Report shows strategic defaults increasing

[CA renter]

[quote=SD Realtor]No scaredy the price of credit has nothing to do with the expectation of housing prices. The price of credit drives housing prices.

The price of credit is ultimately, when you trace it back up the chain, is driven by the bond market. Yes risk is inherent in the price of credit but if credit were really determined by risk then in 2007 when we first started seeing spiraling defaults credit should have skyrocketed but it did not because the dominoes would have all fallen, rightfully so I might add.

So we have punted the risk from the consumer past the lenders, and now it is at the federal level. One would think it stops there because our creditors are foreign govts now. It should and we will see.[/quote]

Have to agree with scaredy on this one.

Interest rates were held too low by the Fed, and they were also held too low via credit default swaps. Note that when interest rates **should have risen** (in the 2005-2008 period, when people in the financial industry started getting scared), the CDS market took off like a rocket. This gave bondholders/debt purchasers a false sense of security, so the risk was not priced in the bond market — you saw it in the derivatives market.
————-

Some of us would indeed argue that debt that is not self-liquidating should not be freely available; and when it is, it should be fairly expensive to account for the risk.

If we want a mortgage market, the govt should not be involved in setting interest rates, either through direct/indirect guarantees, or direct lending. Again, this causes the mispricing of risk, and the private market will never be able to compete without taking on far too much risk.

Also, if they want to avoid walk-aways when prices depreciate, they need to mandate 20% down payments (at a minimum). This forces the borrower to take first-loss position, and will deter them from walking away.

[SD Realtor]

CAR and Arraya do nto misunderstand what I am saying. Arraya once again I agree with what you said and the with the current direction govt is heading forced debt would not surprise me in the least.

Of COURSE govt should be out of the lending business and govt insured loans are something I don’t agree with either. Honestly if the entire industry was fully privatized with no subsidy or insurance by the govt I believe we would have much lower housing prices. Once more, nobody is entitled to own a home however the govt has convinced the public otherwise. Again, ponzi scheme…

As we have all seen, backstopping any industry causes severe distortions. CAR of course your proposal of 20% (in my opinion maybe even 30% or more is a very good solution) however can you imagine the outcry? Is it the best solution yes? Is it even remotely possible no, not in my opinion.

Arraya you did not really address my point, you kind of walked around it pointing out how f’d up things are which we all know and agree with. Of course they are getting what they asked for which is massive walkaways, fraud, because it is pretty endimic for humans to behave in that manner. Once again though humans cannot be trusted to do the right thing. Nobody should buy a home if they do not have a vested interest in it. This is the point I was trying to make in a roundabout manner. There will always be appreciation and depreciation cycles so there has to be more to tether a homeowner to a home. To me that is a very healthy downpayment.

[SD Realtor]

CAR and Arraya do nto misunderstand what I am saying. Arraya once again I agree with what you said and the with the current direction govt is heading forced debt would not surprise me in the least.

Of COURSE govt should be out of the lending business and govt insured loans are something I don’t agree with either. Honestly if the entire industry was fully privatized with no subsidy or insurance by the govt I believe we would have much lower housing prices. Once more, nobody is entitled to own a home however the govt has convinced the public otherwise. Again, ponzi scheme…

As we have all seen, backstopping any industry causes severe distortions. CAR of course your proposal of 20% (in my opinion maybe even 30% or more is a very good solution) however can you imagine the outcry? Is it the best solution yes? Is it even remotely possible no, not in my opinion.

Arraya you did not really address my point, you kind of walked around it pointing out how f’d up things are which we all know and agree with. Of course they are getting what they asked for which is massive walkaways, fraud, because it is pretty endimic for humans to behave in that manner. Once again though humans cannot be trusted to do the right thing. Nobody should buy a home if they do not have a vested interest in it. This is the point I was trying to make in a roundabout manner. There will always be appreciation and depreciation cycles so there has to be more to tether a homeowner to a home. To me that is a very healthy downpayment.

[SD Realtor]

CAR and Arraya do nto misunderstand what I am saying. Arraya once again I agree with what you said and the with the current direction govt is heading forced debt would not surprise me in the least.

Of COURSE govt should be out of the lending business and govt insured loans are something I don’t agree with either. Honestly if the entire industry was fully privatized with no subsidy or insurance by the govt I believe we would have much lower housing prices. Once more, nobody is entitled to own a home however the govt has convinced the public otherwise. Again, ponzi scheme…

As we have all seen, backstopping any industry causes severe distortions. CAR of course your proposal of 20% (in my opinion maybe even 30% or more is a very good solution) however can you imagine the outcry? Is it the best solution yes? Is it even remotely possible no, not in my opinion.

