Walk away from your mortgage because you were an idiot.

[Covar]

I'm not saying you should never walk away from your mortgage. What I'm saying is if you take advantage of the situation by walking away from a mortgage you can afford simply because it's not worth as much as you want, it is not right. Twist it any way you want, it's still wrong.

I see your point, but consider the following scenario...

I owned a house valued in $200000. I did a mortgage on such house amounting to $180000. Right after that, prices plummeted, and the mortgaged house isn't worth more than $100000 now.

I ask you... why should I pay to a bank $180000 for a house not worth more than $100000??? Again, to simplify it, forget the debt and consider I am BUYING the house. It doesn't make sense to pay $180000 for something worth $100000 just because I can afford it, now does it?

A mortgage is in no way different than that. You either pay and have the security property, or don't pay and let the lender have the security. Quite and simple.[/QUOTE]

Because at the time of purchase you agreed on the value of the house. You and the bank both agreed on the value, if it were to go up should the bank be able to take the house?

 

[zero]

Because at the time of purchase you agreed on the value of the house. You and the bank both agreed on the value, if it were to go up should the bank be able to take the house?

Should the borrower default his debt? Of course he should! Just never forget that per the mortgage contract the option belongs to the borrower,

 

[Shakey]

I'm not saying you should never walk away from your mortgage. What I'm saying is if you take advantage of the situation by walking away from a mortgage you can afford simply because it's not worth as much as you want, it is not right. Twist it any way you want, it's still wrong.

I see your point, but consider the following scenario...

I owned a house valued in $200000. I did a mortgage on such house amounting to $180000. Right after that, prices plummeted, and the mortgaged house isn't worth more than $100000 now.

I ask you... why should I pay to a bank $180000 for a house not worth more than $100000??? Again, to simplify it, forget the debt and consider I am BUYING the house. It doesn't make sense to pay $180000 for something worth $100000, now does it?

A mortgage is in no way different than that. You either pay and have the security property, or don't pay and let the lender have the security. Quite and simple.[/QUOTE]

You are dumping your bad investment off on someone else. Not because you can no longer afford it. Not because you need to feed your family. Not because there is no other way out. It's because you are mad that your gamble in real estate didn't pay off like you had wanted. It's greed, plain and simple.

 

[zero]

You are dumping your bad investment off on someone else. Not because you can no longer afford it. Not because you need to feed your family. Not because there is no other way out. It's because you are mad that your gamble in real estate didn't pay off like you had wanted. It's greed, plain and simple.

Is it? Is that really clear cut? What is necessary "to feed your family" anyway? The basic needs so they don't starve to death of freeze in the winter? Or the necessary to ensure your kids grow up healthy? What about their education? One may think public education isn't enough, and may want to save some money for their kids college, instead of investing in overpriced housing. And isn't ALL of that plain greed in the end? And does it really matter to this subject? I mean, I would love to discuss the benefits of socialism over the cut-throat capitalism (and trust me, I am so leftist you would think Krisken is Mr. Milton Friedman himself), but really I fail to see what that would add to this discussion.

What matters again is... WHO made the bad investment after all? The borrower or the bank who accepted an over evaluated security? Again, think about it like that: Should I feel bad for selling a house for $200000 (market price) if right after that the prices plummet and that house isn't worth more than $100000? Should I contact the buyer and give him back $100000? You know, most people feel relieved when they sell right before a market crash...

 

[Odie]

I don't know about you monkeys but I was pretty proud of myself for being a home owner at age 24 through my own grit and grime. I'll be damned if I ever rent again.

Chaz, I know the feeling, being 25 and a home owner was a great feeling... I can say now currently that i worry about being underwater but my situation has not looked so dire that i thought i would never make it out. I just talked with my wife about the fact that due to the economy rather then moving into a better fit house for ourselves and children in 5 -10 years time , we may have to look at a longer schedule or readjust our current home to fit our needs if and when we have children.

Odie,
The difference between this and a deadbeat parent is that people are actually promoting this as a good and right thing to do. There may be walkaways in parenting, but no one says "Hey, good for you Bob! You screwed over your wife and kid." And then Bob goes out and starts a full movement including a website about how to screw your family on their support.

