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Old 10-02-2011, 06:02 PM   #21
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Government programs I'd guess. Those mortgage programs, to my knowledge, addressed people who were behind or had adjustable rates that shot up once the initial period was over. We weren't the only ones. We'd heard from other we know that they tried to contact the bank about some kind of relief and they were told if you weren't behind in your payments, you were out of luck.
Sounds to me like the bank saying no thanks. They cut back on personnel and reduced salaries and now can't deal with the volume of situations that require individual attention. If you don't meet whatever standard they now have, it's no, or as M. Paquette suggests, miss a payment so you can get to someone that is empowered to negotiate.
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Old 10-02-2011, 06:52 PM   #22
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I do feel for many homebuyers, even investors. How were they to know what a bubble was, never mind the extreme bubble that existed. They do rely on some reasonable guidance from the so called professionals. What is a home worth? I guess you could say it's worth the stream of income it could provide if rented and paying more is foolish. Or you could say it's worth what the market is willing to pay. In this case the banks and government provided the market for the extreme values and thus are most to blame for the cost run up.
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Old 10-02-2011, 07:02 PM   #23
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I do feel for many homebuyers, even investors. How were they to know what a bubble was, never mind the extreme bubble that existed. They do rely on some reasonable guidance from the so called professionals. What is a home worth? I guess you could say it's worth the stream of income it could provide if rented and paying more is foolish. Or you could say it's worth what the market is willing to pay. In this case the banks and government provided the market for the extreme values and thus are most to blame for the cost run up.
I think the buck stops with the buyer. I lost a lot of money in the high tech bubble but I never expected someone else to bail me out for the choices that I made. I do think I am a bit wiser from the experience so I chalk it up to the price of tuition.

That being said, I feel very sad for the situation that some people are currently in. These are very painful times.
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Old 10-02-2011, 07:07 PM   #24
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Government programs I'd guess.
Sure you would. Private companies behave stupidly, naturally that's the government's fault.
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Old 10-02-2011, 07:19 PM   #25
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I think the buck stops with the buyer. I lost a lot of money in the high tech bubble but I never expected someone else to bail me out for the choices that I made. I do think I am a bit wiser from the experience so I chalk it up to the price of tuition.

That being said, I feel very sad for the situation that some people are currently in. These are very painful times.
I agree. Very painful times. But the buck can't stop with the buyer because most aren't in the position to make good on the debt. So the buck stops with society thru taxes and fees. In that light I think it is imperative that one should reasonably be able to expect that the other cogs in the wheel are acting prudently, ethically, and competently. The tech bubble really isn't a fair comparison because you couldn't walkaway from your losses.
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Old 10-02-2011, 07:44 PM   #26
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I agree. Very painful times. But the buck can't stop with the buyer because most aren't in the position to make good on the debt. So the buck stops with society thru taxes and fees. In that light I think it is imperative that one should reasonably be able to expect that the other cogs in the wheel are acting prudently, ethically, and competently. The tech bubble really isn't a fair comparison because you couldn't walkaway from your losses.
Good points.
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Old 10-03-2011, 05:16 AM   #27
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Some people just bought at a bad time. They were doing everything right... just timing. It is sad.

I lost money on some individual stocks I bought during the tech bubble... It was a lot of money (to me it was a lot... and probably would be to you). It hurt. But it did not ruin me because the investments were just part of my holdings... not excessive.


IMO - the really sad part is the job losses... which may bring about some defaults.

Fortunately, those people have a way out... bankruptcy or some sort of negotiated settlement with the bank.

Working borrowers... especially those that are solvent.... the banks are not going to do anything (IMO) because it would represent a large part of their mortgage portfolio. From their perspective they lost money on a decade of mortgage business. They are going to do everything they can to minimize their losses.
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Old 10-03-2011, 06:23 AM   #28
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I feel that if someone is trying to hurt me, he belongs hurt himself. The mortgage scam over the recent period has been so egregious and corrupt that IMO anyone who can safely walk away from a large debt should.

Ha
So, being responsible for ones actions and decisions can be quite a burden.
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Old 10-03-2011, 06:45 AM   #29
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Love that quote, which I heard often in my youth.
Also, "don't bite off more than you can chew" applies to (any) debt.
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Old 10-03-2011, 09:45 AM   #30
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So, being responsible for ones actions and decisions can be quite a burden.
Whatever
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Old 10-03-2011, 03:34 PM   #31
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Sure you would. Private companies behave stupidly, naturally that's the government's fault.
Quite often, yes. Private companies react to incentives, and often the gov't gives them incentives to act stupidly. I'm sure they can act stupidly all by themselves, but they sure do get encouraged to do so by the gov't. Unintended consequences are the result of gov't action. I think that's one of the laws of nature.
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Old 10-03-2011, 03:37 PM   #32
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So, being responsible for ones actions and decisions can be quite a burden.
It sure can be when the others involved are rewarded for their irresponsibility and damaging actions. If the other players in the mortgage and housing mess were being held responsible I doubt Haha would feel the way he does. I can certainly see his point.
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Old 10-03-2011, 04:40 PM   #33
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I have one case in point of people being responsible and being screwed by the market. Friend's kid and hubby, both college grads who both worked full time while in college and after. They graduated before the peak of the housing bubble. Saved for a couple of years to get a down payment, and then bought a modest house <125k with 20% down.

