[ucodegen]

[quote patb]
In a decent society, a bankruptcy judge would write the note down to the new value of 200K.
[/quote]
Why? It is a secured note. Someone fronted the 400K. If you want mortgage rates to go sky high, go ahead and do this. The people lending money will start demanding a higher interest rate to offset the risk of loss of capital. They will refuse to lend until they get this. Remember that the lenders only make about 72% over the life of the loan (not adjusting for inflation and assuming that they are the primary source of capital). If you are going to demand a 50% haircut from the lenders with the possibility of then getting 36% back for a total return of -14% over a 30 year period(about -0.5%/yr) vs their 72% for a 30 year (about 4%/yr). The result will be mortgage interest rates close to 8 or 9% because you are effectively taking a secured loan and making it unsecured… just like credit cards – whose balances can be written down.

I would LOVE to have all my ‘costs’ readjusted if the real price changes. Imagine that if a stock price goes down, I get some of my cash back because its real value is less!! NICE!!!

[quote patb]
yes it may not appeal to people but the
cramdown is the best outcome.
[/quote]
And what of moral hazard?

[ucodegen]

[quote patb]
In a decent society, a bankruptcy judge would write the note down to the new value of 200K.
[/quote]
Why? It is a secured note. Someone fronted the 400K. If you want mortgage rates to go sky high, go ahead and do this. The people lending money will start demanding a higher interest rate to offset the risk of loss of capital. They will refuse to lend until they get this. Remember that the lenders only make about 72% over the life of the loan (not adjusting for inflation and assuming that they are the primary source of capital). If you are going to demand a 50% haircut from the lenders with the possibility of then getting 36% back for a total return of -14% over a 30 year period(about -0.5%/yr) vs their 72% for a 30 year (about 4%/yr). The result will be mortgage interest rates close to 8 or 9% because you are effectively taking a secured loan and making it unsecured… just like credit cards – whose balances can be written down.

I would LOVE to have all my ‘costs’ readjusted if the real price changes. Imagine that if a stock price goes down, I get some of my cash back because its real value is less!! NICE!!!

[quote patb]
yes it may not appeal to people but the
cramdown is the best outcome.
[/quote]
And what of moral hazard?

[ucodegen]

[quote patb]
In a decent society, a bankruptcy judge would write the note down to the new value of 200K.
[/quote]
Why? It is a secured note. Someone fronted the 400K. If you want mortgage rates to go sky high, go ahead and do this. The people lending money will start demanding a higher interest rate to offset the risk of loss of capital. They will refuse to lend until they get this. Remember that the lenders only make about 72% over the life of the loan (not adjusting for inflation and assuming that they are the primary source of capital). If you are going to demand a 50% haircut from the lenders with the possibility of then getting 36% back for a total return of -14% over a 30 year period(about -0.5%/yr) vs their 72% for a 30 year (about 4%/yr). The result will be mortgage interest rates close to 8 or 9% because you are effectively taking a secured loan and making it unsecured… just like credit cards – whose balances can be written down.

I would LOVE to have all my ‘costs’ readjusted if the real price changes. Imagine that if a stock price goes down, I get some of my cash back because its real value is less!! NICE!!!

[quote patb]
yes it may not appeal to people but the
cramdown is the best outcome.
[/quote]
And what of moral hazard?

[ucodegen]

[quote paramount]
Not even close, and no it was not personal. True I strongly suspect, but not personal…This is a public forum using aliases, how personal could it get? Get a clue.
[/quote]
People respond in a more ‘personal’ attack manner than usual when comments do strike close to home, even when they are hiding behind aliases… the previous ‘political’ bends/twists on some earlier postings (before poli-derailing was banned) can be taken as evidence on that.

[ucodegen]

[quote paramount]
Not even close, and no it was not personal. True I strongly suspect, but not personal…This is a public forum using aliases, how personal could it get? Get a clue.
[/quote]
People respond in a more ‘personal’ attack manner than usual when comments do strike close to home, even when they are hiding behind aliases… the previous ‘political’ bends/twists on some earlier postings (before poli-derailing was banned) can be taken as evidence on that.

[ucodegen]

[quote paramount]
Not even close, and no it was not personal. True I strongly suspect, but not personal…This is a public forum using aliases, how personal could it get? Get a clue.
[/quote]
People respond in a more ‘personal’ attack manner than usual when comments do strike close to home, even when they are hiding behind aliases… the previous ‘political’ bends/twists on some earlier postings (before poli-derailing was banned) can be taken as evidence on that.

