Unsecured debts - Home equity loans and Credit Cards

[youbet]

I guess this means we should, as a country, be proactive and begin working on a bail out plan for folks who have lousy credit ratings due to walking away from mortgages or credit card debt. When millions have no ability to borrow due to stinky credit reports, it will hurt the economy and make their lives tough. We'll need to help, to restore their credit to AAA and give them a fresh start. And at tax payers expense, of course!

[Martha]

http://www.early-retirement.org/foru...ims-30768.html

[FinanceDude]

Quote:

Originally Posted by youbet I guess this means we should, as a country, be proactive and begin working on a bail out plan for folks who have lousy credit ratings due to walking away from mortgages or credit card debt. When millions have no ability to borrow due to stinky credit reports, it will hurt the economy and make their lives tough. We'll need to help, to restore their credit to AAA and give them a fresh start. And at tax payers expense, of course!

Aren't we already doing that??

[youbet]

Quote:

Originally Posted by FinanceDude Aren't we already doing that??

Not as far as I know. I think that currently if you create a crappy credit report for yourself, you have to live with it. Is there something I'm missing?

[Nanita8140]

Quote:

Originally Posted by jIMOh The bubble were are in now is a credit bubble. Wait, I think that bubble popped around 6 months ago (a year ago?) and is still popping. If you didn't hear it, go outside and listen. Maybe take a walk around the block and see how many homes are for sale in your neighborhood. The sub prime mess is just a small fraction of the credit bubble and people spending more than they could afford.

There is a distinction between credit card debt and a mortgage debt. One being unsecured and the other secured. The mortgage crisis has nothing to do with what another bubble "Many" are now talking and writing about which is an UNSECURE CREDIT CARD BUBBLE. When you enter into a contract for a mortgage, you can legally walk away as the bank is left with the house. People now no longer have "equity" to continue their spending spree so they are now taking out their credit cards to keep the party going. Do some research....google it.

[Retire Soon]

Those of you who watched CBS 60 Minutes on Sunday either on TV or on the web (as someone gave us the link for) may have seen the woman who was interviewed with her husband. I believe they were still living in the home they had purchased in Stockton, California with a subprime loan. She said (not in these exact words) that she saw no reason to stay in a home that now had an upside down mortgage. The interviewer asked her if that meant she was going to stop making the payments. She answered yes and explained that it was because that this was the only advice she'd been given. The source of the advice was never divulged by her, nor did the interviewer think to ask her where it came from. But, I hope it didn't come from her minister. She said it just made no sense to make payments on a house that was now worth less than the mortgage amount, and it could take years to ever catch up. She seemed to feel absolutely no remorse, shame or guilt for breaking her promise to the bank. I hope that this immoral attitude does not become a trend or we could be in for some major problems if average home values drop another 20% or 30%.

[dex]

Quote:

Originally Posted by Retire Soon She seemed to feel absolutely no remorse, shame or guilt for breaking her promise to the bank. I hope that this immoral attitude does not become a trend or we could be in for some major problems if average home values drop another 20% or 30%.

Give up on hope - that immoral attitude is all over the place.