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  • December 30, 2007 at 7:47 PM #126819
    blew_it
    Participant

    If the debt is non-recourse, and as long as the buyer is not committing fraud in his new loan application, and since the tax consequences have been negated by the passage of HR 3648, it seems what he is doing is completely legal, logical, moral, and to do anything else would be irrational. He’s not breaking any agreement he made with anyone.

    IMHO, the consequences will be allocated appropriately: his credit will be wrecked, and the lender (or CDO buyer) will get what they deserve, which is a huge loss due to their non-existent lending standards (or a huge loss on an investment they didn’t understand). The professionals in charge of managing the risk and who blew it will, appropriately, take almost all of the hit.

    Anyone who has been sitting on the sidelines throughout this madness should get a premium rate as a reward for their prudence. So what’s with all the crying and hand-wringing?

    December 30, 2007 at 8:27 PM #126583
    The OC Scam
    Participant

    This is just another example of how awesome this country is and will always be forever!!! I LOVE AMERICA THE HOME OF BRAVE!! Thank God He doesn’t care as long it is legal then do it! Walk away from your home, kids, job, family, ill love ones and whatever else you want. What the hell who cares??? As long as the ship keeps moving…

    December 30, 2007 at 8:27 PM #126741
    The OC Scam
    Participant

    This is just another example of how awesome this country is and will always be forever!!! I LOVE AMERICA THE HOME OF BRAVE!! Thank God He doesn’t care as long it is legal then do it! Walk away from your home, kids, job, family, ill love ones and whatever else you want. What the hell who cares??? As long as the ship keeps moving…

    December 30, 2007 at 8:27 PM #126752
    The OC Scam
    Participant

    This is just another example of how awesome this country is and will always be forever!!! I LOVE AMERICA THE HOME OF BRAVE!! Thank God He doesn’t care as long it is legal then do it! Walk away from your home, kids, job, family, ill love ones and whatever else you want. What the hell who cares??? As long as the ship keeps moving…

    December 30, 2007 at 8:27 PM #126820
    The OC Scam
    Participant

    This is just another example of how awesome this country is and will always be forever!!! I LOVE AMERICA THE HOME OF BRAVE!! Thank God He doesn’t care as long it is legal then do it! Walk away from your home, kids, job, family, ill love ones and whatever else you want. What the hell who cares??? As long as the ship keeps moving…

    December 30, 2007 at 8:27 PM #126844
    The OC Scam
    Participant

    This is just another example of how awesome this country is and will always be forever!!! I LOVE AMERICA THE HOME OF BRAVE!! Thank God He doesn’t care as long it is legal then do it! Walk away from your home, kids, job, family, ill love ones and whatever else you want. What the hell who cares??? As long as the ship keeps moving…

    December 30, 2007 at 9:08 PM #126598
    TheBreeze
    Participant

    IMHO, the consequences will be allocated appropriately: his credit will be wrecked, and the lender (or CDO buyer) will get what they deserve, which is a huge loss due to their non-existent lending standards (or a huge loss on an investment they didn’t understand). The professionals in charge of managing the risk and who blew it will, appropriately, take almost all of the hit.

    I doubt the consequences will be allocated appropriately. Some of these ridiculous mortgages were sold to hedge funds and in that case the risk is likely to be allocated appropriately. However, some mortgages were sold to pensions so it could be that some unsuspecting group of pensioners will have to take the hit on this. Possibly the pension manager will lose his job, but he won’t have to give back the salary and bonuses he made in previous years.

    Another possibility is that one of the Federal Home Loan Banks is now holding this loan as collateral. The broker indicated somewhere in the linked thread that Countrywide wrote the original $800K mortgage. Countrywide has recently off-loaded hundreds of billions in mortgages that they owned to the Federal Home Loan Banks (the FHLBs have a quasi-governmental guarantee similar to Fannie and Freddie). If this loan was pledged to one of the FHLBs and Countrywide goes bankrupt, the American taxpayer now gets to take the loss on this loan. That’s not a fair allocation of risk at all.

