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Old 05-11-2010, 09:15 PM
 
Location: Arizona
824 posts, read 2,330,469 times
Reputation: 605

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I missed it on television, but watched it online.


Mortgages: Walking Away - 60 Minutes - CBS News
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Old 05-11-2010, 09:22 PM
 
4,619 posts, read 9,242,523 times
Reputation: 4974
I did. Not a lot of new information for those of us in PHX, as we've heard about this for the past 30+ months, but I'm sure it was interesting to the rest of the nation. Didn't like the fact that they gave an ad to the company trying to profit off people walking away from their home, as if they provide a real service for the fee. Howard Stern even talked about the segment on this mornings show for about 10-15 minutes, so it's getting some play.
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Old 05-11-2010, 09:28 PM
 
Location: Arizona
824 posts, read 2,330,469 times
Reputation: 605
Quote:
"I did. Not a lot of new information for those of us in PHX, as we've heard about this for the past 30+ months, but I'm sure it was interesting to the rest of the nation."
I agree, local observers probably know two or three people doing this, or are at least aware that it is going on. And there has been some national news coverage on the topic, but a 60 Minutes report really throws the info into mainstream America's living room.
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Old 05-11-2010, 09:34 PM
 
10,494 posts, read 27,161,415 times
Reputation: 6716
I feel sorry for anyone who has lost their house because they lost their job, got downsized and now have a lower paying job, etc. The first 2 people profiled on here are downright scumbags. They can easily pay their mortgages but are choosing not to. They have no morals no matter how they try to justify it. However, I do respect the last guy profiled because he did not go the route of the first two.
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Old 05-11-2010, 09:36 PM
AZM
 
95 posts, read 299,737 times
Reputation: 126
Isn't it just great! People took out a second mortgage and bought all kinds of toys like jetskis, quads, boats, fancy cars and consolidated their bills. Now they walk away from the mortgage that they can still afford, keep their toys and let the bank eat it. And everyone else get to pay it back through bank bailouts...can you say DIRT BAGS?
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Old 05-11-2010, 09:46 PM
 
4,619 posts, read 9,242,523 times
Reputation: 4974
Quote:
Originally Posted by las vegas drunk View Post
I feel sorry for anyone who has lost their house because they lost their job, got downsized and now have a lower paying job, etc. The first 2 people profiled on here are downright scumbags. They can easily pay their mortgages but are choosing not to. They have no morals no matter how they try to justify it. However, I do respect the last guy profiled because he did not go the route of the first two.
Yeah,but I can see both sides of it. It's a business decision, and if you think your family will be much better off in 5-10 years by walking away, then you do it. As they said on the episode, banks walk away from bad investments all the time. I get the moral argument though, too, but you have to weigh it against common sense and business sense.
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Old 05-11-2010, 10:00 PM
 
Location: Anchored in Phoenix
1,942 posts, read 4,557,399 times
Reputation: 1784
I have mixed feelings on this. While I am angry that irresponsible people got away with spending OPM and walking away, the costs of the bad loan should be incurred by one of the parties to the contract. One of those who signed it made a terrible business decision. No taxpayer should bail out the loser of the contract, whether that is the banker or the buyer. Seems that when one walks away in a non recourse state, the problem should belong to the outfit who loaned the money. That business should be severely punished for its bad business decision to trust a borrower for whatever reason. I want the banks to learn a big lesson. I want the borrowers who knowingly borrowed more than they could afford to learn a big lesson. I just do not want to subsidize irresponsibility on anyone's part.
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Old 05-11-2010, 11:13 PM
 
Location: Casa Grande, AZ (May 08)
1,707 posts, read 4,326,446 times
Reputation: 1449
Though this is a complicated issue, and there are some merits to the "business decision" argument, what many people fail to remember is that if this starts happening enough to significantly impact the risk factors evaluated by banks (i.e they must now add in a larger likelihood of defaulting loans than they presently do because of the risk of strategic default), mortgage interest rates for ALL of us will be higher in the future.

Nothing happens in a vacuum. Everything effects everything else.
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Old 05-11-2010, 11:17 PM
 
380 posts, read 1,059,901 times
Reputation: 203
I saw it thanks to AZJack. QUESTION: Where is that cute bungalow that the second couple paid 400K for, and is now worth 80K? I saw "2012" on the house number. Perhaps near Thomas, just West of the 51. Could we have a city-data investigation on this please?
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Old 05-12-2010, 03:01 AM
 
10,719 posts, read 20,242,426 times
Reputation: 10021
When a bank gives you a loan for your house and your property value is double what it was in 10 years ago, does the bank get to come back and ask for more money because your house is worth more than what the loan was for....NOPE!

I understand that it's a business decision but it's also immoral and unethical. I'm fine with people saying they made a business decision as long as they can admit it's also an unethical one.

Personally, I think it's a bad business decision. This guy's credit is going to be wrecked for 7 years. He will have to rent and most upscale apartments won't rent to him because his credit will be trashed. The smarter thing to do is live in your house and upgrade to a bigger house in time. Yeah, your house house might be worth half of what you paid for it but you can move into a second house that will be much cheaper than what you would have paid when the economy is strong.

I'm experiencing this now. My house is worth about 200K less than what I paid for it. However, I was considering some large homes that were selling for about 2 million 18 months ago that are now going for 1.3 million to 1.5 million. Sure, I might lose 200K on this house but will have saved 500K-700K. In the luxury housing market, there are some steals right now. I'm seeing homes in Paradise Valley selling for 1.5 million that were easily 2.5-3 million three years ago.
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