Mortgage Defaults May Be Driving Consumer Spending

[Trader666]

Do you really think banks are the only ones at fault? And that loans for $750K to migrant workers making $14K/year were even remotely typical?

Quote from ElCubano:

again the banks SHOULD not have lent out all the money they did to all the people they shouldn't have lent to...we have already been through this.

If a mexican migrant worker getting paid $14,000 a yr is able to buy a house for $750k who's fault is it when he doesn't pay it back? cmon there were tons of these shit loans repakaged and forced to be labled triple A.

 

[Scataphagos]

Quote from shortie:

not always, but banks are clearly more at fault. in fact, the main reason the average joe lost his job and can't afford the mortgage is also due to banks that created the crisis.

Nope. Congress. Banks just slithered through bad Leftist policies.

 

[shortie]

banks created the crisis that took away jobs from people with mortgages. it is only fair that the mortgages are forgiven, people keep the houses and the banks bear the all the burden and credit scores are not touched.

of course, the life is not fair: the guy gets his credit destroyed for 7 years, does not have a job, does not have a house, does not have savings. at the same time the banks are bailed out and keep making money.

 

[Trader666]

You and sandybestdog should form a professional victim's club.

P.S. the "average Joe" is employed and paying his mortgage.

Quote from shortie:

not always, but banks are clearly more at fault. in fact, the main reason the average joe lost his job and can't afford the mortgage is also due to banks that created the crisis.

 

[krazykarl]

Quote from Trader666:

You're wrong on both counts. It's not always the "bank's fault."

Yes, it is. The entity lending the money is responsible for making sure they get it back, else they, as a business, will go under. They made a bad decision when they lent to someone who ends up not paying it back, it's that simple. The other actors are irrelevant: a loan is between the lender and the lendee. Each side is responsible for their end of the contract. Done. Period. End of story.

 

[shortie]

i am curious where this notion that one is not morally permitted to walk away from a mortgage comes from? what kind of BS is that? a person and a bank sign an agreement. does the agreement say anything about "morals"? i am guessing it only talks about the money and the house.

 

[Scataphagos]

Quote from shortie:

banks created the crisis that took away jobs from people with mortgages. it is only fair that the mortgages are forgiven, people keep the houses and the banks bear the all the burden and credit scores are not touched.

That's enough for me. On Ignore!

 

[shortie]

Quote from Scataphagos:

That's enough for me. On Ignore!

Fine!

here is another one: everyone who is considering defaulting on their mortgage should form a union. the union will have much more negotiating power. i wonder what happens if everyone defaults at the same time....

 

[crgarcia]

Quote from nutmeg:

"Americans are now far more likely to pay their other bills first before their mortgage (which is a big turnaround historically speaking.)

That means they pay off their credit cards, cable bills, car loans in place of their home loans."
--------------

"First he describes a case study of someone who applied for the government's Home Affordable Modification Program.

The person had an $1,880.00 monthly mortgage payment on which they'd defaulted, but said person's monthly bank statement showed payments to a tanning salon, nail spa, liquor stores, DirecTV bill with premium charges, and $1,700.00 in retail purchases from The Gap, Old Navy, Home Depot, Sears, etc."
---------------
cont on link..

http://www.cnbc.com/id/36422316

So true,

Next:
they will default their credit cards to buy useless things
Wait, isn't it already happening?

 

[TraderZones]

Quote from ralph00:

Its happening at the consumer level - someone who walks away from a $3,500 mortgage payment (we'll leave out re taxes) to rent something for $2,000 has just boosted their retail spending capacity by $1,500 (we know they're not going to save the $).

Someone who defaults on $50K of credit card bills, which had required a minimum monthly payment of $1,000/mo., has just boosted their income by that $1,000/mo.

Someone who declares bankruptcy that wipes away several hundred thousand dollars in debt hanging over their heads, is now free to continue life without that weight.

I wonder if you ever experienced any of these. If you did, you would not consider it so carefree. It drives up your car insurance, makes it a lot harder to get a job, get a loan/mortgage, start a business, and a whole lot of other things that people never think of.

Defaulting or bankrupting should only be considered if it is beyond your ability to negotiage/repay the debts...