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Today there was a bailout of Bear Stearns and it's executives (bankruptcy would have meant that Christmas bonuses had to be returned.)
This past week there were multiple bailouts for the VERY wealthy in Wall Street.
In MHO the moral case that the individual homeowner underwater in his Fl home has the moral obligation to continue to pay a mortgage for a property whose value is LESS than what he/she owes is an argument that no longer has any merit.
The market will not turn around any time soon, the payments are unbearable and a recession/depression is coming.
If these properties were put quickly back on the market, then the banks would have to come to realty that much quicker, investor would buy them as rentals.
These rentals would have to be cheap because the glut of rental properties would further drive down rental prices.
Property taxes in all of FL would come down faster as prices returned to their pre-bubble 1997-1999.
A good asset like a house should not be vandalized by those leaving nor should the bank leave it to rot with mold.
In MHO, act civilized, do not trash the place, walk with your head high and admit that there was SOME complicity on YOUR part (it was not ALL the banks' fault.)
Please do not flame. This is only MHO.
I'm not familiar with the term "underwater." Does that mean the property is worth less now than when you bought it? If that's what it means I don't understand what difference that would make to the homeowner who intends to live in the house indefinitely. If you're not looking to sell why should you care what value anyone puts on your house beside the tax assessor? I can see if you have to sell and you owe more than the home is worth that that would be a problem. Or if you bought the home as an investment and you are seeing your investment lose its value. But that's a risk you took. Just like investing in the stock market. There are no guarantees. On the other hand if you bought a house without the means to make the payments then that was pretty foolish, wouldn't you think? It seems like there can be many variables in the housing picture and one-size-fits-all solutions may create more problems than they solve.
some people trusted the financial system to keep them away from such a dissaster and they abused that trust and now middle class families are struggling. unless you are in that underwater situation where you cannot see possitive equity in about 25 yrs and or you have the threat of adjusting rates it will be hard for one to understand the complexities of this mess. i think one should evaluate thier situation on a case by case basis and if it does not make financial sense to keep the property hopefully after persueing all avenues to rectify the underwater problem ...as last resort is say walk away the banks have thier best iterest in mind you should have yours.....
So let me ask you this, if you buy a new car, drive it off the lot, do you stop making the payments? It loses value when you drive it off the lot too. Actually I'm glad people are walking away because I used to have the most obnoxious neighbors who bought at the height of the boom and now their long gone, good riddance.
some people trusted the financial system to keep them away from such a dissaster and they abused that trust and now middle class families are struggling. unless you are in that underwater situation where you cannot see possitive equity in about 25 yrs and or you have the threat of adjusting rates it will be hard for one to understand the complexities of this mess. i think one should evaluate thier situation on a case by case basis and if it does not make financial sense to keep the property hopefully after persueing all avenues to rectify the underwater problem ...as last resort is say walk away the banks have thier best iterest in mind you should have yours.....
Huh? Trust the financial system for a personal decision? How about not blaming anyone other than the person who actually wanted to borrow the money. They need to step up and say they made a mistake, no one else.
To every prson that thinks the banks should reduce principal because value went down, I ask- would you have paid more if the value went up? I haven't heard anyone agree to that.
This is a debate where 99 out of 100 people choose their side based on their situation..... Those who are currently upside-down (not underwater) with their ARMs getting ready to reset are mad at the banks, while those who financed a fixed rate and aren't in that bad of shape are saying "let the buyer beware"...
The truth, as in most things, is probably in the middle....
I mean c'mon Lily, it ain't that simple.... My 90 year old grandparents lost their home because banks took advantage of my Grandmother and got them into a reverse mortgage and then a cash out refi which they couldn't redo when their home value plummetted.... They went from having a house almost paid for, to being close to $300K upsidedown in it....
MANY banks have taken advantage of people that just don't know what they're doing.... Why is my 90 year old Grandmother making these decisions without help?? Easy, she was an adult who didn't ask for help in the decision so it couldn't be anyone else's business.....
Now on the flip side, I was talking to a lady at work last week who bought a $550K home at the peak with an ARM and now the house is worth about $350K and their ARM is getting ready to reset and they cannot finance out of it.... I don't know about her husband, but this lady has a Masters from Stanford so she can't be a complete idiot....
I hear her on the phone the other day talking about which cruise line she and her husband should take for their big trip this summer.....
So it really depends on circumstances before you vilify someone for the bad decision and making a decision on whether to walk away..... Our financial system needs to have more accountability for sure....
I dont think anyone is saying that the banks didnt use people but realistically speaking something which we are seeing very little of is people taking responsibility for their actions. If you take an adjustable mortgage you have to plan for a worse case scenario. If in that scenario you cant afford the home then you have no business buying. If the property market hadnt crashed but risen people would have sold their homes, made alot of money as many did in the boom years and been laughing all the way to the bank with a stack of cash in their back pocket.
The reality is these people took a risk. If your prepared to take the potential positives, then you should accept the negatives aswell. With respect to a 90yr old lady scenario, most people i know that age would speak to their family before making such a huge financial decision like that. Seems like their family wernt there to support them.