Fade,
My example about the deadbeat parent was just that an example, i wasnt trying to say that it was a "right thing to do" just trying to give example of people walking away from responsiblities that they should feel an obligation to. I feel like my problem with this whole situation is that we hold 2 standards and that people get the shaft an lose of respect in their community for doing something that is consider a "normal" business practice.

How do you feel about PMI? (Private mortage insurance)

I know it drives me insane, Banks will keep that little tax on you until you reach a magic number (certain % of the principal) where they feel you have shown your own ability to pay off your mortgage, yet what they really are doing is trying to get as much money out of a homeowner whom may need a break to cover payments or may fall behind. The Bank/Loan holder will act like the victim if you leave but wont help by removing that tax. I feel like the money the homeowner is paying in PMI could be used to pay down the princpal rather then pay some ridiculous insurance. Thus getting the bank to a happy medium and where they can feel comfortable about the loan.

Excuse any spelling mistakes Ive never been a great novelist

 

[@Li3n]

@Shakey

Dude, while it's stupid unless you bought the house to sell it (like Dave said, it's home, it's current value is nothing compared to it's value over time), it's not wrong because that's how mortgages work... and not because of any imposed protection, but because that's how the whole system came about. Remember A Christmas Carol, when the couple was happy that Scrooge died because the new creditor wouldn't take their house if they where a little late with the payments?!

 

[Odie]

Dude, while it's stupid unless you bought the house to sell it (like Dave said, it's home, it's current value is nothing compared to it's value over time), it's not wrong because that's how mortgages work... and not because of any imposed protection, but because that's how the whole system came about. Remember A Christmas Carol, when the couple was happy that Scrooge died because the new creditor wouldn't take their house if they where a little late with the payments?!

Scrooge doesnt die. Does he? Wait, What version is this? Damm you Brain on a tripod, im going home to read my Dickens.

 

[GasBandit]

Said the Libertarian. A free society allows people to be selfish jerks more than in any other type of society. 'Tis the pains of living free.

So what you're saying is the natural outcome of a free society is to not desire a free society? :hmmm: Not sure I agree with you there.

 

[Adam]

Said the Libertarian. A free society allows people to be selfish jerks more than in any other type of society. 'Tis the pains of living free.

So what you're saying is the natural outcome of a free society is to not desire a free society? :hmmm: Not sure I agree with you there.[/QUOTE]

Acutally, there's a certain logic there around achieving a societal equilibrium, a balance between order and chaos. A completely free society devolves into (or is intended to be) Anarchy. And naturally rules and laws supercede that freedom. We can look at the beginning of the fight for American independence as an example of a free society slowly evolving into form. At the same time, an overly structured and strict society will fight for more freedom, like China currently.

The natural equilibrium of society does not necessarily reflect the wants and needs of an individual.

 

[@Li3n]

Dude, while it's stupid unless you bought the house to sell it (like Dave said, it's home, it's current value is nothing compared to it's value over time), it's not wrong because that's how mortgages work... and not because of any imposed protection, but because that's how the whole system came about. Remember A Christmas Carol, when the couple was happy that Scrooge died because the new creditor wouldn't take their house if they where a little late with the payments?!

Scrooge doesnt die. Does he? Wait, What version is this? Damm you Brain on a tripod, im going home to read my Dickens.[/QUOTE]

The one with the Ghost of Christmas Future... (i'm sure i saw it in the recent Jim Carrey version, and i think it was in the original work too).

 

[Shakey]

You are dumping your bad investment off on someone else. Not because you can no longer afford it. Not because you need to feed your family. Not because there is no other way out. It's because you are mad that your gamble in real estate didn't pay off like you had wanted. It's greed, plain and simple.

Is it? Is that really clear cut? What is necessary "to feed your family" anyway? The basic needs so they don't starve to death of freeze in the winter? Or the necessary to ensure your kids grow up healthy? What about their education? One may think public education isn't enough, and may want to save some money for their kids college, instead of investing in overpriced housing. And isn't ALL of that plain greed in the end? And does it really matter to this subject? I mean, I would love to discuss the benefits of socialism over the cut-throat capitalism (and trust me, I am so leftist you would think Krisken is Mr. Milton Friedman himself), but really I fail to see what that would add to this discussion.

