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You are trying to rationalize your irresponsibility. There is no point in taking this further.
Exactly.
I see it as both my home and an investment. But I also see it as a LONG TERM investment. And anyone who pulls up their big boy pants and stays in their home and pays their mortgage for a few more years will start to see gains in equity again.
If you want to be a day trader, you play with stocks, not real estate. Anyone who assumes differently deserves to lose their shirt on the basis of stupidity alone.
You are trying to rationalize your irresponsibility. There is no point in taking this further.
This was mostly a philosophical discussion. From the beginning I said that everyone's situation is different and that a person should consult an attorney and that for some people it makes sense to walk away, if they have protected their assets properly from the get-go.
To this people replied that it never makes sense to walk away because it is not the right thing to do because of their mother's 401K or because that's how they were brought up or who knows why?
To this I said that the banks do not see your home as a long term thing, it is just another piece of paper to trade and speculate on. On top of that they were as irresponsible as any other person out there but the difference is, they got their behinds covered and the people were left in the dust.
You called me irresponsible above. So, If we are going to label each other, here is yours: you are just a robot who has been brainwashed to know only "signature=obligation" which seems to only apply to the average Joe who happens to be easy to step on and enforce the rules on. Either that or you have a vested interest in the whole situation.
FIY, my mortgage has been under water for a few years and it is up to date on payments and it will be. That does not mean I am not pissed off about the fact that the banks got money and moved on but people are still on the hook. If you can explain the justice in that to me, I would love to hear it.
I see it as both my home and an investment. But I also see it as a LONG TERM investment. And anyone who pulls up their big boy pants and stays in their home and pays their mortgage for a few more years will start to see gains in equity again.
If you want to be a day trader, you play with stocks, not real estate. Anyone who assumes differently deserves to lose their shirt on the basis of stupidity alone.
But this is only a one-sided deal. The bank has commoditized your home loan a long time ago and dumped it to be traded daily by people you don't know. Thus, to them it is not your home, it is a piece of paper.
When a business/corporation makes a decision that does not produce profit in any desired time frame, they cut their losses and walk away (and take the consequences). A mortgage note is no different and is not without punishment for the person walking away - they lose their home when doing so (the home is the collateral). That home is valued at the time of foreclosure sale which is perfectly OK when foreclosures happen in normal markets - chances are that the foreclosed home in a normal market could sell for the same amount or more than the original debt. This way bank is happy, there is no deficiency to come after etc.
But, this market isn't normal and going after people for the difference is immoral, especially since banks got bailed out for their own stupidity by tax payers and because TARP money was used to write off bad paper and make their books look good. For the bank to enforce the rules is a double whammy, the paper associated to the mortgage is already written off, there is no problems, they get a property they sell for X amount of money and then go after the person for the difference. They got their cake and ate it too.
But this is only a one-sided deal. The bank has commoditized your home loan a long time ago and dumped it to be traded daily by people you don't know. Thus, to them it is not your home, it is a piece of paper.
Which I understand but could care less about. once I signed that note and it was filed with the County Clerk, the terms couldn't be changed, so frankly I don't give a crap what happens to the paper.
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When a business/corporation makes a decision that does not produce profit in any desired time frame, they cut their losses and walk away (and take the consequences). A mortgage note is no different and is not without punishment for the person walking away - they lose their home when doing so (the home is the collateral). That home is valued at the time of foreclosure sale which is perfectly OK when foreclosures happen in normal markets - chances are that the foreclosed home in a normal market could sell for the same amount or more than the original debt. This way bank is happy, there is no deficiency to come after etc.
And if the business has borrowed money, the consequences generally mean it has to be paid back. A small business loan is usually personally guaranteed by the president of the company, a large business will use other assets to repay the loan of suffer the inability to draw on their credit line.
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But, this market isn't normal and going after people for the difference is immoral, especially since banks got bailed out for their own stupidity by tax payers and because TARP money was used to write off bad paper and make their books look good. For the bank to enforce the rules is a double whammy, the paper associated to the mortgage is already written off, there is no problems, they get a property they sell for X amount of money and then go after the person for the difference. They got their cake and ate it too.
It's not at all immoral. The banks were able to borrow money from teh government which has been repaid. The other option would have been that the banks failed, the FDIC paid out everyoen with money in those banks, and then didn't get it back. Uh, right. The proper business decision was to give the banks a line of credit from the government so they could regroup and remain open. The only reason loans were written off was because deadbeat buyers didn't repay what and how they ahd promised, in many cases even when they were able to.
We also saw people go to jail for fraud where fraud existed. Otherwise nobody held a gun to anyone's head to make them sign for thei note for their home, therefore the IMMORAL thing is to walk away and leave your friends and neighbors holding the bag for you greed.
Which I understand but could care less about. once I signed that note and it was filed with the County Clerk, the terms couldn't be changed, so frankly I don't give a crap what happens to the paper.
And if the business has borrowed money, the consequences generally mean it has to be paid back. A small business loan is usually personally guaranteed by the president of the company, a large business will use other assets to repay the loan of suffer the inability to draw on their credit line.
It's not at all immoral. The banks were able to borrow money from teh government which has been repaid. The other option would have been that the banks failed, the FDIC paid out everyoen with money in those banks, and then didn't get it back. Uh, right. The proper business decision was to give the banks a line of credit from the government so they could regroup and remain open. The only reason loans were written off was because deadbeat buyers didn't repay what and how they ahd promised, in many cases even when they were able to.
