You cannot have it both ways

[Ash Housewares]

SD it would be interesting to put your solution to the test and look at other countries where mortgage debt is recourse. Does anyone know of examples? I know New Zealand has a nice bubble going, and mortgages there are recourse.

[NotCranky]

“What has to change? Well I believe there should be no more distinction between recourse and non recourse money. If people are simply not going to comprehend that home ownership is a different vehicle then an investment then ultimate responsibility must be incurred in a default unless it can be a well proven hardship.”

I agree with you completely Adam.

My wife and I were just discussing this topic as a result of the other thread. We think it is likely to change. She thought it should be part or loan modification. I thought it would be unfair, as those consumers are somewhat under duress.

Patientlywaiting, thanks for reminding me that it is there to protect the lender as well.

[NotCranky]

“What has to change? Well I believe there should be no more distinction between recourse and non recourse money. If people are simply not going to comprehend that home ownership is a different vehicle then an investment then ultimate responsibility must be incurred in a default unless it can be a well proven hardship.”

I agree with you completely Adam.

My wife and I were just discussing this topic as a result of the other thread. We think it is likely to change. She thought it should be part or loan modification. I thought it would be unfair, as those consumers are somewhat under duress.

Patientlywaiting, thanks for reminding me that it is there to protect the lender as well.

[NotCranky]

“What has to change? Well I believe there should be no more distinction between recourse and non recourse money. If people are simply not going to comprehend that home ownership is a different vehicle then an investment then ultimate responsibility must be incurred in a default unless it can be a well proven hardship.”

I agree with you completely Adam.

My wife and I were just discussing this topic as a result of the other thread. We think it is likely to change. She thought it should be part or loan modification. I thought it would be unfair, as those consumers are somewhat under duress.

Patientlywaiting, thanks for reminding me that it is there to protect the lender as well.

[NotCranky]

“What has to change? Well I believe there should be no more distinction between recourse and non recourse money. If people are simply not going to comprehend that home ownership is a different vehicle then an investment then ultimate responsibility must be incurred in a default unless it can be a well proven hardship.”

I agree with you completely Adam.

My wife and I were just discussing this topic as a result of the other thread. We think it is likely to change. She thought it should be part or loan modification. I thought it would be unfair, as those consumers are somewhat under duress.

Patientlywaiting, thanks for reminding me that it is there to protect the lender as well.

[NotCranky]

“What has to change? Well I believe there should be no more distinction between recourse and non recourse money. If people are simply not going to comprehend that home ownership is a different vehicle then an investment then ultimate responsibility must be incurred in a default unless it can be a well proven hardship.”

I agree with you completely Adam.

My wife and I were just discussing this topic as a result of the other thread. We think it is likely to change. She thought it should be part or loan modification. I thought it would be unfair, as those consumers are somewhat under duress.

Patientlywaiting, thanks for reminding me that it is there to protect the lender as well.

[bobby]

the bank understands perfectly what they’re getting themselves into – they WROTE the contract. If the contract includes the “walk” clause, then why shouldn’t the borrower use it?
the bank has no problem charging 15% interest b/c they’re looking out for #1. the consumer should adopt the same mindset.

[bobby]

the bank understands perfectly what they’re getting themselves into – they WROTE the contract. If the contract includes the “walk” clause, then why shouldn’t the borrower use it?
the bank has no problem charging 15% interest b/c they’re looking out for #1. the consumer should adopt the same mindset.

[bobby]

the bank understands perfectly what they’re getting themselves into – they WROTE the contract. If the contract includes the “walk” clause, then why shouldn’t the borrower use it?
the bank has no problem charging 15% interest b/c they’re looking out for #1. the consumer should adopt the same mindset.

[bobby]

the bank understands perfectly what they’re getting themselves into – they WROTE the contract. If the contract includes the “walk” clause, then why shouldn’t the borrower use it?
the bank has no problem charging 15% interest b/c they’re looking out for #1. the consumer should adopt the same mindset.

