MBA strategically defaults on mortgage

[blazespinnaker]

http://immoralhazard.housingstorm.co...tegic-default/

I saw this on the daily show. Apparently the MBA is walking away from their HQ

"In an incredible show of arrogance and hypocrisy, the Mortgage Bankers Association is Walking Away from the 10-story, Washington D.C. building that they bought in 2007 to be their headquarters.

John Courson, CEO of the MBA once said about strategic default: “What about the message they will send to their family and their kids and their friends?”"

[Jeff]

Re: MBA strategically defaults on mortgage

The idea that a consumer making a cold, rational economic decision about a mortgage is somehow "immoral" makes me furious. These same sanctimonious people have no problem with laying off thousands of people or tanking your 401(k) in the name of the "free martket", but Dog forbid the sheeple get uppitty.

Watching the episode on the Daily Show the other night made me so pissed off I wanted to spend the rest of the year visiting mortgage brokers conventions, chambers of commerce and other place these cowards of the market place cower, wimper and plot revenge against an Administration that saved their sorry asses and just ask them, "What the fuck were you thinking? How dare you preach?"

Of all the many sins of man, hypocrisy should surprise me least, but it never fails to sting, and make it that much harder to think the best of people. Sins of the hot blooded are unfortunate, but understandable. These are the sins of the cold hearted, and I can find no sympathy for them.

[Thailandnotes]

Re: MBA strategically defaults on mortgage

"Right now we’re headed for a perfect storm: An unprecedented concentration of income and wealth at the top, a record amount of secret money flooding our democracy, and a public in the aftershock of the Great Recession becoming increasingly angry and cynical about government." Robert Reich (yesterday)

If there are no clear moves towards prosecuting the fraud now so obvious, the fat lady has sung.

[chr5648]

Re: MBA strategically defaults on mortgage

Whats even more disturbing is that the MBA will not have to deal with a foreclosure/walk away on their credit score, consumers on the other hand are then persecuted with low credit scores.

I have said it before, the times, ethics, and morals of our parents and grand parents are gone, they will not be back for a long time(post societal collapse), we can yearn for them, but they will do nothing but harm us in this new societal paradigm. Being young I have realized this early on my adult life, new rules apply to my generation for survival.

PS. This situation can eventually be a harvard business school 'case' or another business school case. Students will learn that this was a GOOD business practice, staying and paying would have been the BAD management technique. Consumers are not taught this good/bad distinction and when to determine when to default.

[Jay]

Re: MBA strategically defaults on mortgage

If there are no clear moves towards prosecuting the fraud now so obvious, the fat lady has sung.

I sent this to one of my state senators last night:


The problem with government stimulus is that it crowds out private capital. Government spending isn't the answer and will only make it harder for entrepreneurs and small businesses to create successful enterprise. It is well known that they are the only true job creation mechanism in the economy. When you combine an increasing regulatory and tax burden on what is left of the middle class, with ever larger handouts to a swath of Americans who are not being productive, you end up with a shrinking economy and worsening problems. Unfortunately the only way out is to take our medicine; shine a bright light on financial abuses, put white collar cons in jail, cordon off the bad debt in a Resolution Trust Company II type vehicle, and let private capital free in a more transparent economy. The alternatives are not pretty.

We have already seen a drastic loss in purchasing power of the dollar as producers, instead of passing increased costs onto the consumer, shrink sizes, cut corners or sell an inferior product. The consumer can not pay because the wage inflation of the 70's has not occurred in this very different economic landscape.

In some respects the process of the very large players fighting to keep their piece of the shrinking pie, as the smaller players get trampled, will play out until something untoward happens. That is the unfortunate lesson we can take from history. The problem is that the debt carrying capacity of the populace is saturated and yet the debt holders are naturally unwilling to budge. There is likely no out this time, short of a technological miracle on the scale of the steam engine, the economy can not grow out of its doldrums. Eventually a debt jubilee will occur; through both inflation and default, hopefully with as little civil unrest as possible.

Please keep in mind that during difficult times men in power can make a big difference. Stay true.
Cheers,
Jay

In hindsight, I wish I had re-emphasized cleaning up the corruption and fostering small business in the last paragraph.

