Are you foolish to pay your mortgage?

[roxtar]

Re: Are you foolish to pay your mortgage?

It's all a house of mirrors I tell you!

Which is exactly why IMO one should not feel guilty about walking away from an underwater mortgage.
Why on earth would it be morally wrong to refuse to continue playing what you know is a rigged game in light of the fact that under the current circumstances you can ONLY lose?

[santafe2]

Re: Are you foolish to pay your mortgage?

As bad as it sounds, I'm not sure how morality has a role in a business deal. The contract is what it is. I'm not confident that my mortage holder would be gracious, understanding, or honorable if I told him a heartbreaking story about why I can't pay him. If the written contract allows the borrower to choose between the pain of default and the pain of full compliance, then he can choose.

A home mortgage is not a business deal. In business, we assess the customer's ability to pay and almost always, there's deceit when payment is not forthcoming. Generally, in business, the customer has resold the product and gained profit from it. They've used that profit to further their business without paying debt. Mortgages are little different than rent but very different from business debt.

In business, there is little latitude for non payment. If you don't pay, your creditors will crush you. There is no morality, it's business. Comparing a home mortgage to business doesn't make sense to me.

[jk]

Re: Are you foolish to pay your mortgage?

A home mortgage is not a business deal. In business, we assess the customer's ability to pay and almost always, there's deceit when payment is not forthcoming. Generally, in business, the customer has resold the product and gained profit from it. They've used that profit to further their business without paying debt. Mortgages are little different than rent but very different from business debt.

In business, there is little latitude for non payment. If you don't pay, your creditors will crush you. There is no morality, it's business. Comparing a home mortgage to business doesn't make sense to me.

santafe2, reading this right after reading your posts on the frank rich/tiger woods/enron piece, i can only think that you're feeling overstressed by the climate deniers around here.

to quote you:

in business, there is little lattitude for non payment.

and there's great lattitude for non-payment of a mortgage? my mortgage calls for payment without penalty up to the 15th of the month. on the 7th i get an automated call asking me to speak to a bank representative to allow a transfer from wherever they think i'm hiding the money. doesn't feel like a lot of lattitude to me.

[in business] if you don't pay, your creditors will crush you. there is no morality, it's business.

well, perhaps in the days of yore, when mortages were issued and HELD by local banks staffed by members of the community, there would be some difference between a business creditor and a mortgage holder.

I KNOW! just figured it out! it's christmas and you've been watching re-runs of "it's a wonderful life!" definitely, jimmy stewart wouldn't crush a mortgagee having a hard time. but seeing what's going on with patients of mine who are having financial problems and are behind on their mortgages, they don't seem to be dealing with jimmy stewart.

[raja]

Re: Are you foolish to pay your mortgage?

Now I feel like a chump, because maybe I could have gotten some kind of gvt hand out. Or I could have walked away. Now I just have an overpriced house and am a sitting duck for the prop tax man.

You know I save 10% of my pay check like my mommy and daddy told me to do. and if I get sued or the g-man has a bone to pick with me, they can come and clean out my bank account, the tax man has access too. But if I spend all of my money on whirrly gigs, vacations, liquor etc. I get a pass. Is this by design? When do savers get some protection? After all don't we need them for a stable economy. It's all a house of mirrors I tell you!

Yeah, we're all getting screwed -- savers and non-savers alike . . . while the Financial Elite get richer. :eek:

Don't take it lying down . . . .

Boycott the Big Banks! Vote Out ALL Incumbents!
Tell everyone you know and meet to do the same. We're all getting the shaft, so your words will not fall on deaf ears . . . .

[iyamwutiam]

Re: Are you foolish to pay your mortgage?

As I said often enough -the public CAN use fractional banking against the usurers at any time. All it would take is a a couple of 100,000 people removing an average of 30K in deposits from all sources (IRA/401k, etc) and moving them to another institution- say Bank of China, Bank of Russia -etc for a few weeks.

Overnite I am sure usurious rates, banking fees, student loans being fed to these same institutions, government de-regulation would disappear in the wink of the eye.

[Rajiv]

Re: Are you foolish to pay your mortgage?

All it would take is a a couple of 100,000 people removing an average of 30K in deposits

From a single "too large to fail" institution, yes, may be -- but definitely not from the system. If such a boycott were to happen to say JPMC, I am sure that the USG will move some of its fundss from multiple sources to partially compensate.

[iyamwutiam]

Re: Are you foolish to pay your mortgage?

From a single "too large to fail" institution, yes, may be -- but definitely not from the system. If such a boycott were to happen to say JPMC, I am sure that the USG will move some of its fundss from multiple sources to partially compensate.

No I think it would be a systemic shock precisely because it so intertwined and also because of the huge amount of leverage. For example if you go to the Federal Reserve site and look up the reserve requirements for loan categories -it goes to a MAX of 10% for loans of 55m or more -the rest are ZERO. So as I said 100,000 * 30,000 = 3Billion in cash - but since most of these are used as 'liabilities' for laons that have practically zero in deposits -it would cause a huge systemic shock that woulld in effect pull out close to 300 BILLION dollars from the system OVER-NITE. http://www.federalreserve.gov/moneta...reservereq.htm

Sort of like a legal fight club -where (say Election day) if 100,000 people executed this -the system would be in panic mode for two reasons:
1. The reserve requirements would be exposed and the bank would suffer an immediate, un-notified liquididty shock -which would be unprecedented.