Arraya you did not really address my point, you kind of walked around it pointing out how f’d up things are which we all know and agree with. Of course they are getting what they asked for which is massive walkaways, fraud, because it is pretty endimic for humans to behave in that manner. Once again though humans cannot be trusted to do the right thing. Nobody should buy a home if they do not have a vested interest in it. This is the point I was trying to make in a roundabout manner. There will always be appreciation and depreciation cycles so there has to be more to tether a homeowner to a home. To me that is a very healthy downpayment.

[SD Realtor]

CAR and Arraya do nto misunderstand what I am saying. Arraya once again I agree with what you said and the with the current direction govt is heading forced debt would not surprise me in the least.

Of COURSE govt should be out of the lending business and govt insured loans are something I don’t agree with either. Honestly if the entire industry was fully privatized with no subsidy or insurance by the govt I believe we would have much lower housing prices. Once more, nobody is entitled to own a home however the govt has convinced the public otherwise. Again, ponzi scheme…

As we have all seen, backstopping any industry causes severe distortions. CAR of course your proposal of 20% (in my opinion maybe even 30% or more is a very good solution) however can you imagine the outcry? Is it the best solution yes? Is it even remotely possible no, not in my opinion.

Arraya you did not really address my point, you kind of walked around it pointing out how f’d up things are which we all know and agree with. Of course they are getting what they asked for which is massive walkaways, fraud, because it is pretty endimic for humans to behave in that manner. Once again though humans cannot be trusted to do the right thing. Nobody should buy a home if they do not have a vested interest in it. This is the point I was trying to make in a roundabout manner. There will always be appreciation and depreciation cycles so there has to be more to tether a homeowner to a home. To me that is a very healthy downpayment.

[SD Realtor]

CAR and Arraya do nto misunderstand what I am saying. Arraya once again I agree with what you said and the with the current direction govt is heading forced debt would not surprise me in the least.

Of COURSE govt should be out of the lending business and govt insured loans are something I don’t agree with either. Honestly if the entire industry was fully privatized with no subsidy or insurance by the govt I believe we would have much lower housing prices. Once more, nobody is entitled to own a home however the govt has convinced the public otherwise. Again, ponzi scheme…

As we have all seen, backstopping any industry causes severe distortions. CAR of course your proposal of 20% (in my opinion maybe even 30% or more is a very good solution) however can you imagine the outcry? Is it the best solution yes? Is it even remotely possible no, not in my opinion.

Arraya you did not really address my point, you kind of walked around it pointing out how f’d up things are which we all know and agree with. Of course they are getting what they asked for which is massive walkaways, fraud, because it is pretty endimic for humans to behave in that manner. Once again though humans cannot be trusted to do the right thing. Nobody should buy a home if they do not have a vested interest in it. This is the point I was trying to make in a roundabout manner. There will always be appreciation and depreciation cycles so there has to be more to tether a homeowner to a home. To me that is a very healthy downpayment.

[UCGal]

After a week long vacation I came back to this monster long thread.

A couple of thoughts.
* I agree with everything CAR said. The bailouts actually hurt us, longterm. We’d have been better off without them.

* I’m troubled that someone who has no financial hardship thinks it’s morally ok to just stop paying. I, personally, couldn’t do it. I’m sure I’ll be called a ball-less bitch for admitting that I like to honor my word and contractual obligations.

* I keep thinking of the contractor I’m in litigation with. He received his NOD on his house in Oct. His NOT in Dec. He’s had 2 extensions on his trustee sale. He doesn’t qualify for HAMP because his loan’s too high. Yet he’s living rent free. I actually have a slight bit more sympathy for him since he’s faced financial hardship (contracting sucks these days)… But I still feel strongly that he shouldn’t get free rent. It bothers the crap out of me that my tax dollars are helping subsidize people who have the capacity to meet their contractual obligations but selfishly choose not to.

Bill – what you’re doing is legal. In my book, it’s not moral.

[UCGal]

After a week long vacation I came back to this monster long thread.

A couple of thoughts.
* I agree with everything CAR said. The bailouts actually hurt us, longterm. We’d have been better off without them.

* I’m troubled that someone who has no financial hardship thinks it’s morally ok to just stop paying. I, personally, couldn’t do it. I’m sure I’ll be called a ball-less bitch for admitting that I like to honor my word and contractual obligations.