What matters again is... WHO made the bad investment after all? The borrower or the bank who accepted an over evaluated security? Again, think about it like that: Should I feel bad for selling a house for $200000 (market price) if right after that the prices plummet and that house isn't worth more than $100000? Should I contact the buyer and give him back $100000? You know, most people feel relieved when they sell right before a market crash...[/QUOTE]

You're making it more complicated than it is. If it makes you feel better that it's the banks responsibility, go for it. It's easy to blame the banks.

In the end, the borrower stepped up and said "Hey, I would like to buy this property." Your examples only make sense if you feel no obligation to pay back money you loaned. The ability to back out of a mortgage is there to protect people from getting into a hole they can never get out of. Not as an easy way out of a bad decision. If you feel there should be no personal responsibility attached to taking out a mortgage, well I just have to disagree.

---------- Post added at 02:02 PM ---------- Previous post was at 01:53 PM ----------

and not because of any imposed protection

This is an imposed protection.

 

[@Li3n]

Nope, the house is used as collateral, the only protection is that in these situation the banks aren't allowed to wiggle out of the deal they made...

 

[zero]

Nope, the house is used as collateral, the only protection is that in these situation the banks aren't allowed to wiggle out of the deal they made...

Yeah.. I kinda feel he still get it backwards...

 

[@Li3n]

The banks give you money with the idea that you either provide them a steady income over time or if you fail that they take the house...


EDIT: Oh, another post...

 

[Shakey]

Nope, the house is used as collateral, the only protection is that in these situation the banks aren't allowed to wiggle out of the deal they made...

No, it's that banks cannot go after the borrower for any additional losses. If a bank can only get 200k back on a 400k loan due to the value of the home dropping they cannot go after the borrower for the difference. If the banks could, they would.

 

[@Li3n]

BTW, the collateral post was made before i saw he added the thing about imposed protection.

Nope, the house is used as collateral, the only protection is that in these situation the banks aren't allowed to wiggle out of the deal they made...

No, it's that banks cannot go after the borrower for any additional losses. If a bank can only get 200k on a 400k loan they cannot go after the borrower for the difference. If the banks could, they would.[/QUOTE]

Which was the deal they made and the risk they took...

Same as how the defaulter can't ask for his money back if the house actually went up in price...

 

[MindDetective]

Said the Libertarian. A free society allows people to be selfish jerks more than in any other type of society. 'Tis the pains of living free.

So what you're saying is the natural outcome of a free society is to not desire a free society? :hmmm: Not sure I agree with you there.[/QUOTE]

Don't think I even implied that, actually. Just saying that if you want a free society, you have certain consequences that accompany that, including but not limited to self jerks who feel entitled. Ultimately I think SOME regulations are necessary (and I don't speak for society) BUT they should be derived from psychological and sociological principles of human and crowd behavior, particularly when people are likely to act in a manner that is ultimately detrimental to society as a whole. I think taking this approach would lead to LESS regulations (but not necessarily the same as we currently have) but better targeted. Ideally penalties and rules optimized to the give and take involved in the regulatory process.

In summary: Less regulations, yes, but evidence based ones designed to allow freedom wherever possible and to limit harm to society whenever necessary. Even in this scenario, you'll have selfish jerks still.

 

[Shakey]

BTW, the collateral post was made before i saw he added the thing about imposed protection.

Nope, the house is used as collateral, the only protection is that in these situation the banks aren't allowed to wiggle out of the deal they made...

No, it's that banks cannot go after the borrower for any additional losses. If a bank can only get 200k on a 400k loan they cannot go after the borrower for the difference. If the banks could, they would.

Which was the deal they made and the risk they took...

Same as how the defaulter can't ask for his money back if the house actually went up in price...[/QUOTE]

That's fine, and I'm not saying it's a bad thing. It's actually good. The question is, do you feel it is OK to take advantage of those rules because you made a bad investment. Would it be a good financial decision to do it? Yes. I personally think it's a crappy thing to do.

 

[@Li3n]

I don't know about it being a good financial decision either, you loose all the money you already paid back and the house. Then if the house's value goes up you loose even more.