[ucodegen]

[quote paramount]
Not even close, and no it was not personal. True I strongly suspect, but not personal…This is a public forum using aliases, how personal could it get? Get a clue.
[/quote]
People respond in a more ‘personal’ attack manner than usual when comments do strike close to home, even when they are hiding behind aliases… the previous ‘political’ bends/twists on some earlier postings (before poli-derailing was banned) can be taken as evidence on that.

[ucodegen]

[quote paramount]
Not even close, and no it was not personal. True I strongly suspect, but not personal…This is a public forum using aliases, how personal could it get? Get a clue.
[/quote]
People respond in a more ‘personal’ attack manner than usual when comments do strike close to home, even when they are hiding behind aliases… the previous ‘political’ bends/twists on some earlier postings (before poli-derailing was banned) can be taken as evidence on that.

[ucodegen]

[quote walterwhite]
a person who eschews debt is odd and maybe the businesses are just trying to weed out anyone odd.
[/quote]
<tinfoilhat>Or anyone that they can’t profit from….
The idea is to keep you tied to debt, continually paying the banks for the use of money and with no escape from this. If you don’t play this game, they discriminate against you through the credit rating system.</tinfoilhat>

[ucodegen]

[quote walterwhite]
a person who eschews debt is odd and maybe the businesses are just trying to weed out anyone odd.
[/quote]
<tinfoilhat>Or anyone that they can’t profit from….
The idea is to keep you tied to debt, continually paying the banks for the use of money and with no escape from this. If you don’t play this game, they discriminate against you through the credit rating system.</tinfoilhat>

[ucodegen]

[quote walterwhite]
a person who eschews debt is odd and maybe the businesses are just trying to weed out anyone odd.
[/quote]
<tinfoilhat>Or anyone that they can’t profit from….
The idea is to keep you tied to debt, continually paying the banks for the use of money and with no escape from this. If you don’t play this game, they discriminate against you through the credit rating system.</tinfoilhat>

[ucodegen]

[quote walterwhite]
a person who eschews debt is odd and maybe the businesses are just trying to weed out anyone odd.
[/quote]
<tinfoilhat>Or anyone that they can’t profit from….
The idea is to keep you tied to debt, continually paying the banks for the use of money and with no escape from this. If you don’t play this game, they discriminate against you through the credit rating system.</tinfoilhat>

[ucodegen]

[quote walterwhite]
a person who eschews debt is odd and maybe the businesses are just trying to weed out anyone odd.
[/quote]
<tinfoilhat>Or anyone that they can’t profit from….
The idea is to keep you tied to debt, continually paying the banks for the use of money and with no escape from this. If you don’t play this game, they discriminate against you through the credit rating system.</tinfoilhat>

[ucodegen]

[quote meadandale]
Yes, there will be the oddballs who pay cash and don’t use credit and thus have a low credit score that doesn’t reflect their financial acumen but seriously, what percentage of people fall into that category? I’d estimate well under 1%.
[/quote]
More people than you think. I have a non-existent credit score.. someone I know has a very good credit score, but is living paycheck to paycheck. I have way more than 1 years worth of salary saved up. This person, of course, doesn’t.
[quote UCGal]
paramount – not sure what I did to piss you off.
Does it really bother you that I spend less than I earn? Wow.
[/quote]
I think you hit too close to home.. because the response got ‘personal’..
[quote GH]
If an employee has a history of theft, that kind of information WOULD be valuable to a potential employer.
[/quote]
Criminal record.. often asked about on employment applications.

[ucodegen]

[quote meadandale]
Yes, there will be the oddballs who pay cash and don’t use credit and thus have a low credit score that doesn’t reflect their financial acumen but seriously, what percentage of people fall into that category? I’d estimate well under 1%.
[/quote]
More people than you think. I have a non-existent credit score.. someone I know has a very good credit score, but is living paycheck to paycheck. I have way more than 1 years worth of salary saved up. This person, of course, doesn’t.
[quote UCGal]
paramount – not sure what I did to piss you off.
Does it really bother you that I spend less than I earn? Wow.
[/quote]
I think you hit too close to home.. because the response got ‘personal’..
[quote GH]
If an employee has a history of theft, that kind of information WOULD be valuable to a potential employer.
[/quote]
Criminal record.. often asked about on employment applications.

[Author]

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