[quote=sdcellar]Okay, how about we end this “argument” and try to simplify things a bit. Rt.66, do you think it’s out of the question that some homeowners will give themselves their own form of debt relief simply by ignoring their second for some period of time?
Maybe their credit will take a hit. Maybe they’ll have this nasty debt liability they’ll have to take care of some number of years down the road. Maybe a lot of things, but they’ll get to “keep” their house, keep junior in the same school and maybe down the road when “life is better” they (believe) they’ll be able to get things back in order.
Does this seem like a reasonable premise to you? There is one solid argument that I can think of and another one that’s hedgey, but not interesting. Anyway, what do you think?[/quote]
Yes, absolutely I can see that happening in a few cases. I can also see some people trying voodoo and witchcraft to turn all record of their mortgage at the bank into dust. But this is not a debate on what a few people will do even hundreds is it.
This is a debate on whether or not the statement is a valid Bull argument.
Your hypothetical family I guess might look at it like renting. The second is not going away so whatever amount they are underwater they will remain and actually fees and interest will accrue, so this hypothetical family will be living everyday knowing the piper to be paid is getting fatter. And they know someday they will have to pay the principal, penalties and interest to the second or go short sale or into foreclosure.
Also there is the non-stop debt collector calls. And then there is the fact that a foreclosure is bad enough on your record but keeping the asset and having record of not paying the debt for three years while junior finishes high school well that’s going to look really, really bad. Plus the 5-7 year clock on that bad mark does not start until the debt is discharged by payment or foreclosure or short.
So those are probably just a few reasons we don’t see it happening.
I did not say no one is doing something like this I said:
“I’d like to see some proof it’s a regular occurrence”
“Fictitious mass occurrence”
“This issue of seconds is not going to prevent an appreciable number of foreclosures”
I doubt the numbers are large enough to even be a blip in REO numbers. I merely asked for just one instance of proof this was happening, to illustrate that it’s such a small number as to be invisible.
I’m saying that the number from that category is so small as to be seemingly undocumentable and thus will not be a positive factor for RE or for the dismal REO numbers and is NOT a good bull argument.
