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If someone steals $50,000, $100,000, $250,000, they are likely going to do some serious prison time and carry the convicted felon thing with them, for life. Yet, someone can walk away from their promice to repay their mortgage and property taxes and worst case, get a slap on the wrist. They are stealing from their neighbors who will lose property value, their community, taxpayers and our collective futures......
Those were the rules of the contract that was agreed upon by both parties. People have the ability to walk away.
Means every pension plan and retirement fund would instantly be beyond seriously underfunded....
well, that's what happens when they invest irresponsibly.
maybe next time they won't assume that an implicit government backing is the same thing as an explicit government backing.
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Where would government get the money to issue and hold? The secondary MBS market is the source of funding of FHLMC/FNMA mortgages.
from the US central bank, the Federal Reserve.
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Credit scores above 700 and 25% down are not conducive to HUD's objectives.
agreed.
p*ss on HUD and their objectives, is what i am saying.
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That was how it used to be. Savers' deposits were routinely lent to home buyers. When homeowners could not repay, lenders defaulted and depositors/investors were left holding the bag. This is how it goes with private credit markets.
and this is how it should remain.
you offer a competing government-backed option to only the most creditworthy borrowers who are bringing at least 25% to the table, bypassing the secondary market entirely.
all the scum borrowers can go take out ARMs, or rent, or go forage in the woods for nuts and berries. it doesn't matter.
If someone steals $50,000, $100,000, $250,000, ...
It sounds like you are equating having an investment go South
and not being worth paying off to stealing.
It's not like there are no consequences to the person who walks
away from the obligation.
I lost a great deal in this fiasco. Someone "stole" money from me.
It was the big players on Wall Street, the stupid pension funds
who enabled them, etc. Not the hapless undewater homeowner.
You still haven't defined Strategic Default.
Where do you draw the line? $50k? $250k? What if the debtor
could make it right, but at age 50 or 60 or whatever, their entire
retirement funds would be drawn down to zero. Where's the line?
For me, I am about $60k under, I have the funds and I value my
credit enough to bring it to the table if I had to. I could also see
someone else that's $60k under just walking. It depends.
Remember, for every person buying a supposedly "overpriced" house
there was a lender who's only security was that same "overpriced"
property. They were the one's who were supposed to know better.
It's not the buyer's credit rating that is the security. It's the property.
Someone made that loan. They both took a risk. Why
does the home buyer now have to come up with 100%?
If they can't afford to make payments because of circumstances outside of their control - let them file for bankruptcy and pay the consequences for 7 to 10 years.
If they can afford to make payments - let them walk and pay the consequences for 14 to 20 years. One condition is that they cannot purchase real property for 15 years. That will make people think twice.
Someone made that loan. They both took a risk. Why
does the home buyer now have to come up with 100%?
Right now, the so called homeowner has no risk, let alone 100%.
Right now, the so called homeowner can walk away when it's no longer convenient to live in a place that is worth less than they paid/owed, no different than their car or anything else bought on credit.
Right now, the so called homeowner gets a temporary slap on the wrist in terms of a credit score if they walked away from a $50K or a $500K obligation.
It sounds like you are equating having an investment go South and not being worth paying off to stealing.
I suspect that your loan documents state that this property was your primary residence, not a financial investment.
Other people lent you funds based on this being your primary residence and your promise to repay.
That you misled other people as to your intent and now try to rationalize walking away from your promise, by blaming the people who lent you money is sad.
And yeah, I would watch my pocketbook around someone who executed a strategic default.
People learn from example. They have seen businesses that made bad decisions get billions of dollars of help. Help that ultimately comes from these same people who now have issues.
I have changed my attitude on this over time. I used to feel that people shouldn't do things like this. Now I can see why people do it and I can understand it.
Housing is primarily shelter, oftentimes an extension of ego, not a financial investment.
Please. Realtors, mortgage brokers etc never said anything remotely like that during the run up and you know it.
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