Why walk away? Because it is ridiculous and unamerican that buying a hojme is the largest and most important purchase the average person makes in their life. When people can no longer afford food and medical care because they need a roof over their head for themselves and their children, it makes no sense to be a slave to on a mortgage that will last 30+ years with obligations to pay ever increasing property taxes to the government that will last a life time, and if not paid, the government will sieze their home. The majority of people can no longer afford what our capitalistic and "all knowing" government has changed in regards to the basis living essentials of life. Not too long ago a person used to be able to stake out a piece of land, work the land by building a house for a set amount of years and it was theirs. Medical care used to be affordable. Now a family of four is forced to pay in in excess of $6,000 a year (almost 1/2 of income of a min. wage earner after taxes) for medical coverage only to have the insurance company deny coverage? Food and gasoline used to inexpensive. Last summer, a person on the minumum wage (which are government has set to provide the minimum essentials in life), was forced to spend 1/4 of their income to purchase gasoline just to commute to work. Little money is left for housing, health care and food, let alone ever-increasing utility costs, taxes, fee increases and mandated home insurance, etc., etc. Why in a world where the citizens of oil producing countries are paying 10 to 20 cents a gallon for gas, that we, the most most powerful nation in the country, are forced to pay 1,500% more and insist on giving away food to these countries when our own people are starving.
And who allowed this to happen? You, me, and every voter in America.
The system is broke. I pay 1,400% more than the first person who initially purchased my house in 1963. Ipay my mortgage and am able to simply because I undertook the effort to incure $80k in student loans to receive an education that afforded me a professional license. My wages have not, however, increased 1,400%. Instead wages, even for a professional, have increased approximately 300%. Where are people supposed to pick up the other 900% in wages needed to live the american dream?
Banks and Credit Card Companies are being purchased by larger banks who are changing rules and increasing fees without "real" notice to the customers who have little clout in defending themselves against absurd charges and interest rates that are suddenly implimented. In return banks customers receive little, if any, interest return on their life savings. Scamming and ponzi schemes are ramput. With the exception of Madoff, few see any real punishment, and even his wife getsto keep millions in ill-gotten gains. Government officals are on the take for theim selves or for those who supply the money to get them elected. Politicans place innoculate bills before the public eye while hiding the truly damaging legislation that is passed in favor of corporpoate profits. It used to be that charging interests rates of 18-22 % was illegal under the usuary laws. Now the government has given its blessing to lenders to go ahead and charge usuary rates. Of course, the media covers up these real issues by putting a fluff piece in the headline about some pop star dying in the headlines for weeks.
The AMA and FDA do their best to maintain a monopoly on pharmacuticals and medical treatment. The government suports these entities by making it a crime to provide medical treatment or distribute drugs without a license. Prisoners in the US receive better medical treatment than 40% of Americans.
People are becoming more and more reliant on the government, which has been proven over and over again in history is the ultimate goal of the government in establishing a class of persons who will work for, and obey, the government. Now, even FEMA is talking about taking foreclosed homes to house catastrophy victims. One the surface this may seem helpful and immaterial, but it is the start of government controlled housing for those who cannot afford to pay the government property taxes. More and more laws are being passed that impose the will of the government on the free will of the people. The Bill of Rights and Constitution have been stripped of their original intent with the only real right of the people now is not to be forced to house soldiers in their home. Just wait until the USA is attached on its own soil, and it will be again, that right will go right out the window in the interest of the government over the people. It will be called "national security" or some other BS.
Our founding fathers revolted against England for basically the same reasons we are going through now, high taxes, inappropriate government interferance, and restrictions of personal liberties. The Boston Tea Party was a statement that was noticed by England. Now, we have a President and politicans who publically laughed at the people for staging tea parties based upon the same reasons. And why do they now laugh? Because the government believes it is too powerful and the people are morons who need their guidance and help. Our founding fathers were labeled terrorists by the English government. The only reason they were not put to death is because they overthrew the English government.
The problem is much more than walking away from a house because a mortage payment can't be made. Owning a home used to be the American Dream. Unless you are a large corporation who scammed and cheated itself into huge profits, the individual receives little help - or maybe a $600 stimulus check. There is no bail out for the hard working common person, and never will be under the current regeme. Instead, the individual will be called upon to work harder and do with less for the sake of building a government who will decide what is best for the people. That dream has turned into a nightmare in more ways than one. America had a good run for the first 100 or so years . . .
Whilst your post is very interesting and does generate some very good points i would like to comment on the following.
In terms of gas prices America has had it good for a long time. Even at the high rates now UK gas prices are 3 times the price that they are here and have been that way for many years. The cost of living in the UK is also on the whole much higher than here in the US. That being said you hear people complaining there but although nothing gets done bills still get paid. The reason for the world wide economy turning south began here in the US with banks lending money to people who realistically had no business being accepted for a mortgage, and then in turn these notes being sold off to banks world wide.
Whilst your post is extremely though provoking and does raise some valid points, i think it is about time people stopped blaming everybody else and took some personal responsibility for the mess they are in instead of passing the buck.
