Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
There are already laws in place...they just need to be enforced on both sides.
Banks are not doing what's available to them to stem this tide - when you can get away with 9-15 months of rent free living, others are bound to do the same. If they foreclose in a timely manner, then maybe the # of SDs may decline.
Should incompetence and ignorance be criminalized?
There are already laws in place...they just need to be enforced on both sides.
Banks are not doing what's available to them to stem this tide - when you can get away with 9-15 months of rent free living, others are bound to do the same. If they foreclose in a timely manner, then maybe the # of SDs may decline.
Should incompetence and ignorance be criminalized?
Learn about accounting and "non performing loans" and you will understand why the banks aren't foreclosing. Doing that would be fatal to the banks. It doesn't make any sense and I don't agree with it, but thems the rules (or I should say strategy) of the game right now.
How hard would it be to create a law that makes a strategic default a crime?
How would you define a "strategic default?"
If someone has an earning capacity of about $40k, is over 40,
has no retirement savings and is over $200k under water, but
can pay the monthly mortgage payments, what do they do?
If I had that person coming to me for advice, I'd tell them to walk.
It might be their "fault" they only make $40k.
It might be their fault they have no retirement savings.
It's not their fault the housing market crashed.
I'd say their choices were the following:
(1) Strategic Default
(2) Strategic Suicide
I sure won't be spending my retirement sitting in the cold and
the dark eating raw beans and rice ... The person I mentioned
in the opening paragraph is certainly heading for that.
If more people were strategically defaulting, maybe some sanity
might start coming to the mortgage market from the "investors"
who are denying rate and principle reductions.
People being born today, won't see housing prices recover even
by the time they start entering college. It's time homeowners and the banks and the investors came to terms with that.
When I lose money on an investment, I deal with it and move on.
Entities that own the mortgages out there are in denial.
or, we could just go ahead and pull the plug on freddie mac and fannie mae entirely.
set up a government organization that issues and holds mortgages to individuals buying RRE with a credit score over 700 and 25% down, or some strict criteria thereabouts. let the private credit markets take any risks above and beyond that, their damn selves. set up a tax-free savings vehicle for buyers to save up for downpayments.
i never understood why "unfreezing the credit markets" equated to "supporting private firms." let's go ahead and nationalize the thing already.
Almost everything we buy is worth less than the price we paid for it, once we purchase it.
For a very brief period in time, the culture changed and ignored the hard facts that real estate has always been and will be cyclical. Instead the culture bought into mania blip.
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......
This will not end until there are consequences for strategic defaults.
Here are some consequences worth consideration:
Mandatory community service until the debt to society is paid, and/or
Inability to be financed and /or buy anything on credit, ever, and/or
Elimination of social security benefits.
Last edited by middle-aged mom; 05-12-2010 at 01:40 PM..
or, we could just go ahead and pull the plug on freddie mac and fannie mae entirely.
Means every pension plan and retirement fund would instantly be beyond seriously underfunded....
set up a government organization that issues and holds mortgages to individuals buying RRE with a credit score over 700 and 25% down, or some strict criteria thereabouts.
Where would government get the money to issue and hold? The secondary MBS market is the source of funding of FHLMC/FNMA mortgages.
Credit scores above 700 and 25% down are not conducive to HUD's objectives. It was HUD that mandated FNMA/FHLMC increase lending to people who were more likely not to be able to repay, than not, especially in a cycilal downturn.
let the private credit markets take any risks above and beyond that, their damn selves.
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.
set up a tax-free savings vehicle for buyers to save up for downpayments.
I like this, even though it means a government subsisdy.
i never understood why "unfreezing the credit markets" equated to "supporting private firms." let's go ahead and nationalize the thing already.
Private firms employ people and pay taxes. Private firms borrow from other private firms. When private firms defualt, they tend to take other private firms with them. Most so-called private firms are publicly traded/held. It's impossible to isolate oneself from risk.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
