Report shows strategic defaults increasing

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Submitted by Arraya on March 27, 2010 - 5:04pm

http://blogs.reuters.com/rolfe-winkler/2...

How widespread are strategic defaults? Laurie Goodman and her team at Amherst Mortgage Insight yesterday released a report that shows they are indeed on the rise and for reasons we might suspect: negative equity and a more borrower-friendly environment.

The second reason should be kept in mind as we consider President Obama’s soon-to-be-announced plan to encourage principal reduction. If the plan is structured so that it gives incentives to default in order to secure principal forgiveness, well, expect defaults to spike.

Strategic default isn’t necessarily synonymous with mailing your keys to the bank and walking away. It may simply mean a borrower choosing to stop payments to the bank when economic incentives would have him do so. Amherst has come up with a novel metric to measure strategic default — the “default transition rate.” DTR looks at the percentage of borrowers who’ve never been more than one payment behind on their mortgage suddenly missing two payments in a row.

Lo and behold, negative equity leads more folks to strategically default, regardless of their credit score and whether they took out a liar loan:

Submitted by NotCranky on April 24, 2010 - 11:10pm.

scaredycat wrote:
having a purpose and a couple of bucks in the bank are not mutually exclusive.

and the measuring sticks don't ahve to be cash or stuff.

if you're an academic, it's publciations.

if you're a law or med student, it's grades.

if you're a triathlete, it's times.

wherever you're going there's something to measure oyurself against, and it's probably not escapable, however much you try to pretend you live apart.

MLK's message was to measure people by their character...certainly not their perfomance in a specialized area(wether or not if I share an interest in that specialization). I find that most people,including those I might judge myself against, in any circumstance, are approximately equal to me and often less by this measure . Hat's off to those who go way above the rest of us... There are not very many.Comparision to the point of depressing onself, is a vexatious habit that is optional.It is the result of conditioning. The right kind of pride wrecks your theory.

Submitted by scaredyclassic on April 24, 2010 - 11:16pm.

MLK? you mean martin luther king? the guy who plagiarized his dissertation? might it have had something to dow ith wanting to keep up with his class?

im not saying it's good to compare yourself to others, or that it wouldnt be desireable to stop. just that it's so natural i question anyone who says they're above it.

I even think there are zen cautionary tales about monks competing to be msot deprived and enlightened. It doesn't matter what the context is, we live by judgments and it's hat tendency that makes us miserable.

Submitted by NotCranky on April 25, 2010 - 12:02am.

Whether or not he plagiarized his dissertation doesn't affect the argument.

I don't deny the tendency to observe/compare,as you seem to imply. I say that it is not an automatic controlling factor in one's self perception and happiness unless one is addicted to doing it.Why would one be addicted to doing it?Exceptional insecurity? Neurosis? The activity in itself, when compulsively overdone, is vexatious, counter productive, and creates unhappiness. It's the person not the environment.

Originally when you introduced the topic you said that to be happy you had to be doing better than 2/3 of the people around you and you framed it in a residential real estate, money making and material possession sense. You have taken it into the medical profession and swim/bike/run events, but it still doesn't work separate from some unfortunate psychological conditioning. Maybe there is an epidemic of that conditioning, but the responses you claim are by no means innate to humans.

Submitted by Arraya on April 25, 2010 - 12:37am.

cultural social pathologies

Submitted by BillS78 on April 25, 2010 - 2:56am.

jpinpb wrote:
BillS78 wrote:

Sorry you are upset, but you flat out don't know what you are talking about. I was not bailed out. I lost over $100K easy in profits on my July-Sept. 2008 oil shorts because of the bank bailouts and that money funneled back into the commodity futures market.

Let me see if I understand. Besides investing in a house during the bubble, you made another investment in shorts and b/c that decision didn't make you money then living for free is not considered a bailout. And I'm irrational.

Yes you are irrational, because you want to cherry pick my gains from the bank bailout and ignore the profits that were stolen from me because of the bank bailout. If you want to accurately evaluate any economic outcome you need to factor in the gains and losses. You don't want to have an honest discussion, you want to bitch and moan and blame who ever you can for your perceived loss.

Oh and by the way I did make a lot of money on the shorts, but I missed out on even more because the government decided to change the rules of the game and cheat the shorts out of their profits to bailout your 401K.

jpinpb wrote:
BillS78 wrote:

Bullshit. I lost more than you did on investments(unless you were heavily shorting) because of the bank bailouts and I bet that I also pay more federal income tax than you.

Again, just b/c you chose to invest in shorting doesn't ever guarantee you are entitled to a return on your investment. In the interim, you are still nevertheless living for free.

My profits were guaranteed as long as the government didn't cheat the system with the bank bailouts. You see if you understood finance you would realize that investors only participate in the market because it is understood that the government isn't going to completely change the rules overnight and rob us of our profits to save the banks and your 401K. The government broke the system so anything legal is fair game now so quit your bitching and get in the game.

The government stole at least $100k from me to bailout your 401K. Jpinpb I want my money back you deadbeat.

Keep up your irrational jealousy, it's entertaining.

Submitted by jpinpb on April 25, 2010 - 8:07am.

BillS78 wrote:

Yes you are irrational, because you want to cherry pick my gains from the bank bailout and ignore the profits that were stolen from me because of the bank bailout.

What's really entertaining is the sense of entitlement that you continue to have. You made bad decisions in life, including investing buying a house during a real estate bubble. You are now living for free. Then you made another bad decision by shorting banks. Now you are complaining about that.

BillS78 wrote:

Oh and by the way I did make a lot of money on the shorts, but I missed out on even more

I'm sorry that you just keep missing out on making even more money.

BillS78 wrote:

My profits were guaranteed as long as the government didn't cheat the system with the bank bailouts.

Very few things are guaranteed in life. The mere fact that you expect your investments to continue to increase is a perfect example of your sense of entitlement.

And again, I assure you, I am not jealous. I own property free and clear. I've already explained the issue I have and that is supporting other people's bad mistakes. There is a difference between jealousy and resentment.

Submitted by flu on April 25, 2010 - 8:26am.

jpinpb wrote:
BillS78 wrote:

Yes you are irrational, because you want to cherry pick my gains from the bank bailout and ignore the profits that were stolen from me because of the bank bailout.

What's really entertaining is the sense of entitlement that you continue to have. You made bad decisions in life, including investing buying a house during a real estate bubble. You are now living for free. Then you made another bad decision by shorting banks. Now you are complaining about that.

BillS78 wrote:

Oh and by the way I did make a lot of money on the shorts, but I missed out on even more

I'm sorry that you just keep missing out on making even more money.

BillS78 wrote:

My profits were guaranteed as long as the government didn't cheat the system with the bank bailouts.

Very few things are guaranteed in life. The mere fact that you expect your investments to continue to increase is a perfect example of your sense of entitlement.

And again, I assure you, I am not jealous. I own property free and clear. I've already explained the issue I have and that is supporting other people's bad mistakes. There is a difference between jealousy and resentment.

Why even bother debating? Clearly, someone how has no financial accountability.

Submitted by mercedes7 on April 25, 2010 - 8:45am.

jpinpb wrote:
BillS78 wrote:

Yes you are irrational, because you want to cherry pick my gains from the bank bailout and ignore the profits that were stolen from me because of the bank bailout.

What's really entertaining is the sense of entitlement that you continue to have. You made bad decisions in life, including investing buying a house during a real estate bubble. You are now living for free. Then you made another bad decision by shorting banks. Now you are complaining about that.

BillS78 wrote:

Oh and by the way I did make a lot of money on the shorts, but I missed out on even more

I'm sorry that you just keep missing out on making even more money.

BillS78 wrote:

My profits were guaranteed as long as the government didn't cheat the system with the bank bailouts.

Very few things are guaranteed in life. The mere fact that you expect your investments to continue to increase is a perfect example of your sense of entitlement.

And again, I assure you, I am not jealous. I own property free and clear. I've already explained the issue I have and that is supporting other people's bad mistakes. There is a difference between jealousy and resentment.

amen JP

Submitted by NotCranky on April 25, 2010 - 8:47am.

Arraya wrote:
cultural social pathologies

Yes.

Submitted by scaredyclassic on April 25, 2010 - 12:21pm.

cultural social pathology, maybe. maybe not. it's difficult to imagine an early pack of humans not being concerned with how they rank one to the other.

i don't think that would be pathological. that would be survival. you'd want the best looking mate, the best tools, the best deal, the best cave, whatever. because you'd want to reproduce best and strongest.

we'd only know what our odds are versus how everyone else is doing locally.

if I had a cave-babe with better hips than my cohorts, i'd be feeling pretty damn good about how things are going. It wouldn't matter if she were a crappy specimen compared to what's going on in asia or the aleuts. All that matters is my immediate point of reference. i'm talking how we were wired when we began as hairy packs of proto-humans...

I truly believe the way we were wired when we first started out has effects today.

Clearly in terms of obesity, in my opinion, it's because we are wired to pig out when we see piles of food. in olden times, food was scarce and when you killed a mammoth you had to eat like crazy, because it might be awhile till the next feeding. now that food is everywhere, our basic wiring is not suited for the environment.

Ignore your deep wiring at your own peril.

pretend you are enlightened if you want, that you are above the fray.

i don't believe you.

if you were enlightened in sucha manner, YOU WOULDN"T BE ON A CHAT BOARD DISCUSSING THESE TOPICS!!! me either...

see ya at the next kill...i get the liver....

btw, i am no saying it is desireable to be this way...just that we are that way and that it may be inextricable from our nature. awareness can help to some degree, but it may be as deep and strong as your sex drive and your requirement for oxygen...

Submitted by NotCranky on April 25, 2010 - 1:00pm.

To tell you the truth scaredy cat, I can not win this argument because you are dead set on avoiding the self-fulfilling prophecy of being depressed all day if you admit you lose ;).

The things you say seem to apply to people who are easily impressed, maybe vain. Individuals have the ability to analyze and calculate and ration both reactions to this comparision syndrome and things like piles of food, to the right degree...If you can't I call that a personal problem, perhaps a mistake, it has nothing to do with me "pretending". There may be an apparent hierarchy to you, but "happiness" doesn't align with it in any consistent manner. It aligns with attitude.

To me there is no absolute hierarchy with winners and losers...just people in different situations.

Submitted by scaredyclassic on April 25, 2010 - 1:32pm.

Ok you win. I cede dominance to you. I'll just slink away from the pack and die now

Submitted by NotCranky on April 25, 2010 - 2:25pm.

scaredycat wrote:
Ok you win. I cede dominance to you. I'll just slink away from the pack and die now

LOL, I wonder what everyone will think of the new feather in my cap?

Submitted by sdrealtor on April 25, 2010 - 2:28pm.

I'm jealous that I didnt get one......Siiiighhhh....I thought I was better than you;)

Submitted by NotCranky on April 25, 2010 - 2:34pm.

Check out this stuff scaredy.
http://news.yahoo.com/s/ap/20100425/ap_o...

Submitted by CA renter on April 25, 2010 - 2:43pm.

mercedes7 wrote:
jpinpb wrote:

And again, I assure you, I am not jealous. I own property free and clear. I've already explained the issue I have and that is supporting other people's bad mistakes. There is a difference between jealousy and resentment.

amen JP

Amen X2, JP.

(And I had short positions during all the bailouts and short-selling bans, too, Bill!)

Submitted by NotCranky on April 25, 2010 - 2:46pm.

sdrealtor wrote:
I'm jealous that I didnt get one......Siiiighhhh....I thought I was better than you;)

You can have all my feathers and the cap too...I don't need them(in my pretend world).

Submitted by SD Realtor on April 25, 2010 - 2:48pm.

Russ you bully!

Submitted by NotCranky on April 25, 2010 - 2:51pm.

SD Realtor wrote:
Russ you bully!

Rank has its privileges.

Submitted by scaredyclassic on April 25, 2010 - 4:29pm.

i think ultimately health is the ehalthiest comparison category. if you're 50 years old and you still kick ass and you're not fat and you look a hell of a lot better than the other 50 year olds, then, well, you win.

Submitted by SD Realtor on April 25, 2010 - 7:10pm.

I guess I lose then because most everyone I meet says I sound so much younger on the phone.

Submitted by scaredyclassic on April 25, 2010 - 7:30pm.

the competition is not over. check out www.realage.com

great book/website. calculates your real, rather than just numerical age, based on a lot of factors...

Submitted by NotCranky on April 25, 2010 - 8:36pm.

Scaredy,I have always been biologically about 25% younger than my calendar years according to Kaiser physicals..real medical test...not some cheesy, cheater friendly website. Ha! I win. Actually I think health like many things,is to a large degree luck. Like being borne to really sharp parents who help you along early.

Submitted by briansd1 on April 25, 2010 - 8:14pm.

scaredycat wrote:
i think ultimately health is the ehalthiest comparison category. if you're 50 years old and you still kick ass and you're not fat and you look a hell of a lot better than the other 50 year olds, then, well, you win.

I'm not over 50 but I'm with scaredycat.

Animal/human nature is such that everyone needs to feel "superior" to others in some way -- good-looks, income, wife, husband, children, cooking, race, upbringing, clothing, cars, high-tech, sports, knowledge, sacrifice, hardship endured, or whatever.

Feeling blessed to live in America is one way to feel more blessed than people who live in Mexico, or wherever.

People who are humble and spiritual take pride their own character.

Me, I feel superior to others because I don't have a pot belly. So the first thing I look at when meeting others is the stomach. I'm sure they have me beat in wealth or smarts, but I feel good having a flat stomach. In 21st century America it's very rare and precious.

Submitted by scaredyclassic on April 25, 2010 - 8:54pm.

I'm not even sure how "character" would be some separable purer measurement. Like what would you measure, degree of faith? Resilience. Probably the bottom line should be , whoever is having the most fun. No wait I better think on this

Submitted by Arraya on April 25, 2010 - 9:12pm.

No, really, that is not human "nature" at all. That's a culturally biased view. Meaning -- "since we obsess about and do it, it must be natural", Like scardey's over eating analogy. An evolutionary fitness that no longer suits our new environment turned into a social pathology. We are steeped in that shit. Advertising propaganda figured out years ago to appeal to the primal brain for exploiting those quirks. Which, most notably brought us the bigger and bigger SUVs and trucks.