[bobby]

the bank understands perfectly what they’re getting themselves into – they WROTE the contract. If the contract includes the “walk” clause, then why shouldn’t the borrower use it?
the bank has no problem charging 15% interest b/c they’re looking out for #1. the consumer should adopt the same mindset.

[savedbypigs]

I agree with Bobby and Patiently, and disagree that the “intent” of a nonrecourse loan is to provide the buyer an out only in the event of hardship or catastrophic event. Legally, a nonrecourse loan provides the debtor the choice of either paying off the debt or forfeiting the property. Thus, at all times, a nonrecourse transaction provides the obligor the option to return the property to the creditor in total satisfaction of the obligation. This is not an amorphous concept that applies only in certain circumstances, nor is it any secret in the banking/mortgage industry.

Thus, in a nonrecourse situation, it is entirely incumbent upon the creditor to ensure that the collateral protecting the obligation is sufficient. While it certainly may be foolhardy to purchase property beyond one’s means, from a legal perspective the sole responsibility for loss falls upon the party loaning money without adequate security. The person walking away from a nonrecourse loan that has gone upside down is merely exercising his/her legal rights under the contract.

[savedbypigs]

I agree with Bobby and Patiently, and disagree that the “intent” of a nonrecourse loan is to provide the buyer an out only in the event of hardship or catastrophic event. Legally, a nonrecourse loan provides the debtor the choice of either paying off the debt or forfeiting the property. Thus, at all times, a nonrecourse transaction provides the obligor the option to return the property to the creditor in total satisfaction of the obligation. This is not an amorphous concept that applies only in certain circumstances, nor is it any secret in the banking/mortgage industry.

Thus, in a nonrecourse situation, it is entirely incumbent upon the creditor to ensure that the collateral protecting the obligation is sufficient. While it certainly may be foolhardy to purchase property beyond one’s means, from a legal perspective the sole responsibility for loss falls upon the party loaning money without adequate security. The person walking away from a nonrecourse loan that has gone upside down is merely exercising his/her legal rights under the contract.

[savedbypigs]

I agree with Bobby and Patiently, and disagree that the “intent” of a nonrecourse loan is to provide the buyer an out only in the event of hardship or catastrophic event. Legally, a nonrecourse loan provides the debtor the choice of either paying off the debt or forfeiting the property. Thus, at all times, a nonrecourse transaction provides the obligor the option to return the property to the creditor in total satisfaction of the obligation. This is not an amorphous concept that applies only in certain circumstances, nor is it any secret in the banking/mortgage industry.

Thus, in a nonrecourse situation, it is entirely incumbent upon the creditor to ensure that the collateral protecting the obligation is sufficient. While it certainly may be foolhardy to purchase property beyond one’s means, from a legal perspective the sole responsibility for loss falls upon the party loaning money without adequate security. The person walking away from a nonrecourse loan that has gone upside down is merely exercising his/her legal rights under the contract.

[savedbypigs]

I agree with Bobby and Patiently, and disagree that the “intent” of a nonrecourse loan is to provide the buyer an out only in the event of hardship or catastrophic event. Legally, a nonrecourse loan provides the debtor the choice of either paying off the debt or forfeiting the property. Thus, at all times, a nonrecourse transaction provides the obligor the option to return the property to the creditor in total satisfaction of the obligation. This is not an amorphous concept that applies only in certain circumstances, nor is it any secret in the banking/mortgage industry.

Thus, in a nonrecourse situation, it is entirely incumbent upon the creditor to ensure that the collateral protecting the obligation is sufficient. While it certainly may be foolhardy to purchase property beyond one’s means, from a legal perspective the sole responsibility for loss falls upon the party loaning money without adequate security. The person walking away from a nonrecourse loan that has gone upside down is merely exercising his/her legal rights under the contract.

[Author]

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