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It's beyond ironic to call someone irresponsible for walking away from a mortgage in light of the malfeasance and fraud committed by the mortgage industry, esp. against the hapless CMO buyers who have nothing to show for their investment but a steaming bag of toxic excrement for which there is no market. To lay the burden and blame on the mortgage walker for the impact on the community is ironic to the 9th power.
Quote:
Originally Posted by Daddys///M3
However, I will say that if your friend is considering walking away because they feel slighted that they are upside down (no money down will do that to you) and the lender will not allow them to modify their loan terms to a lower rate, and not because they are in any imminent danger of default or foreclosure, then I think that your friend is very irresponsible and selfish. Although they will feel the reprecussions temporarily, the community will deal with it a little more long term and the reprecussions will be widespread.
It's beyond ironic to call someone irresponsible for walking away from a mortgage in light of the malfeasance and fraud committed by the mortgage industry, esp. against the hapless CMO buyers who have nothing to show for their investment but a steaming bag of toxic excrement for which there is no market. To lay the burden and blame on the mortgage walker for the impact on the community is ironic to the 9th power.
No one held a gun to their head. Not saying there wasn't unethical even fraudulent behavior on the part of the lenders, but the buyer deserves plenty of blame for not taking the steps to fully educate themselves.
We'd be unsympathetic for a person who failed to get a proper home inspection before buying. For a few hundred bucks, people could have gotten a responsible 3rd party lawyer/accountant to review the loan and tell them the real story.
It's beyond ironic to call someone irresponsible for walking away from a mortgage in light of the malfeasance and fraud committed by the mortgage industry, esp. against the hapless CMO buyers who have nothing to show for their investment but a steaming bag of toxic excrement for which there is no market. To lay the burden and blame on the mortgage walker for the impact on the community is ironic to the 9th power.
Well yeah...sometimes...and old Daddy is right sometimes. I have little use for the speculator who got trapped. But a lot of sympathy for the solid and rational first time buyer who got trapped by the system.
I tend to regard the decision to walk as an economic one leaving the morality for the priests. I am particularly supportive of those who know they almost certainly will have to walk away in the end game. One does not generally ever recover from being a third or more underwater. In those cases one should walk sooner rather than later and get it behind you.
If you are only a bit under water though it is probably worth riding out. Walking has its costs.
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,849,438 times
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Quote:
Originally Posted by bumpercar
It's beyond ironic to call someone irresponsible for walking away from a mortgage in light of the malfeasance and fraud committed by the mortgage industry, esp. against the hapless CMO buyers who have nothing to show for their investment but a steaming bag of toxic excrement for which there is no market. To lay the burden and blame on the mortgage walker for the impact on the community is ironic to the 9th power.
Not if in this particular case the mortgage walker was not a victim of the fraud that I will readily admit was prevalent in the lending atmosphere of the last 4-5 years. However, it has been said many times that 2 wrongs do not make a right, and if this person has the means to fulfill their obligation then in my opinion it absolutely irresponsible to walk away from said obligation. Again, I can't speak in absolutes because I am not aware of all of the details, but nowhere in the contract that was signed was there a clause guaranteeing that said property would appreciate. In this particular persons case they are adding to the plight of the CMO's, the associated 401k's and mutual funds, as well as that of the immediate neighborhood and subsequently the surrounding community.
Quote:
Originally Posted by olecapt
Well yeah...sometimes...and old Daddy is right sometimes. I have little use for the speculator who got trapped. But a lot of sympathy for the solid and rational first time buyer who got trapped by the system.
I tend to regard the decision to walk as an economic one leaving the morality for the priests. I am particularly supportive of those who know they almost certainly will have to walk away in the end game. One does not generally ever recover from being a third or more underwater. In those cases one should walk sooner rather than later and get it behind you.
If you are only a bit under water though it is probably worth riding out. Walking has its costs.
I will agree with you that if the end game is imminent and one ultimately will have no other choice, then by all means I would not chastise someone for the inevitable. However, I do believe that if someone has the means to fulfill the contract that they signed then morality and ethics do come into play. It may be because I am young (relatively speaking) and idealistic, but I believe that many that are facing the inevitable do so partly because of those that view it as a wise business decision to walk away, even though they are more than capable of fulfilling the terms of their contract. Obviously they are not solely to blame, but noone can deny that they have an impact.
Please keep in mind that I am not talking about people that have been trapped, either speculator or homeowner. I am talking specifically about people that, although their home is not worth what they paid for it, have the means to continue to make payments. I am referring to the person that may be in a fixed mortgage, but feels that they are "throwing their money away" because the home has not appreciated as much as they had hoped when they purchased it (by definition speculation, no matter how you slice it) and maybe also feel that they are entitled to special treatment by the banks with regards to their current interest rate and the one they would like to be paying. Of course I am assuming quite a bit here, but it sounded like this was the situation according to the intial post I responded to.