2. If we could pull this off -the power of finance would immediately revert back to the people -and if news of its success ever came to light -the banks would HAVE to increase elnding, increase interest rates for savings and decrease usurious activities of affiliated CCs because they can not risk the sudden departure of liabilities (deposits) that they 'multiply to almost infinity and charge interest from. You would hit them where it hurts and you would send them a message (completely legally with no threat of arrest) that we the american public 'get it' and know thats it is OUR money that is being recycled to us.

it would really work -think about it for a few days. Imagine the consequences if say the 10M people with out helathcare and the 10M people who are taking usurious loans for so-called higher education got together and took out just 10,000 = 20,000,000 *10,000 = 20B so thats like removing 2 trillion dollars over nite or MORE. Then all of a sudden -I bet you -every American citizen would get free education and health care overnite and they would prosecute corporate fraud to the fullest extent of the law.

No corporation has the massive free capital as the american people- it would expose the system for what it is -and it is completely legal and non-violent.

[fallout]

Re: Are you foolish to pay your mortgage?

These are all the mortgage walkaway trustee sale states, meaning they are non-judicial foreclosure states. In those states, generally, when they foreclose on you, they cannot pursue you for their financial losses.
Many, such as California, do in theory allow a lender to choose judicial foreclosure but in those cases the lenders only do so if a borrower has significant other assets. This is the "one action" rule that lets the lender either pursue non-judicial foreclosure, at lower cost and less time, or judicial foreclosure that costs more money and takes more time but lets them go after you for their financial losses.


Alaska
Arizona
Arkansas
California
Colorado
District of Columbia (Washington DC)
Georgia
Hawaii
Idaho
Mississippi
Missouri
Montana (as long as non-judicial foreclosure is used)
Nevada - note that the lender CAN get a deficiency judgment (See below)
New Hampshire
Oregon
Tennessee
Texas (but even in a non-judicial foreclosure, the lender can pursue a deficiency judgment)
Virginia
Washington
West Virginia

These are states that also allow non-judicial foreclosure, and/or where non-judicial foreclosure is more common and deficiency judgments can be obtained more easily:
Michigan
Minnesota
North Carolina
Rhode Island
South Dakota
Utah
Wyoming

Regarding Nevada:
NRS 40.455 Deficiency judgment: Award to judgment creditor or beneficiary of deed of trust.
1. Upon application of the judgment creditor or the beneficiary of the deed of trust within 6 months after the date of the foreclosure sale or the trustee’s sale held pursuant to NRS 107.080, respectively, and after the required hearing, the court shall award a deficiency judgment to the judgment creditor or the beneficiary of the deed of trust if it appears from the sheriff’s return or the recital of consideration in the trustee’s deed that there is a deficiency of the proceeds of the sale and a balance remaining due to the judgment creditor or the beneficiary of the deed of trust, respectively.

[touchring]

Re: Are you foolish to pay your mortgage?

why should you pay if the bankers don't need to pay for the mistakes.

[ggirod]

Re: Are you foolish to pay your mortgage?

So as I said 100,000 * 30,000 = 3Billion in cash - but since most of these are used as 'liabilities' for laons that have practically zero in deposits -it would cause a huge systemic shock that woulld in effect pull out close to 300 BILLION dollars from the system OVER-NITE. http://www.federalreserve.gov/moneta...reservereq.htm

Unfortunately, it should be clear from the last while that the banks and government do not have to follow the rules. So, in a keystroke, 3 billion dollars would be poured into the system and all would be fine. Shortly after that, legislation limiting and retroactively taxing repatriation of money by individuals, (obviously not corporations) and requiring IRA money to be kept in US accounts and invested offshore only by a US firm, would be passed overnight by a bipartisan majority of finance-owned congress critters to avoid future incidents of "financial terrorism" by a few troublemakers who don't play nice. Peace, then, would be restored in the happy valley.

[charliebrown]

Re: Are you foolish to pay your mortgage?

i have pulled nearly all of my money out of chase. except for a few hundred for atm withdrawls. Chase owns over 50% of atm's in chicagoland. I figure with a $500 savings account I may be costing them more than they are making on me. Money is in FRN and gold. With zirp it makes no difference if your money is in the bank or not.

wrote my two senators and told them to cleanup their act. I told them no more stimulus, no more bail outs. I told them if they dont I will send a contribution to whoever their opponent is. (i could tell the don't give a rat from their responses, both party hacks)

[Rajiv]

Re: Are you foolish to pay your mortgage?

A short take from NPR on this topic

[MEDIA]http://public.npr.org/anon.npr-mp3/npr/atc/2009/12/20091225_atc_07.mp3[/MEDIA]

Walking Away From The House She Can Afford

[Rajiv]

Re: Are you foolish to pay your mortgage?

Homeowners With Underwater Mortgages May Be Too Ignorant To Be Ruthless

[Jay]

Re: Are you foolish to pay your mortgage?

Homeowners With Underwater Mortgages May Be Too Ignorant To Be Ruthless

Every banker knows the poor pay their debts, the rich are the ones you have to watch.

[flintlock]

Re: Are you foolish to pay your mortgage?

Every banker knows the poor pay their debts, the rich are the ones you have to watch.

Very true. From someone who repeatedly has to collect from "the rich".
I'm holding a bounced check now for $104 from a client( commercial RE agent) living in a million dollar plus home. This is the check they wrote to replace the first one that bounced.(" must have been a mistake") A buddy they owe $2000 for home repairs can't seem to get them to return his phone calls.

The rich will pay their bills until it becomes inconvenient to do so. They don't like to be inconvenienced.:rolleyes: