Originally Posted By Mr X ***It is ridiculous to be able to just walk away from any type of debt.*** You are aware, I assume, that companies walk away from any type of debt that they find inconvenient all the time. Right? You're aware of that fact, no? How is it any different? Companies call it "strategic default", and/or "debt restructuring". Happens every day.
Originally Posted By barboy RT, I notice that you are consistent when it comes to obligation/duty.......except for one thing. There are not too many folk who can stick things out in the face of adversity; too many times people run from pressing issues and take the 'easy' way out. Your stances on carrying unwanted pregnancies to term, riding military jets into the ground instead of bailing out and paying off debts instead of 'walking' shows that you value duty above convenience.
Originally Posted By fkurucz I'm all for duty over convenience, but if the Big Boyz get a pass then why should the little guys take it on the chin?
Originally Posted By RoadTrip <<What's your solution? Bring back debtors prisons or something?>> No. It would cost too much. ;-) Do whatever it takes to make the loan affordable. Lower the interest rate. Extend the term. For those who could afford the current payments but are just walking away because they see the value drop below the amount they owe... the heck with them. Those who have watched their investments drop by 50% over the last couple of years aren't able to walk away from their losses and get a "do over". Why should homeowners?
Originally Posted By RoadTrip <<I'm all for duty over convenience, but if the Big Boyz get a pass then why should the little guys take it on the chin?>> The Big Boyz don't get a pass. Why do you think banks are returning TARP funds and Ford is saying thanks but no thanks? The money comes with strings attached. Not only is the government taking an ownership position in the companies, they are taking control in ways a private lender never would... limiting executive compensation, etc.
Originally Posted By RoadTrip <<Your stances on carrying unwanted pregnancies to term, riding military jets into the ground instead of bailing out and paying off debts instead of 'walking' shows that you value duty above convenience.>> Yes I do, and I try to do that in my personal life. In other words, walk the talk. I do not oppose true "safety net" type programs for people who just have no other options. But I think it is all too common today for people to not take responsibility for their actions... to take the easy way out. I can understand someone walking away from a mortgage with a 5-year balloon that they absolutely cannot refinance in the current climate. But let someone with a $250K annual income walk away from a $500K mortgage just because the home is now worth only $300K? I don't think so.
Originally Posted By Kar2oonMan >>Do whatever it takes to make the loan affordable. Lower the interest rate. Extend the term.<< But that would be reasonable. Does the financial industry do "reasonable" anymore?
Originally Posted By hopemax There have been mortgage restructuring. And the report out from last week is that 70% of those have ended up back in default. Apparently, people living not within their means, with enormous debt (CC, medical,etc), and people without jobs still have problems making their mortgage.
Originally Posted By fkurucz <<The Big Boyz don't get a pass.>> Sure they do. They declare bankruptcy and walk away from their debts. If you recall bankruptcy for the little guys was tightened up significantly, which made it much harder for Joe 6 Pack to walk away from his debts. And the so called "cram down" legislation for underwater mortgages in bankruptcy was shot down. Sure, the bankers chose to give the tarp money back because it had too many strings attached. <<But let someone with a $250K annual income walk away from a $500K mortgage just because the home is now worth only $300K? I don't think so.>> Some would simply call that "good business sense".
Originally Posted By fkurucz <<and people without jobs still have problems making their mortgage>> Ah, the 800 lb gorilla. Prime defaults will dwarf the subprime defaults by the time this party is over. And the Alt-A resets are just catching their stride. What is interesting is that I have been reading that many lenders are not foreclosing on underwater mortgages, as they stand to lose too much. This of course is pinned on the hope that once things get better that the borrowers will resume servicing their loans.
Originally Posted By RoadTrip <<Some would simply call that "good business sense".>> I would call it white collar crime. Those people I wouldn't mind seeing jailed.
Originally Posted By EighthDwarf <<I would call it white collar crime. Those people I wouldn't mind seeing jailed.>> I would be content to see them taxed on the foregiven mortgage amounts. That would create a large enough disinective to make them stop for the most part. There are real ways the federal government can help get us out of this crisis. They just choose not to do them.
Originally Posted By Mr X ***<<Some would simply call that "good business sense".>> I would call it white collar crime. Those people I wouldn't mind seeing jailed.*** If it were a crime, they wouldn't do it. That's what they do, they find all the loopholes and exploit the crap out of them. Those pricey lawyers gotta earn their keep somehow, right?
Originally Posted By fkurucz <<That's what they do, they find all the loopholes and exploit the crap out of them.>> Unfortunately those loopholes don't exist for Joe 6 Pack, because he doesn't line the pockets of lawmakers with campaign contributions. This of course is why the little people are always lectured about "personal responsibility", while the fat cats make out like bandits. Funny how clowns like Donald Trump are serial bankruptcy filers and get away with it, but heaven help Joe 6 Pack if he has a recourse mortgage on his underwater house and just lost his job. CitiWellsChaseEtc. bank can haunt him for years on any loss incurred on the foreclosure.
