Makes my blood boil . . .

[ProfMoneyWise]

Million-dollar foreclosures rise as rich walk away - Yahoo! Finance

"In the lower-priced houses you'll see more people defaulting because they can't afford the payments and it's a choice between feeding their family and paying the mortgage on a home that's under water," said Stuart Vener, a national real estate and mortgage expert with the Florida-based Wilshire Holding Group.


"In million-dollar homes, you're looking at people who can afford it, but they have to make a business decision: Does it make sense to make payments on a mortgage when the home is worth less than they owe?" he said. In many cases, it often makes more financial sense to walk away."

This may make financial sense but it does not fly with the person who shaves in my mirror every morning. When did the act of borrowing money lose the promise to pay it back?

 

[Aerogal]

People just don't care anymore - personal responsibility went out the window when the liberal left took over.


Besides - no one owns a home anymore. Don't pay property tax on your paid for home and see how long you 'own' it.......

 

[ProfMoneyWise]

People just don't care anymore - personal responsibility went out the window when the liberal left took over.

Besides - no one owns a home anymore. Don't pay property tax on your paid for home and see how long you 'own' it.......

I've seen the quote before about property tax. Taxes pay for things we all need. Not all tax money collected is squandered or handled badly. I like running water, sewer, roads, lights.

Any you don't think is handled correctly there are forums for voicing your feelings and of course voting.

 

[Larry Gude]

This may make financial sense but it does not fly with the person who shaves in my mirror every morning. When did the act of borrowing money lose the promise to pay it back?

Now, this is interesting and it surprises me it would make you angry. For one, there is no lose of promise to pay the money back. A home loan, as you know perfectly well, is a collateralized obligation. Legally, it's not even our home until the last payment is made and even then, the home is only ours as long as we continue to make payments on it in the form of property taxes.

In the example you reference, you add the comment from the story that it makes financial sense plus the added caveat 'but, they can 'afford' it'.

Well. They can 'afford' more vacations. They can 'afford' to pay more for food. Clothing. You name it. What one can 'afford' should NEVER, EVER enter the equation when we are talking about what a free person in a free society can do. If it makes financial sense to walk away from the home, and those folks think it best for their life, then they are obligated to walk away. The terms and conditions of the loan allow for that very thing. They are losing whatever value there is. They are losing every last drop of sweat and blood and love and care they put into the place.

The point is, individuals buying a home are acting on their trust in their government, local, state and federal and the subordinate regulatory institutions and lending institutions that the most precious possession we have, our homes, will be preserved and protected. It is fair to say that we, the people, got carried away with the housing boom and secondary loans and flipping and investment properties and all of that. However, it is also fair, and more important, to point out that our institutions failed us where we can least afford it; our homes.

Zoning rules, building permits, government lending programs to people unlikely to be able to 'afford' (there's that word again) a mortgage. Regulatory weakness allowing lenders to enter into higher risk business. Allowing insurers lax, dangerous standards. Then, the bundling, the CDO, the ABS's and the entire derivative market, all specially and specifically designed to offer the least possible transparency in order to sell the hot potatoes and not be the one caught when the music stops.

All of that falls on our government to operate of, by and for the people. Our system did fail and is failing us. Dramatically.

Now, it is truly the wise and conservative person who sat by as everyone else was making money left and right during the rise of the bubble but, that person is still dramatically affected and impacted by the entire thing. It may not be your fault that your neighbor's house(s) are burning to the ground but, it is still very much in your interests to help save them, stop the fires, find what went wrong and help fix it. We all profited, from flowers to home furnishings to any and everything that was economically generated around the home bubble. There are no innocent parties. That doesn't make everyone guilty of bad decisions but, we are all, very much, in this together.

And that is why this isn't getting fixed.

 

[ProfMoneyWise]

There are companies who are selling to homeowners the concept to default on the home and then the company guides the homeowner to propose to the lender a short sale effort.

The price is set at market value for the short sale. The company guiding the homeowner makes an offer to purchase the property at about +10%over the short sale price.

The lender takes the offer and sells the home to the company.

The company then tells our homeowner the deal continues in that they would then sell back the home to the homeowner.

A con requires the mark to be greedy and/or desperate.