But if you're saying it's crappy because it might affect the economy negatively, sure, i can see that, but not if you're saying it's crappy because you made a deal etc.

 

[Chazwozel]

FOR THE LOVE OF FUCKING GOD! THE WORD IS SPELLED "LOSE" NOT "LOOSE" (like your whore of a mother). THAT'S TWO PEOPLE IN TWO SEPARATE POSTS!!!!!!!!!

 

[zero]

FOR THE LOVE OF FUCKING GOD! THE WORD IS SPELLED "LOSE" NOT "LOOSE" (like your whore of a mother). THAT'S TWO PEOPLE IN TWO SEPARATE POSTS!!!!!!!!!

So yeah, English is NOT my first language (not even my 2nd), and yet I make an effort to communicate to assholes like you. As such times I can't help but wonder if its worth the effort. Mind you, I got your precious spelling right the first time, but got derailed by the mistake, that, you pointed it yourself, is abounding on this thread. I'm sorry if that hurt your linguistic sensibilities, and let me ensure you, it won't happen again.

Ah, et pendant que j'y suis, vas te faire enculer, connard.

 

[GasBandit]

Said the Libertarian. A free society allows people to be selfish jerks more than in any other type of society. 'Tis the pains of living free.

So what you're saying is the natural outcome of a free society is to not desire a free society? :hmmm: Not sure I agree with you there.[/QUOTE]

Acutally, there's a certain logic there around achieving a societal equilibrium, a balance between order and chaos. A completely free society devolves into (or is intended to be) Anarchy. And naturally rules and laws supercede that freedom. We can look at the beginning of the fight for American independence as an example of a free society slowly evolving into form. At the same time, an overly structured and strict society will fight for more freedom, like China currently.

The natural equilibrium of society does not necessarily reflect the wants and needs of an individual.[/QUOTE]

I don't think it's any sort of equilibrium as much as a cycle. If it were equilibrium, we would reach a point where no further change precipitated once the equilibrium was reached. Rather, I think it is more cyclical in nature. Much as I hate to bring up the old chestnut of the "tyranny leads to revolution leads to freedom leads to prosperity leads to complacency leads to dependency leads to tyranny" bit, I think it's more along the lines of what we're seeing.

 

[Chazwozel]

FOR THE LOVE OF FUCKING GOD! THE WORD IS SPELLED "LOSE" NOT "LOOSE" (like your whore of a mother). THAT'S TWO PEOPLE IN TWO SEPARATE POSTS!!!!!!!!!

So yeah, English is NOT my first language (not even my 2nd), and yet I make an effort to communicate to assholes like you. As such times I can't help but wonder if its worth the effort. Mind you, I got your precious spelling right the first time, but got derailed by the mistake, that, you pointed it yourself, is abounding on this thread. I'm sorry if that hurt your linguistic sensibilities, and let me ensure you, it won't happen again.

Ah, et pendant que j'y suis, vas te faire enculer, connard.[/QUOTE]


Only a Frenchman would be so offended... <turns nose up into the air>

*English isn't my first language either, jackass. Want a cookie?

 

[Chibibar]

I'm not saying you should never walk away from your mortgage. What I'm saying is if you take advantage of the situation by walking away from a mortgage you can afford simply because it's not worth as much as you want, it is not right. Twist it any way you want, it's still wrong.

I never said there should be no risks to the banks.

That is more of a personal moral obligation There are personal moral and then there are legal moral.

 

[zero]

Only a Frenchman would be so offended... <turns nose up into the air>

*English isn't my first language either, jackass. Want a cookie?

Well, see? NOW I'm offended. I'M BRAZILIAN DAMMIT. Yes, since JCM isn't really after you those days, our Ministry of Flamewars with Chazwozel appointed me as his replacement. I realized you wouldn't really get "vá tomar no cu seu viado", and somehow remembered you could read French (my 2nd language).

 

[Green_Lantern]

Only a Frenchman would be so offended... <turns nose up into the air>

*English isn't my first language either, jackass. Want a cookie?