It's a financial transaction. The mortgagee lent money with interest, expecting a return but accepting the risk of default. The mortgagor is paying interest, expecting appreciation but accepting the risk of leveraged loss. Does morality dictate one party should act against his own financial interest to ameliorate the risk the other party willingly accepted going into the transaction?
If you want moral absolutism, both parties are immoral; one is usurious and the other covetous. ;-)
Quote:
Originally Posted by Daddys///M3
Not if in this particular case the mortgage walker was not a victim of the fraud that I will readily admit was prevalent in the lending atmosphere of the last 4-5 years. However, it has been said many times that 2 wrongs do not make a right, and if this person has the means to fulfill their obligation then in my opinion it absolutely irresponsible to walk away from said obligation. Again, I can't speak in absolutes because I am not aware of all of the details, but nowhere in the contract that was signed was there a clause guaranteeing that said property would appreciate. In this particular persons case they are adding to the plight of the CMO's, the associated 401k's and mutual funds, as well as that of the immediate neighborhood and subsequently the surrounding community.
I will agree with you that if the end game is imminent and one ultimately will have no other choice, then by all means I would not chastise someone for the inevitable. However, I do believe that if someone has the means to fulfill the contract that they signed then morality and ethics do come into play. It may be because I am young (relatively speaking) and idealistic, but I believe that many that are facing the inevitable do so partly because of those that view it as a wise business decision to walk away, even though they are more than capable of fulfilling the terms of their contract. Obviously they are not solely to blame, but noone can deny that they have an impact.
Please keep in mind that I am not talking about people that have been trapped, either speculator or homeowner. I am talking specifically about people that, although their home is not worth what they paid for it, have the means to continue to make payments. I am referring to the person that may be in a fixed mortgage, but feels that they are "throwing their money away" because the home has not appreciated as much as they had hoped when they purchased it (by definition speculation, no matter how you slice it) and maybe also feel that they are entitled to special treatment by the banks with regards to their current interest rate and the one they would like to be paying. Of course I am assuming quite a bit here, but it sounded like this was the situation according to the intial post I responded to.
Last edited by bumpercar; 03-27-2008 at 10:54 PM..
I don't really have a feeling for how long or deep the price decline will be. Seems to be stabiliizing but certainly nothing I would bet any money on.
I will however bet money on the volume going up fast. March is going to be up 15 to 25% over February. In fact it looks like April will be up year over year if the trend continues...and it seems to be building momentum rather than leveling off.
With the building volume I am skeptical that prices will drop much more.
Not sure I care though. A slowly declining price with fast growing volume is OK with me.
Quotes:
"..he taped a letter to the door offering the occupants $1,000 to move out. The catch: They won't get a cent if they trash the house before they leave."
"Real-estate agents estimate that about half of foreclosed properties to be sold by mortgage companies nationwide have "substantial" damage.."
"I'm one of the thousands of people in town in foreclosure so I'd like to get as much as possible for the items," said one recent Las Vegas online ad offering a double wall oven, dishwasher and built-in microwave, all of which, in most cases, legally belong to the bank.
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,849,438 times
Reputation: 958
Quote:
Originally Posted by bumpercar
It's a financial transaction. The mortgagee lent money with interest, expecting a return but accepting the risk of default. The mortgagor is paying interest, expecting appreciation but accepting the risk of leveraged loss. Does morality dictate one party should act against his own financial interest to ameliorate the risk the other party willingly accepted going into the transaction?
If you want moral absolutism, both parties are immoral; one is usurious and the other covetous. ;-)
I think that we can agree on this. I certainly was not trying to speak in absolutes. Every situation is different and my opinion (not judgement, just opinion) will differ regarding the same subject with different circumstances.
Quotes:
"..he taped a letter to the door offering the occupants $1,000 to move out. The catch: They won't get a cent if they trash the house before they leave."
"Real-estate agents estimate that about half of foreclosed properties to be sold by mortgage companies nationwide have "substantial" damage.."
"I'm one of the thousands of people in town in foreclosure so I'd like to get as much as possible for the items," said one recent Las Vegas online ad offering a double wall oven, dishwasher and built-in microwave, all of which, in most cases, legally belong to the bank.
I have not found that to be the case in Las Vegas. A few trashed maybe 5% Another 10 or 15% with things missing that should not be but no substantial damage. Buying one at the moment where the old owner took the fans. $1000 bucks if the buyer gets fancy ones.
One that was described in the literature as trashed was not. It was a DIY fix up that did not get past the tear it up stage. Old the fixtures and stuff were there just removed from where they were supposed to be. Ohh it needed 20K or so...but nothing malicious.
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Where does morality fit into it?
