Free bank living – the HELOC replacement

[CA renter]

[quote=jpinpb][quote=briansd1]
I think that being $50,000 underwater it the tipping point that make homeowners want to walk.[/quote]

I think depending on property and location, I can see people holding on if they were 50k underwater. You know, if you were in a condo conversion and you were 50k under, then yes, I can see them walking. If you were in a SFH in a desired area, I can see people clinging if only 50k upside-down.

But at a certain point, the tendency is to stop paying. That is the trend. Sheeple lined up to buy w/no money down and then take HELOCs. They seem to be doing the same again. Whatever it takes, they have a “lifestyle” to maintain.

This behavior is basically being encouraged.[/quote]

Personally, I don’t think it has anything to do with being underwater, but rather the fact that many of these people were never really able to comfortably afford to pay the mortgages/debts they agreed to without the HELOC/cash-out refis that enabled them to pay off debt with more debt (resulting in the spiraling debt/credit bubble we’ve experienced).

As soon as prices stopped rising — even if they were just flat — the game was over. So many people were relying on their “home equity” to fund their lifestyles, there was no way to avoid an ugly ending to the credit bubble.

These people are being foreclosed on because they have *no other option.* People have been encouraged to take on so much debt (because it pleases our masters who earn interest and fees on all that debt!), there was no buffer left. They can’t access any more home equity-based credit, and they can’t sell for a profit/break-even, so they have no choice but to take the free ride and accept the foreclosure. They are being perfectly rational.

It would be nice to think that the govt/lenders will learn from this, but I highly doubt it. Based on all their rhetoric, they are still focused on propping up prices to unaffordable levels (and forcing us deeper in debt) rather than letting prices sink to levels where people can comfortably afford their homes…and have plenty of money left over to allocate to more important and productive endeavours.

Yes, the FB’s behavior has been encouraged all along.

[Arraya]

Half the world is “underwater”, in some sense. Personally, corporately, local municipality, or nationally

This is the nature of deflation as parties either A) Can no longer b) Never could c) Don’t see a benefit of servicing debt – Take your pick

At this stage of the game I’d say the “never coulds” are in the minority.

The “never coulds” represent the last stage of the debt pyramid and the first to get purged from the system as well as the minority. Liar loans were needed to keep the Ponzi going for a few more years

Forest – trees

When prices resume down again, as they will, it will exacerbate the problem – driving more entities to stop servicing debt, for one reason or another

It just the dynamics of the system.

fwiw – Out of the 780 billion in active student loans, only 40% are being serviced. The rest are in default or being deferred.

[Arraya]

Half the world is “underwater”, in some sense. Personally, corporately, local municipality, or nationally

This is the nature of deflation as parties either A) Can no longer b) Never could c) Don’t see a benefit of servicing debt – Take your pick

At this stage of the game I’d say the “never coulds” are in the minority.

The “never coulds” represent the last stage of the debt pyramid and the first to get purged from the system as well as the minority. Liar loans were needed to keep the Ponzi going for a few more years

Forest – trees

When prices resume down again, as they will, it will exacerbate the problem – driving more entities to stop servicing debt, for one reason or another

It just the dynamics of the system.

fwiw – Out of the 780 billion in active student loans, only 40% are being serviced. The rest are in default or being deferred.

[Arraya]

Half the world is “underwater”, in some sense. Personally, corporately, local municipality, or nationally

This is the nature of deflation as parties either A) Can no longer b) Never could c) Don’t see a benefit of servicing debt – Take your pick

At this stage of the game I’d say the “never coulds” are in the minority.

The “never coulds” represent the last stage of the debt pyramid and the first to get purged from the system as well as the minority. Liar loans were needed to keep the Ponzi going for a few more years

Forest – trees

When prices resume down again, as they will, it will exacerbate the problem – driving more entities to stop servicing debt, for one reason or another

It just the dynamics of the system.

fwiw – Out of the 780 billion in active student loans, only 40% are being serviced. The rest are in default or being deferred.

[Arraya]

Half the world is “underwater”, in some sense. Personally, corporately, local municipality, or nationally

This is the nature of deflation as parties either A) Can no longer b) Never could c) Don’t see a benefit of servicing debt – Take your pick

At this stage of the game I’d say the “never coulds” are in the minority.

The “never coulds” represent the last stage of the debt pyramid and the first to get purged from the system as well as the minority. Liar loans were needed to keep the Ponzi going for a few more years

Forest – trees

When prices resume down again, as they will, it will exacerbate the problem – driving more entities to stop servicing debt, for one reason or another

It just the dynamics of the system.

fwiw – Out of the 780 billion in active student loans, only 40% are being serviced. The rest are in default or being deferred.

[Arraya]

Half the world is “underwater”, in some sense. Personally, corporately, local municipality, or nationally

This is the nature of deflation as parties either A) Can no longer b) Never could c) Don’t see a benefit of servicing debt – Take your pick

At this stage of the game I’d say the “never coulds” are in the minority.

The “never coulds” represent the last stage of the debt pyramid and the first to get purged from the system as well as the minority. Liar loans were needed to keep the Ponzi going for a few more years

Forest – trees

When prices resume down again, as they will, it will exacerbate the problem – driving more entities to stop servicing debt, for one reason or another

It just the dynamics of the system.

fwiw – Out of the 780 billion in active student loans, only 40% are being serviced. The rest are in default or being deferred.

[scaredyclassic]

i pay off the bulk of my student loans in approx 18 months, after spending what seems liek the bulk of my adulthood sending in all of my money to them.

[scaredyclassic]

i pay off the bulk of my student loans in approx 18 months, after spending what seems liek the bulk of my adulthood sending in all of my money to them.

[scaredyclassic]

i pay off the bulk of my student loans in approx 18 months, after spending what seems liek the bulk of my adulthood sending in all of my money to them.

[scaredyclassic]

i pay off the bulk of my student loans in approx 18 months, after spending what seems liek the bulk of my adulthood sending in all of my money to them.

[scaredyclassic]

i pay off the bulk of my student loans in approx 18 months, after spending what seems liek the bulk of my adulthood sending in all of my money to them.

[Nor-LA-SD-guy]

Well they have been printing money like mad (the banks have enjoyed it I am sure), they (the gov, you know them) just can’t seem to find a way to get it into the hands of the ordinary people without it looking like a direct handout.

They should just quit pretending and just mail Checks to every U.S. citizen.

It would have been much more effective and less expensive then giving the money to the banks and hoping they would lend it out.

[Nor-LA-SD-guy]

Well they have been printing money like mad (the banks have enjoyed it I am sure), they (the gov, you know them) just can’t seem to find a way to get it into the hands of the ordinary people without it looking like a direct handout.

They should just quit pretending and just mail Checks to every U.S. citizen.

It would have been much more effective and less expensive then giving the money to the banks and hoping they would lend it out.

[Nor-LA-SD-guy]

Well they have been printing money like mad (the banks have enjoyed it I am sure), they (the gov, you know them) just can’t seem to find a way to get it into the hands of the ordinary people without it looking like a direct handout.

They should just quit pretending and just mail Checks to every U.S. citizen.

It would have been much more effective and less expensive then giving the money to the banks and hoping they would lend it out.

[Nor-LA-SD-guy]

Well they have been printing money like mad (the banks have enjoyed it I am sure), they (the gov, you know them) just can’t seem to find a way to get it into the hands of the ordinary people without it looking like a direct handout.

They should just quit pretending and just mail Checks to every U.S. citizen.

It would have been much more effective and less expensive then giving the money to the banks and hoping they would lend it out.

[Author]

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