Wages havent all of a sudden fallen to record lows. Gas prices here in the US have always been pretty volotile. These are not variables which have just occured and caught people by surprise. People knew how much money they were earning when the signed up for a mortgage and yet now act shocked that they cant afford their mortgage payments.
You are right though in terms of what you say about the government etc etc however, whilst this issue is totally subjective, in my opinion people should stop passing the buck blaming everything and anything for their problems and take a look in the mirror and recognise the mistakes they made, learn from them and move on.
Quote:
Originally Posted by Liberty911
Why walk away? Because it is ridiculous and unamerican that buying a hojme is the largest and most important purchase the average person makes in their life. When people can no longer afford food and medical care because they need a roof over their head for themselves and their children, it makes no sense to be a slave to on a mortgage that will last 30+ years with obligations to pay ever increasing property taxes to the government that will last a life time, and if not paid, the government will sieze their home. The majority of people can no longer afford what our capitalistic and "all knowing" government has changed in regards to the basis living essentials of life. Not too long ago a person used to be able to stake out a piece of land, work the land by building a house for a set amount of years and it was theirs. Medical care used to be affordable. Now a family of four is forced to pay in in excess of $6,000 a year (almost 1/2 of income of a min. wage earner after taxes) for medical coverage only to have the insurance company deny coverage? Food and gasoline used to inexpensive. Last summer, a person on the minumum wage (which are government has set to provide the minimum essentials in life), was forced to spend 1/4 of their income to purchase gasoline just to commute to work. Little money is left for housing, health care and food, let alone ever-increasing utility costs, taxes, fee increases and mandated home insurance, etc., etc. Why in a world where the citizens of oil producing countries are paying 10 to 20 cents a gallon for gas, that we, the most most powerful nation in the country, are forced to pay 1,500% more and insist on giving away food to these countries when our own people are starving.
And who allowed this to happen? You, me, and every voter in America.
The system is broke. I pay 1,400% more than the first person who initially purchased my house in 1963. Ipay my mortgage and am able to simply because I undertook the effort to incure $80k in student loans to receive an education that afforded me a professional license. My wages have not, however, increased 1,400%. Instead wages, even for a professional, have increased approximately 300%. Where are people supposed to pick up the other 900% in wages needed to live the american dream?
Banks and Credit Card Companies are being purchased by larger banks who are changing rules and increasing fees without "real" notice to the customers who have little clout in defending themselves against absurd charges and interest rates that are suddenly implimented. In return banks customers receive little, if any, interest return on their life savings. Scamming and ponzi schemes are ramput. With the exception of Madoff, few see any real punishment, and even his wife getsto keep millions in ill-gotten gains. Government officals are on the take for theim selves or for those who supply the money to get them elected. Politicans place innoculate bills before the public eye while hiding the truly damaging legislation that is passed in favor of corporpoate profits. It used to be that charging interests rates of 18-22 % was illegal under the usuary laws. Now the government has given its blessing to lenders to go ahead and charge usuary rates. Of course, the media covers up these real issues by putting a fluff piece in the headline about some pop star dying in the headlines for weeks.
The AMA and FDA do their best to maintain a monopoly on pharmacuticals and medical treatment. The government suports these entities by making it a crime to provide medical treatment or distribute drugs without a license. Prisoners in the US receive better medical treatment than 40% of Americans.
People are becoming more and more reliant on the government, which has been proven over and over again in history is the ultimate goal of the government in establishing a class of persons who will work for, and obey, the government. Now, even FEMA is talking about taking foreclosed homes to house catastrophy victims. One the surface this may seem helpful and immaterial, but it is the start of government controlled housing for those who cannot afford to pay the government property taxes. More and more laws are being passed that impose the will of the government on the free will of the people. The Bill of Rights and Constitution have been stripped of their original intent with the only real right of the people now is not to be forced to house soldiers in their home. Just wait until the USA is attached on its own soil, and it will be again, that right will go right out the window in the interest of the government over the people. It will be called "national security" or some other BS.
Our founding fathers revolted against England for basically the same reasons we are going through now, high taxes, inappropriate government interferance, and restrictions of personal liberties. The Boston Tea Party was a statement that was noticed by England. Now, we have a President and politicans who publically laughed at the people for staging tea parties based upon the same reasons. And why do they now laugh? Because the government believes it is too powerful and the people are morons who need their guidance and help. Our founding fathers were labeled terrorists by the English government. The only reason they were not put to death is because they overthrew the English government.
The problem is much more than walking away from a house because a mortage payment can't be made. Owning a home used to be the American Dream. Unless you are a large corporation who scammed and cheated itself into huge profits, the individual receives little help - or maybe a $600 stimulus check. There is no bail out for the hard working common person, and never will be under the current regeme. Instead, the individual will be called upon to work harder and do with less for the sake of building a government who will decide what is best for the people. That dream has turned into a nightmare in more ways than one. America had a good run for the first 100 or so years . . .
I know a man who is walking away from his condo on purpose and letting it go into foreclosure. Sinking money into a money pit he calls it. He is going to rent instead. He is young and said his credit will be back in 10 years anyway.
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