Viral Nature of Walking Away

[sdrealtor]

desmond
did you ever make it to Super Rica on Milpas?

[bearishgurl]

Huckleberry, I believe it’s a conscious decision on the part of the borrower to sign up for the following loan programs:

Interest-only loan; 30 due in 5 (or 7) loan; ARM w/neg-am (and pay min [non-amortized] rate); borrow the down payment; 125 LTV; pay several pts. up front; pay voluminous garbage charges and pay HOA(s), MR, street bonds, etc.

I think homebuyers got so caught up in erroneously thinking that a particular property was going to afford them a “lifestyle” they never had that they got mesmerized in the homebuying process. Their judgment was clouded because they didn’t want to even consider properties where they could actually live comfortably.

As for repeat cash-out refinancers and those who took out 2nds, 3rds and HELOCs, my experience has been that these owners don’t give a rat’s a** how much they are being charged or what happens to them or their home, they just want CASH ASAP. They have absolutely no regard for the future payments. These are conscious decisions to expose themselves to foreclosure.

Even if there is a severe language barrier with one or all the buyers, a doc-signing notary or lending professional at closing explains everything to them, taking at least 45 minutes and answering their questions in their language.

I don’t buy into the concept that buyers (and refinancers) were “victims.”

I don’t think banks should pay foreclosure victims any money at all. Most of these “victims” have already been squatting many months before it is time to move out. They have AMPLE notice to move before the sheriff’s comes in to evict them and sit their stuff outside. The TV networks portray a “poor foreclosure victim-mentality” for human-interest purposes. Sorry, I just don’t buy it.

[bearishgurl]

Huckleberry, I believe it’s a conscious decision on the part of the borrower to sign up for the following loan programs:

Interest-only loan; 30 due in 5 (or 7) loan; ARM w/neg-am (and pay min [non-amortized] rate); borrow the down payment; 125 LTV; pay several pts. up front; pay voluminous garbage charges and pay HOA(s), MR, street bonds, etc.

I think homebuyers got so caught up in erroneously thinking that a particular property was going to afford them a “lifestyle” they never had that they got mesmerized in the homebuying process. Their judgment was clouded because they didn’t want to even consider properties where they could actually live comfortably.

As for repeat cash-out refinancers and those who took out 2nds, 3rds and HELOCs, my experience has been that these owners don’t give a rat’s a** how much they are being charged or what happens to them or their home, they just want CASH ASAP. They have absolutely no regard for the future payments. These are conscious decisions to expose themselves to foreclosure.

Even if there is a severe language barrier with one or all the buyers, a doc-signing notary or lending professional at closing explains everything to them, taking at least 45 minutes and answering their questions in their language.

I don’t buy into the concept that buyers (and refinancers) were “victims.”

I don’t think banks should pay foreclosure victims any money at all. Most of these “victims” have already been squatting many months before it is time to move out. They have AMPLE notice to move before the sheriff’s comes in to evict them and sit their stuff outside. The TV networks portray a “poor foreclosure victim-mentality” for human-interest purposes. Sorry, I just don’t buy it.

[bearishgurl]

Huckleberry, I believe it’s a conscious decision on the part of the borrower to sign up for the following loan programs:

Interest-only loan; 30 due in 5 (or 7) loan; ARM w/neg-am (and pay min [non-amortized] rate); borrow the down payment; 125 LTV; pay several pts. up front; pay voluminous garbage charges and pay HOA(s), MR, street bonds, etc.

I think homebuyers got so caught up in erroneously thinking that a particular property was going to afford them a “lifestyle” they never had that they got mesmerized in the homebuying process. Their judgment was clouded because they didn’t want to even consider properties where they could actually live comfortably.

As for repeat cash-out refinancers and those who took out 2nds, 3rds and HELOCs, my experience has been that these owners don’t give a rat’s a** how much they are being charged or what happens to them or their home, they just want CASH ASAP. They have absolutely no regard for the future payments. These are conscious decisions to expose themselves to foreclosure.

Even if there is a severe language barrier with one or all the buyers, a doc-signing notary or lending professional at closing explains everything to them, taking at least 45 minutes and answering their questions in their language.

I don’t buy into the concept that buyers (and refinancers) were “victims.”

