Owners Stop Paying Mortgages, and Stop Fretting

[nebris]

From The NYTMay 31, 2010

Comments

[singofmyself]

Foreclosure has allowed them to stabilize the family business. Go to Outback occasionally for a steak. Take their gas-guzzling airboat out for the weekend. Visit the Hard Rock Casino.

Ummm, I'm responsible with my mortgage and pay it MONTHLY and don't any any frakking boats or go out to eat whenever I want.

[sophiaserpentia]

I don't subscribe to the notion that if you're struggling financially you don't deserve to have recreation, but that strikes me as ridiculous, which I think is the point of leading the article with that.

This strikes me as the 2010 equivalent of the 'welfare queen' driving a Cadillac: an image more helpful for the advancement of a certain political agenda than one grounded in reality.

I don't have any sympathy for someone who would choose to keep a luxury rather than selling it to either help pay the mortgage or putting the money toward more affordable and stable accommodations and I imagine that most people who have been struggling the past few years feel similarly.OTOH if their mortgage is in bad enough shape, selling the airboat to try to cover the mortgage might be like pissing in the ocean. They could likely sell every luxury item they own and still only buy themselves a few months, which in the long run isn't going to make a bit of difference. They'll still be underwater in a home they can't afford, only they will have lost

[jsl32]

the families profiled used their homes as ATMs to buy the consumer goods they can't be bothered to sell now.

I have no sympathy for the people in this article or the banks.

[sophiaserpentia]

Well, if it's any consolation, here's what will probably happen: the bank will sue and the court will put a lien on the airboats and other luxury items those families bought, and eventually the sheriff will come and take them away.

The bankers, however, will get away scot-free with over-leveraging themselves to kingdom come and will even pocket nice bonuses for themselves in the process.

[sophiaserpentia]

Wow, the NYT ran a collective hatchet job on the American mortgage-holder. Did they come up with this idea all on their own? Or is it simply a coincidence that this comes after banks have been whining for a year or so now about how Americans have started to do as they do and treat contracts as legal documents instead of holy sacraments that must never be defiled?

[nebris]

Oh, I'm sure it's merely a coincidence. =P

~M~

[peristaltor]

I'm completely divided on this issue. First, since I hail from hardy and cheapskate stock, I would never buy more than what I can afford, never take out more of a loan than I could reasonably assure myself I could pay in full.

That said, when you buy such a house at the peak of the bubble, only to find it plummet in value, what should you do when you do lose the job or the wife gets sick? The house has no value, no equity. It can not be sold, at least not for the value of the loan. By simply not paying, you might find you have more than the two options everyone keeps saying you have.

Then you remember that there were two signatories to that mortgage; you're only one of them. Not all of the other players -- the ones that approved that initial loan at an incredibly inflated price, but who keep insisting only you suffer for their poor decision -- are doing a poor job with their legally-required responsibilities regarding marking your oversized bungalow to its market value