[Spring Hillian]

I would think so.

Originally Posted by kiggy

Isn't it the buyer's responsibility to figure out what he can afford and what he can't? Give me a break.

[Spring Hillian]

The bank does not sign at closing. The buyer does.

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Originally Posted by NowSoFlorida

No they bought the house from a person. The bank actually buys the house and they own it until you sell it or pay it off.

Banks were loaning money to people who couldn't pay it back (and for more than the house was worth) , they figured the house was collateral. And it was, take it back but you loaned out much more than it was worth and you eat the loss.

[Mr. Maryland]

The bank agrees, by placing a lien and extending credit based on the house as their asset as collateral, to take possession of the home and own it in the event of default. If the bank did not want to possibly own a home, they should have done their research on the borrower and not extended credit in the first place.

No one forced them to extend credit, and no one forced them to accept the home as collateral in the event of default.

[valicky]

Originally Posted by Mr. Maryland

The bank agrees, by placing a lien and extending credit based on the house as their asset as collateral, to take possession of the home and own it in the event of default. If the bank did not want to possibly own a home, they should have done their research on the borrower and not extended credit in the first place.

No one forced them to extend credit, and no one forced them to accept the home as collateral in the event of default.

What research should the bank have done on the OP? He CAN pay his mortgage - he just changed his mind about doing so and simply stopped. The bank didn't mess up by giving him a mortgage. We're not talking here about bad credit risks and giving people loans who couldn't afford it. I'm not sure why some here are having a hard time grasping that the OP has the money to pay. He's not paying because he doesn't want to, not because he can't.

[Mr. Maryland]

Originally Posted by valicky

What research should the bank have done on the OP? He CAN pay his mortgage - he just changed his mind about doing so and simply stopped. The bank didn't mess up by giving him a mortgage. We're not talking here about bad credit risks and giving people loans who couldn't afford it. I'm not sure why some here are having a hard time grasping that the OP has the money to pay. He's not paying because he doesn't want to, not because he can't.

Should have done a better credit/risk assessment. They (the bank) should have done their due diligence and researched the effect of deregulated derivative trading and relaxed credit standards on the housing market, and their obvious effect on future home values.

Had they done so, they may have foreseen the housing crash they were creating in the first place, and wisely decided that it was not a good risk on their part to lend under such circumstances. After all, it comes back to who ultimately controls the financing, and that is the bank. Had the bank simply said "no, bad risk", neither party would be in the position they are currently in. The bank gives the final stamp of approval, they are the speculators.

[kiggy]

Originally Posted by Mr. Maryland

The bank agrees, by placing a lien and extending credit based on the house as their asset as collateral, to take possession of the home and own it in the event of default. If the bank did not want to possibly own a home, they should have done their research on the borrower and not extended credit in the first place.

No one forced them to extend credit, and no one forced them to accept the home as collateral in the event of default.

How on earth can the bank predict if a person will "strategically default" on a mortgage? Trust me, in this market they put you through the wringer looking into your financials before they even prequalify you.

[kiggy]

Originally Posted by Mr. Maryland

Should have done a better credit/risk assessment. They (the bank) should have done their due diligence and researched the effect of deregulated derivative trading and relaxed credit standards on the housing market, and their obvious effect on future home values.

Had they done so, they may have foreseen the housing crash they were creating in the first place, and wisely decided that it was not a good risk on their part to lend under such circumstances. After all, it comes back to who ultimately controls the financing, and that is the bank. Had the bank simply said "no, bad risk", neither party would be in the position they are currently in. The bank gives the final stamp of approval, they are the speculators.

That's just plain dumb. Like I said, they put you through the wringer, but they can't read your mind. Or predict someone's character. Unfortunately. I think you're referring to the pre-2008 climate where Donald Duck could get a mortgage with no money down. That climate is long gone. This guy's trying to default today. This guy is just a dirtbag. Can't always prevent that.

[Spring Hillian]

Character, or lack thereof, is the essence of the entire matter here.

Originally Posted by kiggy

That's just plain dumb. Like I said, they put you through the wringer, but they can't read your mind. Or predict someone's character. Unfortunately. I think you're referring to the pre-2008 climate where Donald Duck could get a mortgage with no money down. That climate is long gone. This guy's trying to default today. This guy is just a dirtbag. Can't always prevent that.

[Mr. Maryland]

Ah, so the banks have no expectation of reading the market, however the buyer...

Sure, ok then..

[Mr. Maryland]

Originally Posted by kiggy

How on earth can the bank predict if a person will "strategically default" on a mortgage? Trust me, in this market they put you through the wringer looking into your financials before they even prequalify you.

"In this market".

Interesting qualifier. How about markets past? Say, 2002 thru 2006?