I don’t think banks should pay foreclosure victims any money at all. Most of these “victims” have already been squatting many months before it is time to move out. They have AMPLE notice to move before the sheriff’s comes in to evict them and sit their stuff outside. The TV networks portray a “poor foreclosure victim-mentality” for human-interest purposes. Sorry, I just don’t buy it.

[bearishgurl]

Huckleberry, I believe it’s a conscious decision on the part of the borrower to sign up for the following loan programs:

Interest-only loan; 30 due in 5 (or 7) loan; ARM w/neg-am (and pay min [non-amortized] rate); borrow the down payment; 125 LTV; pay several pts. up front; pay voluminous garbage charges and pay HOA(s), MR, street bonds, etc.

I think homebuyers got so caught up in erroneously thinking that a particular property was going to afford them a “lifestyle” they never had that they got mesmerized in the homebuying process. Their judgment was clouded because they didn’t want to even consider properties where they could actually live comfortably.

As for repeat cash-out refinancers and those who took out 2nds, 3rds and HELOCs, my experience has been that these owners don’t give a rat’s a** how much they are being charged or what happens to them or their home, they just want CASH ASAP. They have absolutely no regard for the future payments. These are conscious decisions to expose themselves to foreclosure.

Even if there is a severe language barrier with one or all the buyers, a doc-signing notary or lending professional at closing explains everything to them, taking at least 45 minutes and answering their questions in their language.

I don’t buy into the concept that buyers (and refinancers) were “victims.”

I don’t think banks should pay foreclosure victims any money at all. Most of these “victims” have already been squatting many months before it is time to move out. They have AMPLE notice to move before the sheriff’s comes in to evict them and sit their stuff outside. The TV networks portray a “poor foreclosure victim-mentality” for human-interest purposes. Sorry, I just don’t buy it.

[bearishgurl]

Huckleberry, I believe it’s a conscious decision on the part of the borrower to sign up for the following loan programs:

Interest-only loan; 30 due in 5 (or 7) loan; ARM w/neg-am (and pay min [non-amortized] rate); borrow the down payment; 125 LTV; pay several pts. up front; pay voluminous garbage charges and pay HOA(s), MR, street bonds, etc.

I think homebuyers got so caught up in erroneously thinking that a particular property was going to afford them a “lifestyle” they never had that they got mesmerized in the homebuying process. Their judgment was clouded because they didn’t want to even consider properties where they could actually live comfortably.

As for repeat cash-out refinancers and those who took out 2nds, 3rds and HELOCs, my experience has been that these owners don’t give a rat’s a** how much they are being charged or what happens to them or their home, they just want CASH ASAP. They have absolutely no regard for the future payments. These are conscious decisions to expose themselves to foreclosure.

Even if there is a severe language barrier with one or all the buyers, a doc-signing notary or lending professional at closing explains everything to them, taking at least 45 minutes and answering their questions in their language.

I don’t buy into the concept that buyers (and refinancers) were “victims.”

I don’t think banks should pay foreclosure victims any money at all. Most of these “victims” have already been squatting many months before it is time to move out. They have AMPLE notice to move before the sheriff’s comes in to evict them and sit their stuff outside. The TV networks portray a “poor foreclosure victim-mentality” for human-interest purposes. Sorry, I just don’t buy it.

[PCinSD]

[quote=davelj]
The words “I, [Name], hereby promises to pay” are on every mortgage contract (I just checked mine to be sure – yup, it’s there). (A mortgage, after all is nothing more than a Promissory Note – that’s derived from “promise” – collateralized by a property. Look up “mortgage” on wikipedia.) If you believe that breaking a “promise” is breaking your “word” (as I do), then in fact you do break your word when you choose to give the property back. The difference between a “promise” and your “word” is a distinction without a difference. So, I see defaulting as “word breaking.” And for the bazillionth time, just to be clear, if you’re tapped out and you have to break your word, then so be it. This I can understand. But if you’re breaking your word merely because keeping it is inconvenient, that I cannot condone. Again, we can agree to disagree on this.[/quote]

I disagree with you, Davelj. And if all the contract said was “I promise to pay”, then I may even agree with you. But, it says much more than that. Enough, in fact, to completely protect the person who made the “promise to pay”. The banks made certain promises in that contract too. Promises that limit their remedy to recovery of the property that was the collateral. Those are the default promises that most real estate contracts contain – contracts that weren’t drafted by attorneys representing individual buyers of single family homes.