A couple of years pass and the market goes to ****. They are transferred for work and must sell. One year, while paying for two residences, and 100 showings later they sell their first house after borrowing an additional 25k from their parental units to bring to the closing. They lost 50k in less than 5 years.

These kids are screwed. They did nothing wrong. They went to college, studied and worked hard, worked hard after graduation and are still burdened by debt created by the stupid housing market. What do you have to say to them besides, sucks to be you.
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Old 10-03-2011, 05:03 PM   #34
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And the article didnít even mention the dreaded 1099-C. The one where you have to pay tax on the debt you walked away from. Now you gotta pay your debts and pay your taxes ... whatís this country coming to, anyway?
Just to clairfy.... if the bank sends you a 1099-C, they can not go after that debt... the C means cancelled.... if they tell you they cancelled your debt then you don't owe them anything anymore... just like if you paid if off..
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Old 10-03-2011, 05:12 PM   #35
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I have one case in point of people being responsible and being screwed by the market. Friend's kid and hubby, both college grads who both worked full time while in college and after. They graduated before the peak of the housing bubble. Saved for a couple of years to get a down payment, and then bought a modest house <125k with 20% down.

A couple of years pass and the market goes to ****. They are transferred for work and must sell. One year, while paying for two residences, and 100 showings later they sell their first house after borrowing an additional 25k from their parental units to bring to the closing. They lost 50k in less than 5 years.

These kids are screwed. They did nothing wrong. They went to college, studied and worked hard, worked hard after graduation and are still burdened by debt created by the stupid housing market. What do you have to say to them besides, sucks to be you.
Something about them just doesn't garner a lot of sympathy from me. I don't think I'm not callous, but I just don't see why I should feel really bad for them. They have jobs, they have food, clothing and shelter -- they seem to be thriving and I bet they're very resilient -- so they lost some money and have some debt. I'm afraid I can't see them as "victims" of a stupid housing market.
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Old 10-03-2011, 05:33 PM   #36
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Something about them just doesn't garner a lot of sympathy from me. I don't think I'm not callous, but I just don't see why I should feel really bad for them. They have jobs, they have food, clothing and shelter -- they seem to be thriving and I bet they're very resilient -- so they lost some money and have some debt. I'm afraid I can't see them as "victims" of a stupid housing market.
Well that's fine. So they have college debt and outrageous housing debt, but you have no sympathy. Good on you. They are not thriving. They are struggling to make ends meet every day. They are doing all the right things and are still barely making it in this economy. I can't even imagine how out of touch you are.
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Old 10-03-2011, 05:43 PM   #37
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Unintended consequences are the result of gov't action. I think that's one of the laws of nature.
Unintended consequences are the result of most actions, especially actions from large, faceless, organizations such as governments...or corporations.
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Old 10-03-2011, 05:44 PM   #38
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I have been waiting for this article to get published for the last three years. There have been dozen articles talking about the benefits of strategic defaulting even in recourse states like FL. I think this the first I have seen one taking about banks and credit unions going after strategic defaults. The not uncommon case of people buying another house while letting their existing property go into foreclosure is especially galling.

We have a system in this country which ensures that when someone gets over their head in debt, they can get a fresh start, while treating all of the creditors reasonably fairly. It is is called bankruptcy and seems to me that most people who default on a mortgage should file for it.
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Old 10-03-2011, 05:47 PM   #39
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Note that the original post related to a vacation home, where the rules are very different than on a primary residence (depending on the state). With a second home, if your willing to file BK you can get a cramdown (principal reduction). Of course that does mean going to the financial cleaners in general.
On the larger topic discussed, one wonders if the home ownership model and the mobility folks have are really consistent. If one changes jobs every 5-7 years and assuming home prices are stable by the time one pays the private real estate transfer tax (realator, title company and the like) one looses money on the house every time. (Not counting the equivalent rent offset). It is like in the old days preachers never owned a house because they move so often and the house was furnished by the church (tax free to boot). IMHO unless you see yourself staying for more than 10 years you should no longer buy. There are better ways to save money than a house.
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Old 10-03-2011, 06:13 PM   #40
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Well that's fine. So they have college debt and outrageous housing debt, but you have no sympathy. Good on you. They are not thriving. They are struggling to make ends meet every day. They are doing all the right things and are still barely making it in this economy. I can't even imagine how out of touch you are.
That's why there's an ignore list.
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