We also saw people go to jail for fraud where fraud existed. Otherwise nobody held a gun to anyone's head to make them sign for thei note for their home, therefore the IMMORAL thing is to walk away and leave your friends and neighbors holding the bag for you greed.
Amusing. The PROPER thing to do was to give banks money to modify the principles on the loans so that people can stay in their homes AND the banks could stay solvent AND the home values can stay reasonable. The EASY thing to do (driven by lobbying and money) was to prop the banks up and screw the homeowners. At some point in time it must have become obvious to most of these bankers that the govt is going to have to bail them or risk crashing the financial system. There was no incentive to screw around with people's individual situations.
But see, modifying principles is not how the greedy banks think (even if the modification is paid for by someone else). It is simply not in their vocabulary. They don't have the time to tinker with your situation, your HOME etc. Modifying loans on a case by case basis would have been too much for them.
Tell me one consequence that the banks suffered in all this. I mean they did loan the money to anything with a pulse. Or did they have no responsibility whatsoever?
Amusing. The PROPER thing to do was to give banks money to modify the principles on the loans so that people can stay in their homes AND the banks could stay solvent AND the home values can stay reasonable.
As a taxpayer, how does that help me? Or will EVERYONE automatically get a 20% reduction in their principle? Your scheme would only punish those of us who are responsible and prudent and reward those who bought more than they could afford.
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The EASY thing to do (driven by lobbying and money) was to prop the banks up and screw the homeowners. At some point in time it must have become obvious to most of these bankers that the govt is going to have to bail them or risk crashing the financial system. There was no incentive to screw around with people's individual situations.
Considering that in the big picture a small percentage of homeowners in this country are in foreclosure, how is this at all equitable to all tax payers. Why should I pay your mortgage?
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But see, modifying principles is not how the greedy banks think (even if the modification is paid for by someone else). It is simply not in their vocabulary. They don't have the time to tinker with your situation, your HOME etc. Modifying loans on a case by case basis would have been too much for them.
Why should they modify at all? Unless there is proven fraud, you signed for a loan, you need to pay it back, just like the banks did with the TARP money.
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Tell me one consequence that the banks suffered in all this. I mean they did loan the money to anything with a pulse. Or did they have no responsibility whatsoever?
Sure they have responsibility--their stocks are way down, some have folded, lots of people have been fired from their high paying jobs. There has been plenty of consequence.
As a taxpayer, how does that help me? Or will EVERYONE automatically get a 20% reduction in their principle? Your scheme would only punish those of us who are responsible and prudent and reward those who bought more than they could afford.
Considering that in the big picture a small percentage of homeowners in this country are in foreclosure, how is this at all equitable to all tax payers. Why should I pay your mortgage?
Why should they modify at all? Unless there is proven fraud, you signed for a loan, you need to pay it back, just like the banks did with the TARP money.
Sure they have responsibility--their stocks are way down, some have folded, lots of people have been fired from their high paying jobs. There has been plenty of consequence.
Just so we know who actually paid back the money, here is a list of all the entities that borrowed the money and the ones who returned it. I am willing to bet that none of that money went into foreclosure prevention. The ones that returned the money are the ones that needed it least (according to the Senate report below): Tracking the $700 Billion Bailout - The New York Times
Finally, you can read the Senate report on the effectiveness of TARP:
Taking Stock: What Has the Troubled Asset Relief Program Achieved? (http://cop.senate.gov/reports/library/report-120909-cop.cfm - broken link)
Just so we know who actually paid back the money, here is a list of all the entities that borrowed the money and the ones who returned it. I am willing to bet that none of that money went into foreclosure prevention. The ones that returned the money are the ones that needed it least (according to the Senate report below): Tracking the $700 Billion Bailout - The New York Times
Finally, you can read the Senate report on the effectiveness of TARP:
Taking Stock: What Has the Troubled Asset Relief Program Achieved? (http://cop.senate.gov/reports/library/report-120909-cop.cfm - broken link)
You didn't answer my questions:
As a taxpayer, how does that help me? Or will EVERYONE automatically get a 20% reduction in their principle? Your scheme would only punish those of us who are responsible and prudent and reward those who bought more than they could afford.
As a taxpayer, how does that help me? Or will EVERYONE automatically get a 20% reduction in their principle? Your scheme would only punish those of us who are responsible and prudent and reward those who bought more than they could afford.
Strategic defaults have nothing to do with people who bought what they could not afford. The TARP fund should have been used to modify loans that made sense modifying based on the income of people at that point in time (what banks should have done the first time?). Some loans just never had a chance of being repaid (again the banks approved them apparently by saying "signature=debt and people must do the right thing regardless so we don't care either way"?).
I was/am responsible, I can afford my home just fine but it is worth half of what I owe and has been for the last few years. What if you and I have the same discussion in five years? I would have just spent 7-8 years putting money into a bottomless pit. How is that responsible (in regards to myself?). Am I to blame that you, my neighbor, were greedy and got a loan approved by an equally greedy bank? The bank washed its hands off from you, you walked away, my house's value dropped as a result. Now I have a worthless house that I spent years paying for, I paid taxes so that the banks can legally wash their hands off you. Who wins in the end?
As a taxpayer, how does that help me? Or will EVERYONE automatically get a 20% reduction in their principle? Your scheme would only punish those of us who are responsible and prudent and reward those who bought more than they could afford.
The quoted links were supposed to show that you saying "banks paid off the TARP loans" was baloney.
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