“Breaking your word” is akin to breaching a contract. Many of our laws, including contract law, have their roots in fairness and morality. Most times when one party to a contract “breaks their word”, they can be sued in court to recover damages. Not so in most real estate contracts. Because they aren’t breaking their word.

By the way, who determines when any particular person/family “is tapped out” enough to get a moral pass in your book? Is there a specific formula? If so, then you wouldn’t have a problem inserting that language into the purchase agreement of your next real estate purchase. If it’s that morally reprehensible, then the victim lender should be able to get the property and be able to sue the person who broke their word. If it’s your idea and you insist on it, I doubt the lender would object to that clause.

[PCinSD]

[quote=davelj]
The words “I, [Name], hereby promises to pay” are on every mortgage contract (I just checked mine to be sure – yup, it’s there). (A mortgage, after all is nothing more than a Promissory Note – that’s derived from “promise” – collateralized by a property. Look up “mortgage” on wikipedia.) If you believe that breaking a “promise” is breaking your “word” (as I do), then in fact you do break your word when you choose to give the property back. The difference between a “promise” and your “word” is a distinction without a difference. So, I see defaulting as “word breaking.” And for the bazillionth time, just to be clear, if you’re tapped out and you have to break your word, then so be it. This I can understand. But if you’re breaking your word merely because keeping it is inconvenient, that I cannot condone. Again, we can agree to disagree on this.[/quote]

I disagree with you, Davelj. And if all the contract said was “I promise to pay”, then I may even agree with you. But, it says much more than that. Enough, in fact, to completely protect the person who made the “promise to pay”. The banks made certain promises in that contract too. Promises that limit their remedy to recovery of the property that was the collateral. Those are the default promises that most real estate contracts contain – contracts that weren’t drafted by attorneys representing individual buyers of single family homes.

“Breaking your word” is akin to breaching a contract. Many of our laws, including contract law, have their roots in fairness and morality. Most times when one party to a contract “breaks their word”, they can be sued in court to recover damages. Not so in most real estate contracts. Because they aren’t breaking their word.

By the way, who determines when any particular person/family “is tapped out” enough to get a moral pass in your book? Is there a specific formula? If so, then you wouldn’t have a problem inserting that language into the purchase agreement of your next real estate purchase. If it’s that morally reprehensible, then the victim lender should be able to get the property and be able to sue the person who broke their word. If it’s your idea and you insist on it, I doubt the lender would object to that clause.

[PCinSD]

[quote=davelj]
The words “I, [Name], hereby promises to pay” are on every mortgage contract (I just checked mine to be sure – yup, it’s there). (A mortgage, after all is nothing more than a Promissory Note – that’s derived from “promise” – collateralized by a property. Look up “mortgage” on wikipedia.) If you believe that breaking a “promise” is breaking your “word” (as I do), then in fact you do break your word when you choose to give the property back. The difference between a “promise” and your “word” is a distinction without a difference. So, I see defaulting as “word breaking.” And for the bazillionth time, just to be clear, if you’re tapped out and you have to break your word, then so be it. This I can understand. But if you’re breaking your word merely because keeping it is inconvenient, that I cannot condone. Again, we can agree to disagree on this.[/quote]

I disagree with you, Davelj. And if all the contract said was “I promise to pay”, then I may even agree with you. But, it says much more than that. Enough, in fact, to completely protect the person who made the “promise to pay”. The banks made certain promises in that contract too. Promises that limit their remedy to recovery of the property that was the collateral. Those are the default promises that most real estate contracts contain – contracts that weren’t drafted by attorneys representing individual buyers of single family homes.

“Breaking your word” is akin to breaching a contract. Many of our laws, including contract law, have their roots in fairness and morality. Most times when one party to a contract “breaks their word”, they can be sued in court to recover damages. Not so in most real estate contracts. Because they aren’t breaking their word.

By the way, who determines when any particular person/family “is tapped out” enough to get a moral pass in your book? Is there a specific formula? If so, then you wouldn’t have a problem inserting that language into the purchase agreement of your next real estate purchase. If it’s that morally reprehensible, then the victim lender should be able to get the property and be able to sue the person who broke their word. If it’s your idea and you insist on it, I doubt the lender would object to that clause.