[karim0028]

Re: MBA strategically defaults on mortgage

i think this has story been out for several months... Anywho, a rational decision cannot be faulted and average consumers are the last to wake up and the first to be sheared. I keep/have been telling a friend of mine to default on his condo in sacramento; he is ~150K underwater after putting down 80K... But, he still worries about his credit score.... Unbelievable; even when there is no collection impact on him since in cali purchase money loans are non-recourse, he still hasn't done it.... Emotions will kill you financially.

[don]

Re: MBA strategically defaults on mortgage

"Right now we’re headed for a perfect storm: An unprecedented concentration of income and wealth at the top, a record amount of secret money flooding our democracy, and a public in the aftershock of the Great Recession becoming increasingly angry and cynical about government." Robert Reich (yesterday)

If there are no clear moves towards prosecuting the fraud now so obvious, the fat lady has sung.

No problemo. There's always our ultimate fail-safe, the Supreme Court....

“I think this is the world we live in, where two-career families are the norm and there are no constraints on the political activities of judicial spouses.”


For three decades, Mrs. Thomas has been a familiar figure among conservative activists in Washington — since before she met her husband of 23 years, Justice Clarence Thomas of the Supreme Court. But this year she has emerged in her most politically prominent role yet: Mrs. Thomas is the founder and head of a new nonprofit group, Liberty Central, dedicated to opposing what she characterizes as the leftist “tyranny” of President Obama and Democrats in Congress and to “protecting the core founding principles” of the nation.

It is the most partisan role ever for a spouse of a justice on the nation’s highest court, and Mrs. Thomas is just getting started. “Liberty Central will be bigger than the Tea Party movement,” she told Fox News in April, at a Tea Party rally in Atlanta.

But to some people who study judicial ethics, Mrs. Thomas’s activism is raising knotty questions, in particular about her acceptance of large, unidentified contributions for Liberty Central. She began the group in late 2009 with two gifts of $500,000 and $50,000, and because it is a 501(c)(4) nonprofit group, named for the applicable section of the federal tax code, she does not have to publicly disclose any contributors.

http://www.nytimes.com/2010/10/09/us...s.html?_r=1&hp

[GRG55]

Re: MBA strategically defaults on mortgage

"Right now we’re headed for a perfect storm: An unprecedented concentration of income and wealth at the top, a record amount of secret money flooding our democracy, and a public in the aftershock of the Great Recession becoming increasingly angry and cynical about government." Robert Reich (yesterday)

If there are no clear moves towards prosecuting the fraud now so obvious, the fat lady has sung.

Well it looks as though there's some attempt to prosecute someone.

The question I have is why is it only the small fry get closed and sued? While the TBTF get bailed out, keep their jobs and get invited to the White House...

FDIC May Seek More Than $1 Billion From Failed-Bank Executives

By Phil Mattingly - Oct 8, 2010 8:08 AM PT

The Federal Deposit Insurance Corp. has authorized lawsuits against more than 50 officers and directors of failed banks as the agency aims to recoup more than $1 billion in losses stemming from the credit crisis.

The lawsuits were authorized during closed sessions of the FDIC board and haven’t been made public. The agency, which has shuttered 294 lenders since the start of 2008, has held off court action while conducting settlement talks with executives whose actions may have led to bank collapses, Richard Osterman, the FDIC’s acting general counsel, said in an interview...

[Fiat Currency]

Re: MBA strategically defaults on mortgage

The idea that a consumer making a cold, rational economic decision about a mortgage is somehow "immoral" makes me furious. These same sanctimonious people have no problem with laying off thousands of people or tanking your 401(k) in the name of the "free martket", but Dog forbid the sheeple get uppitty.

Jeff for President in 2012 !! I feel the same way. The only thing that frightens me is the complete lack of action on the part of the average American. I mean, even in Iceland they throw eggs at least. What's happened to the "home of the brave"? Is it really as simple as putting Industrial fluoride in the water?

[aaron]

Re: MBA strategically defaults on mortgage

Jeff for President in 2012 !! I feel the same way. The only thing that frightens me is the complete lack of action on the part of the average American. I mean, even in Iceland they throw eggs at least. What's happened to the "home of the brave"? Is it really as simple as putting Industrial fluoride in the water?

