housing bubble be created with artificially low interest rates for too long
they just keep bubble creating trying to push off the end game, is the end game playing out now?
or can they find new bubbles, or rejuvinate old ones?
that's the question
long term it really doesn't matter its gonna end badly the sooner it comes the less painful it will be for everybody
it was never allowed to fully deflate that bull market (of the past 5 years) began at valuations above any in the history of US markets
this was done by waging BS wars, creating big government programs like FEMA and homeland security, increasing our deficit to 9 trillion while cutting taxes so we could keep more of our own money to by ipods and other crap, and also allowed the debt/housing bubble be created with artificially low interest rates for too long
they just keep bubble creating trying to push off the end game, is the end game playing out now?
or can they find new bubbles, or rejuvinate old ones?
that's the question
long term it really doesn't matter its gonna end badly the sooner it comes the less painful it will be for everybody
they are trying no doubt
with tax rebates, dems ready to socialize us to death come next year, and ben cutting rates like a madman
the question is what is the bubble gonna be? is there one? i don't know the answers to those questions
well my guess is it won't be effective and/or there won't be one (reason i'm quite short on the equity markets)
but we shall see how it plays out
obviously those behind the scenes (that know we are in a bad place) are freaked out to no end the intervention in rate cuts, tax rebates, and congress rhetoric
is way more early and aggressive than the 2000-2002 period and we just began to fall
keep that stuff coming
the art of the fade is alive and well over here
tiz - I was pumped up after you posted PEP down 10% AH, but checked & only down 1%...I was hoping to buy more
quite a uranium selloff today. the more it goes down the more i'll buy. more than happy to chase them down to zero
keep that stuff coming
the art of the fade is alive and well over here
tiz - I was pumped up after you posted PEP down 10% AH, but checked & only down 1%...I was hoping to buy more
quite a uranium selloff today. the more it goes down the more i'll buy. more than happy to chase them down to zero
Haha, yep. spent a large portion of class today looking at some uranium mining co's.
Interesting
What does everyone think of this article? http://globaleconomicanalysis.blogspot.com/2008/01/bank-reserves-go-negative.html
The shocking element to me was the first chart. Bank reserves very negative. I'm not an expert on banks, so discussion of this could help me learn some for sure.
What does everyone think of this article? http://globaleconomicanalysis.blogspot.com/2008/01/bank-reserves-go-negative.html
The shocking element to me was the first chart. Bank reserves very negative. I'm not an expert on banks, so discussion of this could help me learn some for sure.
keep that stuff coming
the art of the fade is alive and well over here
tiz - I was pumped up after you posted PEP down 10% AH, but checked & only down 1%...I was hoping to buy more
quite a uranium selloff today. the more it goes down the more i'll buy. more than happy to chase them down to zero
i wasn't talking about PEP (pepsi's food side)
PBG (the bottling group) was down 10% today in regular trading after earnings in the morning, their carbonated beverage end of things doing bad
they split in two at some point i guess
PEP the pepsi food stuff
PBG the pepsi drink stuff