[PCinSD]

[quote=davelj]
The words “I, [Name], hereby promises to pay” are on every mortgage contract (I just checked mine to be sure – yup, it’s there). (A mortgage, after all is nothing more than a Promissory Note – that’s derived from “promise” – collateralized by a property. Look up “mortgage” on wikipedia.) If you believe that breaking a “promise” is breaking your “word” (as I do), then in fact you do break your word when you choose to give the property back. The difference between a “promise” and your “word” is a distinction without a difference. So, I see defaulting as “word breaking.” And for the bazillionth time, just to be clear, if you’re tapped out and you have to break your word, then so be it. This I can understand. But if you’re breaking your word merely because keeping it is inconvenient, that I cannot condone. Again, we can agree to disagree on this.[/quote]

I disagree with you, Davelj. And if all the contract said was “I promise to pay”, then I may even agree with you. But, it says much more than that. Enough, in fact, to completely protect the person who made the “promise to pay”. The banks made certain promises in that contract too. Promises that limit their remedy to recovery of the property that was the collateral. Those are the default promises that most real estate contracts contain – contracts that weren’t drafted by attorneys representing individual buyers of single family homes.

“Breaking your word” is akin to breaching a contract. Many of our laws, including contract law, have their roots in fairness and morality. Most times when one party to a contract “breaks their word”, they can be sued in court to recover damages. Not so in most real estate contracts. Because they aren’t breaking their word.

By the way, who determines when any particular person/family “is tapped out” enough to get a moral pass in your book? Is there a specific formula? If so, then you wouldn’t have a problem inserting that language into the purchase agreement of your next real estate purchase. If it’s that morally reprehensible, then the victim lender should be able to get the property and be able to sue the person who broke their word. If it’s your idea and you insist on it, I doubt the lender would object to that clause.

[PCinSD]

[quote=davelj]
The words “I, [Name], hereby promises to pay” are on every mortgage contract (I just checked mine to be sure – yup, it’s there). (A mortgage, after all is nothing more than a Promissory Note – that’s derived from “promise” – collateralized by a property. Look up “mortgage” on wikipedia.) If you believe that breaking a “promise” is breaking your “word” (as I do), then in fact you do break your word when you choose to give the property back. The difference between a “promise” and your “word” is a distinction without a difference. So, I see defaulting as “word breaking.” And for the bazillionth time, just to be clear, if you’re tapped out and you have to break your word, then so be it. This I can understand. But if you’re breaking your word merely because keeping it is inconvenient, that I cannot condone. Again, we can agree to disagree on this.[/quote]

I disagree with you, Davelj. And if all the contract said was “I promise to pay”, then I may even agree with you. But, it says much more than that. Enough, in fact, to completely protect the person who made the “promise to pay”. The banks made certain promises in that contract too. Promises that limit their remedy to recovery of the property that was the collateral. Those are the default promises that most real estate contracts contain – contracts that weren’t drafted by attorneys representing individual buyers of single family homes.

“Breaking your word” is akin to breaching a contract. Many of our laws, including contract law, have their roots in fairness and morality. Most times when one party to a contract “breaks their word”, they can be sued in court to recover damages. Not so in most real estate contracts. Because they aren’t breaking their word.

By the way, who determines when any particular person/family “is tapped out” enough to get a moral pass in your book? Is there a specific formula? If so, then you wouldn’t have a problem inserting that language into the purchase agreement of your next real estate purchase. If it’s that morally reprehensible, then the victim lender should be able to get the property and be able to sue the person who broke their word. If it’s your idea and you insist on it, I doubt the lender would object to that clause.

[davelj]

[quote=pabloesqobar]
I disagree with you, Davelj. And if all the contract said was “I promise to pay”, then I may even agree with you. But, it says much more than that. Enough, in fact, to completely protect the person who made the “promise to pay”. The banks made certain promises in that contract too. Promises that limit their remedy to recovery of the property that was the collateral. Those are the default promises that most real estate contracts contain – contracts that weren’t drafted by attorneys representing individual buyers of single family homes.

“Breaking your word” is akin to breaching a contract. Many of our laws, including contract law, have their roots in fairness and morality. Most times when one party to a contract “breaks their word”, they can be sued in court to recover damages. Not so in most real estate contracts. Because they aren’t breaking their word.[/quote]

Let me summarize your argument here: What’s legal is moral. (If the contract allows for it, then it is legal and therefore also moral.) And I disagree with this position. Call me crazy, but I think legality and morality are two different issues.