    Perhaps SD Realtor is right and mortgage loans in California need to be made recourse instead of non-recourse in order to better protect taxpayers. Personally, I would like to see 20% down become mandatory on all loans. If the borrower has a good chunk of skin in the game, he’s very unlikely to pull this crap and leave taxpayers holding the bag.

    December 30, 2007 at 9:08 PM #126756
    TheBreeze
    Participant

    IMHO, the consequences will be allocated appropriately: his credit will be wrecked, and the lender (or CDO buyer) will get what they deserve, which is a huge loss due to their non-existent lending standards (or a huge loss on an investment they didn’t understand). The professionals in charge of managing the risk and who blew it will, appropriately, take almost all of the hit.

    I doubt the consequences will be allocated appropriately. Some of these ridiculous mortgages were sold to hedge funds and in that case the risk is likely to be allocated appropriately. However, some mortgages were sold to pensions so it could be that some unsuspecting group of pensioners will have to take the hit on this. Possibly the pension manager will lose his job, but he won’t have to give back the salary and bonuses he made in previous years.

    Another possibility is that one of the Federal Home Loan Banks is now holding this loan as collateral. The broker indicated somewhere in the linked thread that Countrywide wrote the original $800K mortgage. Countrywide has recently off-loaded hundreds of billions in mortgages that they owned to the Federal Home Loan Banks (the FHLBs have a quasi-governmental guarantee similar to Fannie and Freddie). If this loan was pledged to one of the FHLBs and Countrywide goes bankrupt, the American taxpayer now gets to take the loss on this loan. That’s not a fair allocation of risk at all.

    Perhaps SD Realtor is right and mortgage loans in California need to be made recourse instead of non-recourse in order to better protect taxpayers. Personally, I would like to see 20% down become mandatory on all loans. If the borrower has a good chunk of skin in the game, he’s very unlikely to pull this crap and leave taxpayers holding the bag.

    December 30, 2007 at 9:08 PM #126768
    TheBreeze
    Participant

    IMHO, the consequences will be allocated appropriately: his credit will be wrecked, and the lender (or CDO buyer) will get what they deserve, which is a huge loss due to their non-existent lending standards (or a huge loss on an investment they didn’t understand). The professionals in charge of managing the risk and who blew it will, appropriately, take almost all of the hit.

    I doubt the consequences will be allocated appropriately. Some of these ridiculous mortgages were sold to hedge funds and in that case the risk is likely to be allocated appropriately. However, some mortgages were sold to pensions so it could be that some unsuspecting group of pensioners will have to take the hit on this. Possibly the pension manager will lose his job, but he won’t have to give back the salary and bonuses he made in previous years.

    Another possibility is that one of the Federal Home Loan Banks is now holding this loan as collateral. The broker indicated somewhere in the linked thread that Countrywide wrote the original $800K mortgage. Countrywide has recently off-loaded hundreds of billions in mortgages that they owned to the Federal Home Loan Banks (the FHLBs have a quasi-governmental guarantee similar to Fannie and Freddie). If this loan was pledged to one of the FHLBs and Countrywide goes bankrupt, the American taxpayer now gets to take the loss on this loan. That’s not a fair allocation of risk at all.

    Perhaps SD Realtor is right and mortgage loans in California need to be made recourse instead of non-recourse in order to better protect taxpayers. Personally, I would like to see 20% down become mandatory on all loans. If the borrower has a good chunk of skin in the game, he’s very unlikely to pull this crap and leave taxpayers holding the bag.

    December 30, 2007 at 9:08 PM #126835
    TheBreeze
    Participant

    IMHO, the consequences will be allocated appropriately: his credit will be wrecked, and the lender (or CDO buyer) will get what they deserve, which is a huge loss due to their non-existent lending standards (or a huge loss on an investment they didn’t understand). The professionals in charge of managing the risk and who blew it will, appropriately, take almost all of the hit.

