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Read the thread again. The contract provides for a default. So they do follow the contract.
Your moral code does not apply to another. The contract applies to those who enter into it. And default is a contract termination provided for in the contract and controlled by State law.
If you don't like it talk to you State Legislators.
This is going to happen regardless of moral issues or otherwise (like olecapt said, it's not illegal) ... but what implications do these actions have on the housing market and the economy... I think is a more important question.
I think these actions will create population shifts... shore up prices/inventory in better areas... and hasten the downfall of foreclosure infested/bad areas. It will also tighten lending standards and increase the interest rate margins (after all they have to reformulate their "calculations" adding in the new switch and bail tactics).
These actions may hasten up the recovery because of instead of having these people foreclose and go off to rent.... and then buy 7 years later... these people are buying now... and propping up the housing economies of the good areas.... so, I guess these people actually help the economy? Although they are evil in the sense that they hurt their old neighborhoods... a BUY action would help the housing market and the economy overall (since a house is bought instead of a house is lost). Since they were going to foreclose anyways... so, why not buy?
Whether the banks come back to haunt these people in the future is another up for grabs though.
This is going to happen regardless of moral issues or otherwise (like olecapt said, it's not illegal) ... but what implications do these actions have on the housing market and the economy... I think is a more important question.
I think these actions will create population shifts... shore up prices/inventory in better areas... and hasten the downfall of foreclosure infested/bad areas. It will also tighten lending standards and increase the interest rate margins (after all they have to reformulate their "calculations" adding in the new switch and bail tactics).
The foreclosures are not in "bad" areas...they are in the "best" areas. For any given price point the foreclosures concentrate on the houses built in 2005 and 2006 - close to the newest inventory.
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These actions may hasten up the recovery because of instead of having these people foreclose and go off to rent.... and then buy 7 years later... these people are buying now... and propping up the housing economies of the good areas.... so, I guess these people actually help the economy? Although they are evil in the sense that they hurt their old neighborhoods... a BUY action would help the housing market and the economy overall (since a house is bought instead of a house is lost). Since they were going to foreclose anyways... so, why not buy?
The whole foreclosure mess hurts neighborhoods. Blame it on the builders who extracted too high a price for the properties at the peak...or the lenders who lent unrealistic sums. Actually if they buy next door the neighborhood breakes even.
Takes about 2 or 3 years to escape a foreclosure if everything else is close to perfect.
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Whether the banks come back to haunt these people in the future is another up for grabs though.
-chuck22b
The Lenders may come back to haunts us all...but no reason they would hit the folk who were foreclosed. In fact the large number of foreclosures practically guarantees it would be a big impediment to credit in a couple of years.
The foreclosures are not in "bad" areas...they are in the "best" areas. For any given price point the foreclosures concentrate on the houses built in 2005 and 2006 - close to the newest inventory.
I wouldn't say new areas are the "Best" areas. New areas could have the most "potential", but they definitely aren't the best until we start seeing stats, etc. later on in time. A development in a new area with awesome facilities, etc... even with the best intentions of the Builders/Developers could still end up being ghost towns/slums depending on the people and demand/inventory in the area.
I'd define the best areas as being where there are good schools, close to or in job centers, and are in those "Top" lists... desirable. Least Crime, higher income, etc., etc., etc. Also, having City/Community support and having "money" in the City/Development Coffers would help.
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The whole foreclosure mess hurts neighborhoods. Blame it on the builders who extracted too high a price for the properties at the peak...or the lenders who lent unrealistic sums. Actually if they buy next door the neighborhood breakes even.
The builders were selling to those willing to buy at market price.... I don't really think the builders even foresaw this mess hence why so many are going bankrupt.
If the person buys in the same place... I hope the neighbors don't mind that they ditched the other place (peer pressure). Also, if they did buy in the same area... won't they be facing the same problems of depreciating values they had in the first place? Now that neighborhood has +1 foreclosed house and the area prices will fall more. I for one, if I were to do what they are doing... I would move to the best place that I could afford in a more desirable area.
Anyways, the fact that they "BUY"... helps out the new area's economy. If they just foreclosed without buying... then they just hurt the economy. With the buy action, they benefit the location they bought. Either way, the old neighborhood gets hurt while the new area gets a bonus.
I'm not advocating the action... I'm just trying to understand the implications of their actions toward the economy and their neighborhoods.
Location: Halfway between Number 4 Privet Drive and Forks, WA
1,516 posts, read 4,591,098 times
Reputation: 677
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Originally Posted by olecapt
Nonsense. The majority did nothing wrong. Mostly just young and naive and buying their first house.
I guess we who practice Christian charity will simply have to bare with you Phillistines.
Your view is wrong, plain and simple. Name calling doesn't make you look better. Sorry if you can't see it. You can't defend those actions and call yourself a Christian. Religion has nothing to do with this...