Be careful with that word "natural", though. It implies a biological imperative. Our only biological imperative is survival and that comes with what ever the environment dictates. Being second-order conscousness(aware) beings we can literally create our own environment if we wished. Which in turn, means we could create our own evolution or consciously evolve.

We don't do that, though, because our social systems are still steeped in pre-science thought. Like this self-destructive war-property-money-empire cult we are stuck in that has continuously failed time and time again since the neolithic era. Which is why we are complaining about somebody that could not see the trickery of our money priests as well as berating him for not performing the proper shame-punishment rituals on himself to appease the market gods for being tricked instead of something else. Quite silly really

I would suspect, though, that humans do have a sense of entitlement about living for free, since we did that for the vast majority of our existence. Until some asshole came along and said some fake god gave him the rights to our land and we believed him. And it's been one continuous dispossession after another since. For some reason we still cage ourselves in such a primitive, jejune manner.

Submitted by CDMA ENG on April 25, 2010 - 9:12pm.

[quote=UCGalBut I've come to realize that it's a lifestyle thing driven by kids with texting and mobile internet.

I resisted texting for a long time, but I now need it to communicate with friends and relatives. Of course with the iPhone and all the other smart phones out there, a $30 data plan is compulsory. Add texting that that's an extra $50.

It's an affordable luxury. Consumers are now hit with so many affordable luxuries that it's hard to keep up.
.[/quote]

All of the PDA/Smartphone require a data plan... It's because you can not shut-down the data part of the device and simply use it as a phone...

CE

Submitted by CDMA ENG on April 25, 2010 - 9:25pm.

briansd1 wrote:
The whole financial market is really a casino.

As a society, we have consciously allowed it because we realized that financial innovation accelerates economic activity and wealth creation.

There is really no difference between gambling that a mortgage-backed asset will go bad and gambling that the Chargers will lose the next football game.

The people who run the financial markets are allowed to spread their risks to society at large because the benefits of money as the grease in the wheels of commerce are thought to outweigh the downsides.

That's capitalism. It's not a moral system per se, but it's the best at generating stuff that we want to consume.

Do you want morality; or you do you want to buy all your stuff for cheap, and more and more of it for the income you're making?

Except you forget that the game is rigged agianst you...

CE

Submitted by AN on April 25, 2010 - 9:26pm.

CDMA ENG wrote:
[quote=UCGalBut I've come to realize that it's a lifestyle thing driven by kids with texting and mobile internet.

I resisted texting for a long time, but I now need it to communicate with friends and relatives. Of course with the iPhone and all the other smart phones out there, a $30 data plan is compulsory. Add texting that that's an extra $50.

It's an affordable luxury. Consumers are now hit with so many affordable luxuries that it's hard to keep up.
.


All of the PDA/Smartphone require a data plan... It's because you can not shut-down the data part of the device and simply use it as a phone...

CE[/quote]
I used to have a Blackberry Pearl. AT&T let me have that phone w/ no data plan. BTW, I'm pretty sure you can totally shut down the data part of the device if they really wanted too. You might not be able to do it on the system side, but doing it in the OS or even app level is totally possible. There's just no real good business case to spend extra money to develop such feature.

Submitted by CDMA ENG on April 25, 2010 - 9:36pm.

AN wrote:
CDMA ENG wrote:
[quote=UCGalBut I've come to realize that it's a lifestyle thing driven by kids with texting and mobile internet.

I resisted texting for a long time, but I now need it to communicate with friends and relatives. Of course with the iPhone and all the other smart phones out there, a $30 data plan is compulsory. Add texting that that's an extra $50.

It's an affordable luxury. Consumers are now hit with so many affordable luxuries that it's hard to keep up.
.


All of the PDA/Smartphone require a data plan... It's because you can not shut-down the data part of the device and simply use it as a phone...

CE


I used to have a Blackberry Pearl. AT&T let me have that phone w/ no data plan. BTW, I'm pretty sure you can totally shut down the data part of the device if they really wanted too. You might not be able to do it on the system side, but doing it in the OS or even app level is totally possible. There's just no real good business case to spend extra money to develop such feature.[/quote]

Must have been an older (2G) model. The problem is the PDAs sit on the data channel and try to do their business there. If they can not obtian the data channel then the go to the much slow voice/data channel. Which really makes things bad on the network. Sprint use to let you do that as well until they saw the destruction it caused the network... That is why the really don't allow it now. As for the RIM device it is hard coded to check in with their data servers... except now they are banging away at the voice channel... Trust me... RIM knows my name by now and they don't like me...

But yeah... your are correct about them changing the OS if they wanted too but they won't... goes against why having a Blackberry device...

CE

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