The Let It Sink way is going to become The Way. It doesn’t take a lot of examination or thought to realize that walking away from an upside down house is going to become the norm. After decades of having pro-business economics and Darwinian capitalism shoved down their throats, Americans have finally figured out that it can finally benefit them somehow. In this case, if they look at their mortgages in the same way that the banks do, which is as amoral business agreements, then rather than beating themselves up about obligations and failure, they will do a little bit of math and dump the houses right in the bank’s lap. This is absolutely going to destroy many banks in the US and around the world. They have always depended on people acting out of moral obligation, while the banks themselves acted out of pure self interest. Now that the playing field is being equalized, many banks will die. Good riddance.
Today’s New York Times has an entertaining article about how the ridiculous loans that banks originated to boost their profits in the short term have made walking away all the more attractive to home owners.
“Facing Default, Some Walk Out on New Homes,” (NYTimes - John Leland – Feb 29, 2008)
7 comments:
I dont think they will stop there.
Credit cards, student loans, car loans, all debt can be viewed this way.
If the credit card comanies were stupid enough to give me sixty thousand dollars, or sell me an Escalade, or pay for my education even though I had a C average in high school, they should have known better.
Once their credit is ruined, there's no point in paying any of it back.
I believe there are millions of americans out there right now who are squeezing out the last bit of credit they can get with the full intention of walking away from it all.
You say Short the banks I say F&*k the banks
http://www.nytimes.com/2008/03/01/business/01aplend-web.html?ref=business
In case you felt like you had an obligation to Countrywide to deal with them morally, this article describes their actions & attitude towards the customer.
Bankruptcy Court Asked to Sanction Countrywide
Article Tools Sponsored By
By DOW JONES/AP
Published: March 1, 2008
In a move that escalates the legal trouble faced by the mortgage lender, the Countrywide Financial Corporation, federal regulators have asked the courts to sanction the company for abusing the bankruptcy system.
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Those bastards tried misapplying my payments and I stopped them by issuing threats. You have to watch them like a hawk.
They refused to admit misapplying payments, but quietly moved the extra several hundred dollars (monthly) I had sent in (towards principal) from the "prepay addition to escrow" into the principal reduction. They knew how to reduce principal- as several months it was applied correctly- but it started to be misapplied once they realized I was going to do this on a consistent basis and pay off the loan early, thus reducing their interest income.
Of course they may have only been servicer of the loan, in which case it benefits them only by keeping the money in a non-interest earning escrow account (earning interest for them instead of me). Pretty enlightening stuff when you realize it is part of their business practice to consistently make these "clerical mistakes".
Now I learned that they are making up fees and arbitrarily adding them to peoples accounts- to collect more money from them in the bogus late payment fees and penalties for payments that were actually received on time. It turns out that others took much more abuse from them than I ever did.
From 455 to 283. Wow. simply Wow
"Sgt. First Class Nicklaus Skaggs is among those looking to walk away. Mr. Skaggs bought his home in April 2005 shortly after returning to California from a one-year tour of duty in Baghdad.
The $455,000 three-bedroom home he and his wife purchased in Vacaville, about one hour northeast of San Francisco, is worth an estimated $285,000 today, well below the $453,000 he owes on his mortgage. The monthly mortgage payment, which jumped after its interest rate increased, is now $4,000, up from $2,980 when he bought the house."
http://realestaterecord.blogspot.com/2008/02/sgt-first-class-nicklaus-skaggs.html
Born to Lose,
I agree.
Banks want to be allowed to charge 30% on credit cards. They want to outlaw bankruptcy. Then they can sink or swim on their own. They cannot claim that they were ripped off by millions of middle class people. The opposite is true.
FYI, I have started putting some money in way out of the money Puts on some of these banks/financial firms. I will lose money on most of them, but if one goes bankrupt I will make 30 to 60 times my investment on that one. Obviously you don't want to put your whole portfolio into bets like that, but I think investing a small percentage of your money that way might pay off.
Russ Dogg,
And they want the public to give them money. I say nuke'em. The bottom line is that educating people to walk away if it suits them is the nastiest thing you can do to a bank. The banks can't win in a fair fight. Tell all your friends, and thanks for the info.
Keith
Just came across your blog and I am one who loves it. I look forward to reading all your articles and linking to them. I am just starting to stop my payments and started my blog to record the process and feelings we might go through during this process. It took me a while to see this point of view but it's the only thing that makes since. Keep it up!
This the worst things that banks are only thinking of their benefits, that's the only reason in these banks destruction.
bank sink
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