Confused with the current market

[Arraya]

[quote=sdrealtor]Arraya
Do you think your judgement is clouded by the fact you arent making payments right now and thus have become desensitized to that and can easily project that behavior onto the rest of the US population?[/quote]

haha… You know, sdr, projection may not be the psychological condition at play here, between the two of us. I’d venture to say there is one, though.

I can understand why you would think that, though. Still, It does not take being in the same position to figure out that somebody in an upside down mortgage is a default risk. It’s pretty much a no brainer. The worse the perception of the market, the bigger risk of walking. I’ve helped a few people with there decisions. All they need is a little encouragement. It can be a very freeing experience when the go through with it. I try do good where I can;)

40% upside down in SD is a daunting number, isn’t it.

On that note: Mish had a very interesting post regarding a mass fear and shame campaign by lenders to get people to stay in there homes. People are being psychologically coerced into not walking, much like during the run up of the bubble but with reverse emotional tactics. This has kept strategic walkers at historical norms.

Despite reports that homeowners are increasingly “walking away” from their mortgages, most homeowners continue to make their payments even when they are significantly underwater. This article suggests that most homeowners choose not to strategically default as a result of two emotional forces: 1) the desire to avoid the shame and guilt of foreclosure; and 2) exaggerated anxiety over foreclosure’s perceived consequences. Moreover, these emotional constraints are actively cultivated by the government and other social control agents in order to encourage homeowners to follow social and moral norms related to the honoring of financial obligations – and to ignore market and legal norms under which strategic default might be both viable and the wisest financial decision. Norms governing homeowner behavior stand in sharp contrast to norms governing lenders, who seek to maximize profits or minimize losses irrespective of concerns of morality or social responsibility. This norm asymmetry leads to distributional inequalities in which individual homeowners shoulder a disproportionate burden from the housing collapse.

Interestingly, Latvia had laws which entailed indentured servitude for walking from a mortgage and it back fired, the people revolted. Apparently, the psychological tactics work better for keeping people debt slaves.

[moneymaker]

I like what AN is saying. It is pretty much a wash, just buy the right house for what you can afford and don’t try to time it. That’s assuming you’re going to live in it. If you are an investor then my advice would be to keep hoarding your cash(while the dollar declines).

[moneymaker]

I like what AN is saying. It is pretty much a wash, just buy the right house for what you can afford and don’t try to time it. That’s assuming you’re going to live in it. If you are an investor then my advice would be to keep hoarding your cash(while the dollar declines).

[moneymaker]

I like what AN is saying. It is pretty much a wash, just buy the right house for what you can afford and don’t try to time it. That’s assuming you’re going to live in it. If you are an investor then my advice would be to keep hoarding your cash(while the dollar declines).

[moneymaker]

I like what AN is saying. It is pretty much a wash, just buy the right house for what you can afford and don’t try to time it. That’s assuming you’re going to live in it. If you are an investor then my advice would be to keep hoarding your cash(while the dollar declines).

[moneymaker]

I like what AN is saying. It is pretty much a wash, just buy the right house for what you can afford and don’t try to time it. That’s assuming you’re going to live in it. If you are an investor then my advice would be to keep hoarding your cash(while the dollar declines).

[sdrealtor]

Arraya
Not trying to be funny, trying to understand the psychology. I wasnt sure what to think but it seems like you have answered the question. While being upside down creates a default risk, everyone handles that differently. It appears you have become so densitized to it that not only is walking easy for you but you gleefully encourage others to do it. For me, paying my credit card a day late leads me to break out in hives buy I know not everyone is that way. I dont judge people for the decisions they make but I dont encourage them either.

As for Mish, I wonder what he would do. Writing about it is one thing, doing it an entirely different thing.

[sdrealtor]

Arraya
Not trying to be funny, trying to understand the psychology. I wasnt sure what to think but it seems like you have answered the question. While being upside down creates a default risk, everyone handles that differently. It appears you have become so densitized to it that not only is walking easy for you but you gleefully encourage others to do it. For me, paying my credit card a day late leads me to break out in hives buy I know not everyone is that way. I dont judge people for the decisions they make but I dont encourage them either.

As for Mish, I wonder what he would do. Writing about it is one thing, doing it an entirely different thing.

[sdrealtor]

Arraya
Not trying to be funny, trying to understand the psychology. I wasnt sure what to think but it seems like you have answered the question. While being upside down creates a default risk, everyone handles that differently. It appears you have become so densitized to it that not only is walking easy for you but you gleefully encourage others to do it. For me, paying my credit card a day late leads me to break out in hives buy I know not everyone is that way. I dont judge people for the decisions they make but I dont encourage them either.

As for Mish, I wonder what he would do. Writing about it is one thing, doing it an entirely different thing.

[sdrealtor]

Arraya
Not trying to be funny, trying to understand the psychology. I wasnt sure what to think but it seems like you have answered the question. While being upside down creates a default risk, everyone handles that differently. It appears you have become so densitized to it that not only is walking easy for you but you gleefully encourage others to do it. For me, paying my credit card a day late leads me to break out in hives buy I know not everyone is that way. I dont judge people for the decisions they make but I dont encourage them either.

As for Mish, I wonder what he would do. Writing about it is one thing, doing it an entirely different thing.

[sdrealtor]

Arraya
Not trying to be funny, trying to understand the psychology. I wasnt sure what to think but it seems like you have answered the question. While being upside down creates a default risk, everyone handles that differently. It appears you have become so densitized to it that not only is walking easy for you but you gleefully encourage others to do it. For me, paying my credit card a day late leads me to break out in hives buy I know not everyone is that way. I dont judge people for the decisions they make but I dont encourage them either.

As for Mish, I wonder what he would do. Writing about it is one thing, doing it an entirely different thing.

[Scarlett]

[quote Arraya]

Now, it looks like the current rally is over and we are getting ready for the next leg down.

Stay liquid.[/quote]

Interesting graph. Love it. I think that IS the shape. Do you have time units for the X axes?

[Scarlett]

[quote Arraya]

Now, it looks like the current rally is over and we are getting ready for the next leg down.

Stay liquid.[/quote]

Interesting graph. Love it. I think that IS the shape. Do you have time units for the X axes?

[Scarlett]

[quote Arraya]

Now, it looks like the current rally is over and we are getting ready for the next leg down.

Stay liquid.[/quote]

Interesting graph. Love it. I think that IS the shape. Do you have time units for the X axes?

[Scarlett]

[quote Arraya]

Now, it looks like the current rally is over and we are getting ready for the next leg down.

Stay liquid.[/quote]

Interesting graph. Love it. I think that IS the shape. Do you have time units for the X axes?

[Author]

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