I think we’ll find that most of what Goldman did during the crisis was legal. Do you think we’ll also find that it was moral? Do you distinguish between the two?

[quote=pabloesqobar]
By the way, who determines when any particular person/family “is tapped out” enough to get a moral pass in your book? Is there a specific formula? [/quote]

Sure. When their current income can’t support the payments and they’re down to their last $5K. That’s just off the top of my head.

[davelj]

[quote=pabloesqobar]
I disagree with you, Davelj. And if all the contract said was “I promise to pay”, then I may even agree with you. But, it says much more than that. Enough, in fact, to completely protect the person who made the “promise to pay”. The banks made certain promises in that contract too. Promises that limit their remedy to recovery of the property that was the collateral. Those are the default promises that most real estate contracts contain – contracts that weren’t drafted by attorneys representing individual buyers of single family homes.

“Breaking your word” is akin to breaching a contract. Many of our laws, including contract law, have their roots in fairness and morality. Most times when one party to a contract “breaks their word”, they can be sued in court to recover damages. Not so in most real estate contracts. Because they aren’t breaking their word.[/quote]

Let me summarize your argument here: What’s legal is moral. (If the contract allows for it, then it is legal and therefore also moral.) And I disagree with this position. Call me crazy, but I think legality and morality are two different issues.

I think we’ll find that most of what Goldman did during the crisis was legal. Do you think we’ll also find that it was moral? Do you distinguish between the two?

[quote=pabloesqobar]
By the way, who determines when any particular person/family “is tapped out” enough to get a moral pass in your book? Is there a specific formula? [/quote]

Sure. When their current income can’t support the payments and they’re down to their last $5K. That’s just off the top of my head.

[davelj]

[quote=pabloesqobar]
I disagree with you, Davelj. And if all the contract said was “I promise to pay”, then I may even agree with you. But, it says much more than that. Enough, in fact, to completely protect the person who made the “promise to pay”. The banks made certain promises in that contract too. Promises that limit their remedy to recovery of the property that was the collateral. Those are the default promises that most real estate contracts contain – contracts that weren’t drafted by attorneys representing individual buyers of single family homes.

“Breaking your word” is akin to breaching a contract. Many of our laws, including contract law, have their roots in fairness and morality. Most times when one party to a contract “breaks their word”, they can be sued in court to recover damages. Not so in most real estate contracts. Because they aren’t breaking their word.[/quote]

Let me summarize your argument here: What’s legal is moral. (If the contract allows for it, then it is legal and therefore also moral.) And I disagree with this position. Call me crazy, but I think legality and morality are two different issues.

I think we’ll find that most of what Goldman did during the crisis was legal. Do you think we’ll also find that it was moral? Do you distinguish between the two?

[quote=pabloesqobar]
By the way, who determines when any particular person/family “is tapped out” enough to get a moral pass in your book? Is there a specific formula? [/quote]

Sure. When their current income can’t support the payments and they’re down to their last $5K. That’s just off the top of my head.

[davelj]

[quote=pabloesqobar]
I disagree with you, Davelj. And if all the contract said was “I promise to pay”, then I may even agree with you. But, it says much more than that. Enough, in fact, to completely protect the person who made the “promise to pay”. The banks made certain promises in that contract too. Promises that limit their remedy to recovery of the property that was the collateral. Those are the default promises that most real estate contracts contain – contracts that weren’t drafted by attorneys representing individual buyers of single family homes.

“Breaking your word” is akin to breaching a contract. Many of our laws, including contract law, have their roots in fairness and morality. Most times when one party to a contract “breaks their word”, they can be sued in court to recover damages. Not so in most real estate contracts. Because they aren’t breaking their word.[/quote]

Let me summarize your argument here: What’s legal is moral. (If the contract allows for it, then it is legal and therefore also moral.) And I disagree with this position. Call me crazy, but I think legality and morality are two different issues.

I think we’ll find that most of what Goldman did during the crisis was legal. Do you think we’ll also find that it was moral? Do you distinguish between the two?

[quote=pabloesqobar]
By the way, who determines when any particular person/family “is tapped out” enough to get a moral pass in your book? Is there a specific formula? [/quote]

Sure. When their current income can’t support the payments and they’re down to their last $5K. That’s just off the top of my head.

[Author]

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