Don't care if they are first time home buyers or seasoned relocators. They are buying a new home and ditching their old, knowingly, and thinking they are getting one over. Or coming out ahead to the expense of maybe you, maybe me, but definitely to the expense of the marketplace and our economy as a whole. It may be legal but sooner or later the banks will catch up to this farce. You just don't get it, maybe the picture is too big for you to see...
This isn't simply about "walking away" because they can't afford it.
Your view is wrong, plain and simple. Name calling doesn't make you look better. Sorry if you can't see it. You can't defend those actions and call yourself a Christian. Religion has nothing to do with this...
Don't care if they are first time home buyers or seasoned relocators. They are buying a new home and ditching their old, knowingly, and thinking they are getting one over. Or coming out ahead to the expense of maybe you, maybe me, but definitely to the expense of the marketplace and our economy as a whole. It may be legal but sooner or later the banks will catch up to this farce. You just don't get it, maybe the picture is too big for you to see...
This isn't simply about "walking away" because they can't afford it.
Say what you want, I'm done on this thread...
I am always thankful for small favors.
Your appear upset that they can take a course that minimizes the damage. I gather you found it OK if they walk away and rent for a few years. What is that? Atonement for their sins? So a young couple gets a very bad break. But they are good people if they willingly suffer for the bad break but bad people if they do something to limit the damage. Does not compute.
Oh the Phillistine/Christian thing was merely rhetorical...I don't really suggest that you or I are a member of either group..
Location: Halfway between Number 4 Privet Drive and Forks, WA
1,516 posts, read 4,591,098 times
Reputation: 677
(One more time and I promise I'll shut up... )
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So a young couple gets a very bad break. But they are good people if they willingly suffer for the bad break but bad people if they do something to limit the damage. Does not compute.
Let's reverse your argument for a minute...
I am borrowing this example from another thread...
I bought a condo 3 years ago. I really wanted a single family home back then. But I bought what I could then afford and I way overpaid. Single family homes are now selling in my area less than the price I paid for my condo. I can reasonably afford my condo. This isn't a situation where I was bamboozled. I knowingly paid what I paid for my condo, I just simply bought at the wrong time. Does that mean I should now take out a mortgage for a SFH and let my condo go into foreclosure? Because I can?
Losing your home to foreclosure because you lost your job, or truly can't afford it, or an illness, is different. And very sad, I do feel empathy for people like this. However, walking away just because you're crying foul and then buying something else when you just "want to" is different. Rent out your home/condo if you can't sell it. There are other options than just walking away because you don't want to deal with it anymore.
P.S. I don't see how banks in these areas will let these borrowers have 2 mortgages, and if they are letting such borrowers have 2 mortgages, CLEARLY, the people doing this scam can INDEED afford their old place. How else can they get approved for a new home before they sell their old? I've heard of bridge loans but is there something else out there I'm not aware of???
Last edited by PotterGeek; 06-18-2008 at 08:17 AM..
Nonsense. The majority did nothing wrong. Mostly just young and naive and buying their first house.
I guess we who practice Christian charity will simply have to bare with you Phillistines.
I hate to disagree with you, but the majority having problems did do something wrong. They signed contracts that they fully understood that interets rates would adjust, or that they would have to refinance, and they did it knowing that housing prices fluctuate.
Housing market prices dropping, beyond their control.
Agreeing that one would purchase a home they couldnt afford, knowing darn well that the loan would need refinanced in a few years, simply to get "in the door" of the dream home, in their control.
Most of these people are not young, or buying their first homes. Quite a few of them had multiple homes, (and they couldnt afford the first) hoping to get in and out before the crash.
Yes, buyers, and bankers both took educated risks, and they signed on the dotted line to pay or leave.. An awful lot are choosing to leave simply because of an imaginary loss on their homes (declined in value), many need to be educated to simply hold onto their home if they can afford because housing prices will recover. Its a temporary set back and far to americans see a price drop and sell, rather then live out the storm.
Same actions causing the over financing, is now causing the over dumping of homes.. "I WANT NOW!!!"
I bought a condo 3 years ago. I really wanted a single family home back then. But I bought what I could then afford and I way overpaid. Single family homes are now selling in my area less than the price I paid for my condo. I can reasonably afford my condo. This isn't a situation where I was bamboozled. I knowingly paid what I paid for my condo, I just simply bought at the wrong time. Does that mean I should now take out a mortgage for a SFH and let my condo go into foreclosure? Because I can?
I shake my head all the time when I see this happening because its happening daily. I watched my aunt buy a home for less then $30K, and over 5 years, ring the balance of their mortgage up to nearly $90K by non stop refinancing their home. The bank foreclosed, sold the house for $19K. My aunt could afford their home at $30K, and they could afford the mortgage at $90K, they chose to simply not pay the payment because the house needed new downspouts and the cost was about $1000 and they were fed up with making repairs.
I tried tell them that they still needed to pay rent, they of course are paying $1,000 a month to rent a home nearby... I for one am at a loss as to what they are thinking, but its not my money..
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