Well, see? NOW I'm offended. I'M BRAZILIAN DAMMIT. Yes, since JCM isn't really after you those days, our Ministry of Flamewars with Chazwozel appointed me as his replacement. I realized you wouldn't really get "vá tomar no cu seu viado", and somehow remembered you could read French (my 2nd language).[/QUOTE]

I just posting here to inform that I think it is wrong and not above theft to walk away from a debt.
Also, I am a fellow brazilian, that just understood what you said, and also, I am queer as 3 dollar bill, guess who just got reported?

 

[zero]

I just posting here to inform that I think it is wrong and not above theft to walk away from a debt.
Also, I am a fellow Brazilian, that just understood what you said, and also, I am queer as 3 dollar bill, guess who just got reported?

Yep, I know, I though about you after I posted it. I wont defend myself, I kinda hoped you would miss it. Anyway, am sorry for that, and I'll take anything the admins think I deserve (and please, don't cut me any slack for this apology. I was way out of line).

 

[Gusto]

Bring it back a bit guys.

 

[Krisken]

I say eat the poor. Plus, Bauer is right. Feed the poor, and they breed.

 

[Chazwozel]

Only a Frenchman would be so offended... <turns nose up into the air>

*English isn't my first language either, jackass. Want a cookie?

Well, see? NOW I'm offended. I'M BRAZILIAN DAMMIT. Yes, since JCM isn't really after you those days, our Ministry of Flamewars with Chazwozel appointed me as his replacement. I realized you wouldn't really get "vá tomar no cu seu viado", and somehow remembered you could read French (my 2nd language).[/QUOTE]

OHHHH! Swearing at me in another language. I'm shaking in my boots. Loose/Lose is a pet peeve of mine, so just pull the piranha out of your ass and calm down.

 

[zero]

OHHHH! Swearing at me in another language. I'm shaking in my boots. Loose/Lose is a pet peeve of mine, so just pull the piranha out of your ass and calm down.

Too late Chaz, I already pwned myself on the thread. Again, deeply sorry Green Lantern, a more personal apology is sent on PM.

 

[Krisken]

Only a Frenchman would be so offended... <turns nose up into the air>

*English isn't my first language either, jackass. Want a cookie?

Well, see? NOW I'm offended. I'M BRAZILIAN DAMMIT. Yes, since JCM isn't really after you those days, our Ministry of Flamewars with Chazwozel appointed me as his replacement. I realized you wouldn't really get "vá tomar no cu seu viado", and somehow remembered you could read French (my 2nd language).[/QUOTE]

OHHHH! Swearing at me in another language. I'm shaking in my boots. Loose/Lose is a pet peeve of mine, so just pull the piranha out of your ass and calm down.[/QUOTE]
That there is some sound advice. Maybe it would hold more weight if you would heed it as well.

 

[Kitty Sinatra]

Only a Frenchman would be so offended... <turns nose up into the air>

*English isn't my first language either, jackass. Want a cookie?

Well, see? NOW I'm offended. I'M BRAZILIAN DAMMIT. Yes, since JCM isn't really after you those days, our Ministry of Flamewars with Chazwozel appointed me as his replacement. I realized you wouldn't really get "vá tomar no cu seu viado", and somehow remembered you could read French (my 2nd language).[/QUOTE]

OHHHH! Swearing at me in another language. I'm shaking in my boots. Loose/Lose is a pet peeve of mine, so just pull the piranha out of your ass and calm down.[/QUOTE]
That there is some sound advice. Maybe it would hold more weight if you would heed it as well.[/QUOTE]
Would it be humorous if I said "The same applies to you, pal?"

 

[zero]

yeah, yeah, now let's move on, shall we? Chaz already educated me on the fine subtleties of the English Language, Green Lantern exposed me as an homophobic S.O.B., Gusto conceded me some hard-earned points, heck, we even have a picture of Milton friggin' Friedman on the thread. Too much is too much, time to move this back on its rails.

Soo... mortgage, right? As I see it, to make a mortgage is not too different from selling your house to a bank and then buying it back slowly. Is it really immoral to decide not buy back something because you decide it is no longer worth it?

<edit - double post>

 

[Green_Lantern]

Soo... mortgage, right? As I see it, to make a mortgage is not too different from selling your house to a bank and then buying it back slowly. Is it really immoral to decide not buy back something because you decide it is no longer worth it?

On the context of a mortgage?

Yes, a lot.