    I doubt the consequences will be allocated appropriately. Some of these ridiculous mortgages were sold to hedge funds and in that case the risk is likely to be allocated appropriately. However, some mortgages were sold to pensions so it could be that some unsuspecting group of pensioners will have to take the hit on this. Possibly the pension manager will lose his job, but he won’t have to give back the salary and bonuses he made in previous years.

    Another possibility is that one of the Federal Home Loan Banks is now holding this loan as collateral. The broker indicated somewhere in the linked thread that Countrywide wrote the original $800K mortgage. Countrywide has recently off-loaded hundreds of billions in mortgages that they owned to the Federal Home Loan Banks (the FHLBs have a quasi-governmental guarantee similar to Fannie and Freddie). If this loan was pledged to one of the FHLBs and Countrywide goes bankrupt, the American taxpayer now gets to take the loss on this loan. That’s not a fair allocation of risk at all.

    Perhaps SD Realtor is right and mortgage loans in California need to be made recourse instead of non-recourse in order to better protect taxpayers. Personally, I would like to see 20% down become mandatory on all loans. If the borrower has a good chunk of skin in the game, he’s very unlikely to pull this crap and leave taxpayers holding the bag.

    December 30, 2007 at 9:08 PM #126859
    TheBreeze
    Participant

    IMHO, the consequences will be allocated appropriately: his credit will be wrecked, and the lender (or CDO buyer) will get what they deserve, which is a huge loss due to their non-existent lending standards (or a huge loss on an investment they didn’t understand). The professionals in charge of managing the risk and who blew it will, appropriately, take almost all of the hit.

    I doubt the consequences will be allocated appropriately. Some of these ridiculous mortgages were sold to hedge funds and in that case the risk is likely to be allocated appropriately. However, some mortgages were sold to pensions so it could be that some unsuspecting group of pensioners will have to take the hit on this. Possibly the pension manager will lose his job, but he won’t have to give back the salary and bonuses he made in previous years.

    Another possibility is that one of the Federal Home Loan Banks is now holding this loan as collateral. The broker indicated somewhere in the linked thread that Countrywide wrote the original $800K mortgage. Countrywide has recently off-loaded hundreds of billions in mortgages that they owned to the Federal Home Loan Banks (the FHLBs have a quasi-governmental guarantee similar to Fannie and Freddie). If this loan was pledged to one of the FHLBs and Countrywide goes bankrupt, the American taxpayer now gets to take the loss on this loan. That’s not a fair allocation of risk at all.

    Perhaps SD Realtor is right and mortgage loans in California need to be made recourse instead of non-recourse in order to better protect taxpayers. Personally, I would like to see 20% down become mandatory on all loans. If the borrower has a good chunk of skin in the game, he’s very unlikely to pull this crap and leave taxpayers holding the bag.

    December 30, 2007 at 10:43 PM #126623
    SD Realtor
    Participant

    “Personally, I would like to see 20% down become mandatory on all loans. If the borrower has a good chunk of skin in the game, he’s very unlikely to pull this crap and leave taxpayers holding the bag”

    Breeze not a bad idea.

    SD Realtor

    December 30, 2007 at 10:43 PM #126781
    SD Realtor
    Participant

    “Personally, I would like to see 20% down become mandatory on all loans. If the borrower has a good chunk of skin in the game, he’s very unlikely to pull this crap and leave taxpayers holding the bag”

    Breeze not a bad idea.

    SD Realtor

    December 30, 2007 at 10:43 PM #126792
    SD Realtor
    Participant

    “Personally, I would like to see 20% down become mandatory on all loans. If the borrower has a good chunk of skin in the game, he’s very unlikely to pull this crap and leave taxpayers holding the bag”

    Breeze not a bad idea.

    SD Realtor

    December 30, 2007 at 10:43 PM #126860
    SD Realtor
    Participant

    “Personally, I would like to see 20% down become mandatory on all loans. If the borrower has a good chunk of skin in the game, he’s very unlikely to pull this crap and leave taxpayers holding the bag”

    Breeze not a bad idea.

    SD Realtor

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