Fluoride is possible, but I think you will find your answer in this book:

Bright-sided: How the Relentless Promotion of Positive Thinking Has Undermined America

http://www.amazon.com/Bright-sided-R...6644012&sr=1-7

[Starving Steve]

Re: MBA strategically defaults on mortgage

Well it looks as though there's some attempt to prosecute someone.

The question I have is why is it only the small fry get closed and sued? While the TBTF get bailed out, keep their jobs and get invited to the White House...

FDIC May Seek More Than $1 Billion From Failed-Bank Executives

By Phil Mattingly - Oct 8, 2010 8:08 AM PT

The Federal Deposit Insurance Corp. has authorized lawsuits against more than 50 officers and directors of failed banks as the agency aims to recoup more than $1 billion in losses stemming from the credit crisis.

The lawsuits were authorized during closed sessions of the FDIC board and haven’t been made public. The agency, which has shuttered 294 lenders since the start of 2008, has held off court action while conducting settlement talks with executives whose actions may have led to bank collapses, Richard Osterman, the FDIC’s acting general counsel, said in an interview...

Starving Steve's plan to put a complete stop to this crap in Washington, and other world capitols of debtor countries: HIKE interest rates to 20% or higher, and fast! Hike taxes, so that everyone feels the pain. Fire Ben Bernanke, and fire all of the central bankers in the debtor countries. Sell assets to the People's Bank of China. Let the debtors pay rent to the Peoples' Bank of China. Make the Obama bunch in Washington pay rent to the PBC. Go onto the gold standard, and fast! Jail the dead-beats and the bankers, both, for fraud. Shut-down the university economics departments for getting the world into this mess.

And as I write this, more than 71,000 corpses are collecting Social Security cheques. Some of the cheques are being paid to prisoners in U.S. prisons..........

I am losing faith in the U.S. system, especially faith in its dollar. No wonder China is upset.

And Canada's dollar is backed with U.S. dollars. Why? Trudeau was the genius who sold the Bank of Canada's gold? Gordon Brown sold the Bank of England's gold to back the Pound with U.S. dollars. Why? This is beyond me..........

Starving Steve is getting upset and bitter. If I were at U.C. Berkeley to-day, I would be in jail.

[ThePythonicCow]

Re: MBA strategically defaults on mortgage

..., the fat lady has sung.

It's too bad she looks like Eleanor Roosevelt and sounds like Tiny Tim.

[Down Under]

Re: MBA strategically defaults on mortgage

Jeff for President in 2012 !! I feel the same way. The only thing that frightens me is the complete lack of action on the part of the average American. I mean, even in Iceland they throw eggs at least. What's happened to the "home of the brave"? Is it really as simple as putting Industrial fluoride in the water?

Sure seems like the US needs a wake up call.

[flintlock]

Re: MBA strategically defaults on mortgage

I agree with Jeff for the most part but add this. Knowingly running up debt you cannot possibly pay for then bailing out on it is immoral in most cases. Be it corporation or individual. It's not always just a "strategic decision". ( Not saying everyone defaulting on a mortgage falls into this category!)I personally know people who played this debt game and lived quite well for years until it caught up with them. They will probably do it again if given the chance. The fact MBA is doing it as well does not make irresponsible behavior on individual's part okay.( Two wrongs don't make a right) I'm not really worried about this either way because a) whether or not it it's viewed as immoral means nothing. Only what is legal or not legal matters and b) It's unlikely people will get the chance again any time soon to hang themselves with mortgage debt like this.

I've just seen first hand how many gamed the system, especially towards the end of the housing bubble. HELOC loans maxed out to buy cars, boats, jewelry, and other items for cash. Sure, many people I suppose where "fooled" into believing house prices would always go up. But I also think that myth was a convenience that allow us behave childishly when it comes to how we handle money. I'm a believer in individual responsibility. People need to accept responsibility and move on. Not giving MBA a free pass, here, just a bit tired of the cries of "The big bad corporations made me do it". There is a morality problem in the US across the board, not just with corporations.