* I keep thinking of the contractor I’m in litigation with. He received his NOD on his house in Oct. His NOT in Dec. He’s had 2 extensions on his trustee sale. He doesn’t qualify for HAMP because his loan’s too high. Yet he’s living rent free. I actually have a slight bit more sympathy for him since he’s faced financial hardship (contracting sucks these days)… But I still feel strongly that he shouldn’t get free rent. It bothers the crap out of me that my tax dollars are helping subsidize people who have the capacity to meet their contractual obligations but selfishly choose not to.

Bill – what you’re doing is legal. In my book, it’s not moral.

[UCGal]

After a week long vacation I came back to this monster long thread.

A couple of thoughts.
* I agree with everything CAR said. The bailouts actually hurt us, longterm. We’d have been better off without them.

* I’m troubled that someone who has no financial hardship thinks it’s morally ok to just stop paying. I, personally, couldn’t do it. I’m sure I’ll be called a ball-less bitch for admitting that I like to honor my word and contractual obligations.

* I keep thinking of the contractor I’m in litigation with. He received his NOD on his house in Oct. His NOT in Dec. He’s had 2 extensions on his trustee sale. He doesn’t qualify for HAMP because his loan’s too high. Yet he’s living rent free. I actually have a slight bit more sympathy for him since he’s faced financial hardship (contracting sucks these days)… But I still feel strongly that he shouldn’t get free rent. It bothers the crap out of me that my tax dollars are helping subsidize people who have the capacity to meet their contractual obligations but selfishly choose not to.

Bill – what you’re doing is legal. In my book, it’s not moral.

[UCGal]

After a week long vacation I came back to this monster long thread.

A couple of thoughts.
* I agree with everything CAR said. The bailouts actually hurt us, longterm. We’d have been better off without them.

* I’m troubled that someone who has no financial hardship thinks it’s morally ok to just stop paying. I, personally, couldn’t do it. I’m sure I’ll be called a ball-less bitch for admitting that I like to honor my word and contractual obligations.

* I keep thinking of the contractor I’m in litigation with. He received his NOD on his house in Oct. His NOT in Dec. He’s had 2 extensions on his trustee sale. He doesn’t qualify for HAMP because his loan’s too high. Yet he’s living rent free. I actually have a slight bit more sympathy for him since he’s faced financial hardship (contracting sucks these days)… But I still feel strongly that he shouldn’t get free rent. It bothers the crap out of me that my tax dollars are helping subsidize people who have the capacity to meet their contractual obligations but selfishly choose not to.

Bill – what you’re doing is legal. In my book, it’s not moral.

[UCGal]

After a week long vacation I came back to this monster long thread.

A couple of thoughts.
* I agree with everything CAR said. The bailouts actually hurt us, longterm. We’d have been better off without them.

* I’m troubled that someone who has no financial hardship thinks it’s morally ok to just stop paying. I, personally, couldn’t do it. I’m sure I’ll be called a ball-less bitch for admitting that I like to honor my word and contractual obligations.

* I keep thinking of the contractor I’m in litigation with. He received his NOD on his house in Oct. His NOT in Dec. He’s had 2 extensions on his trustee sale. He doesn’t qualify for HAMP because his loan’s too high. Yet he’s living rent free. I actually have a slight bit more sympathy for him since he’s faced financial hardship (contracting sucks these days)… But I still feel strongly that he shouldn’t get free rent. It bothers the crap out of me that my tax dollars are helping subsidize people who have the capacity to meet their contractual obligations but selfishly choose not to.

Bill – what you’re doing is legal. In my book, it’s not moral.

[CarlsbadMtnBiker]

I’m a Bill. 9 months mortgage/rent free. Going to ride this train as long as possible. I know of many others who stopped in the last 6 months. And also many who are about to stop paying into the Ponzi. Don’t be afraid to join us.

[CarlsbadMtnBiker]

I’m a Bill. 9 months mortgage/rent free. Going to ride this train as long as possible. I know of many others who stopped in the last 6 months. And also many who are about to stop paying into the Ponzi. Don’t be afraid to join us.

[CarlsbadMtnBiker]

I’m a Bill. 9 months mortgage/rent free. Going to ride this train as long as possible. I know of many others who stopped in the last 6 months. And also many who are about to stop paying into the Ponzi. Don’t be afraid to join us.

[CarlsbadMtnBiker]

I’m a Bill. 9 months mortgage/rent free. Going to ride this train as long as possible. I know of many others who stopped in the last 6 months. And also many who are about to stop paying into the Ponzi. Don’t be afraid to join us.

[Author]

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