Deadbeat nation
in [Design]
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From: Spehro Pefhany on 2 Jun 2010 13:29 On Wed, 2 Jun 2010 09:09:51 -0700, "Joel Koltner" <zapwireDASHgroups(a)yahoo.com> wrote: > >However, I don't see anything wrong with someone deciding that they'll take >their (credit rating) lumps and deciding that defaulting on their mortgage -- >AND MOVING OUT -- is a better option than sticking with a mortgage that's >nearly eating them alive, even if strictly speaking they can keep up with the >payments: This is just a "business" decision, no different than a business >owner with, say, a chain of 10 restaurants choosing to default and let the >bank foreclose on one location that hasn't been performing anything close to >his expectations. It would be a business decision if the person went bankrupt and had to liquidate basically all their assets, if necessary, in order to repay as much as possible of the money owed to the lender. So-called non-recourse states have distort the market with legislation limiting or obstructing lender's rights to go after the deadbeat for ALL the money owed.
From: Joel Koltner on 2 Jun 2010 13:48 "Spehro Pefhany" <speffSNIP(a)interlogDOTyou.knowwhat> wrote in message news:vl4d06ttpkggskohj2jq4gpuhmi7hqfjig(a)4ax.com... > It would be a business decision if the person went bankrupt and had to > liquidate basically all their assets, if necessary, in order to repay > as much as possible of the money owed to the lender. If we held businesses to the same standard I'd tend to agree... but it's very standard business practice that, if one of your divisions is underperforming, you close it down, defaulting on any outstanding loans, and keep on going -- even if strictly speaking the ovreall company is in generally good health and could have afforded to keep the company around with, e.g., one division propping up the other. > So-called non-recourse states have distort the market with legislation > limiting or obstructing lender's rights to go after the deadbeat for > ALL the money owed. There's likely some reform needed there that I'd readily vote for, but as-is such laws have to be viewed just as the cost of doing business. This sort of issue is very messy to deal with legally since pretty much any protection you give to people who had every intention of meeting their obligations can also be abused by people out to defraud others. (And of course it's very common that incomptence gives the appearance of malice and vice versa...) ---Joel
From: dagmargoodboat on 2 Jun 2010 15:01 On Jun 2, 12:48 pm, "Joel Koltner" <zapwireDASHgro...(a)yahoo.com> wrote: > "Spehro Pefhany" <speffS...(a)interlogDOTyou.knowwhat> wrote in message > > news:vl4d06ttpkggskohj2jq4gpuhmi7hqfjig(a)4ax.com... > > > It would be a business decision if the person went bankrupt and had to > > liquidate basically all their assets, if necessary, in order to repay > > as much as possible of the money owed to the lender. > > If we held businesses to the same standard I'd tend to agree... but it's very > standard business practice that, if one of your divisions is underperforming, > you close it down, defaulting on any outstanding loans, and keep on going -- > even if strictly speaking the ovreall company is in generally good health and > could have afforded to keep the company around with, e.g., one division > propping up the other. > > > So-called non-recourse states have distort the market with legislation > > limiting or obstructing lender's rights to go after the deadbeat for > > ALL the money owed. > > There's likely some reform needed there that I'd readily vote for, but as-is > such laws have to be viewed just as the cost of doing business. > > This sort of issue is very messy to deal with legally since pretty much any > protection you give to people who had every intention of meeting their > obligations can also be abused by people out to defraud others. (And of > course it's very common that incomptence gives the appearance of malice and > vice versa...) > > ---Joel The original article in the NYT said if you were underwater in your mortgage, you should bail so you could stick it to the bank. That's roughly a quarter of America. It had a number of people explaining the best strategies, that you could count on about a year living rent-free before being evicted, and could save up all that money. So, that's welching, then stealing. The "Yes we can's" in the comment section were chilling. The taxpayers ultimately absorb it, since Freddie and Fannie have guaranteed so much of it. -- Cheers, James Arthur
From: dagmargoodboat on 2 Jun 2010 15:13 On Jun 2, 2:01 pm, dagmargoodb...(a)yahoo.com wrote: > On Jun 2, 12:48 pm, "Joel Koltner" <zapwireDASHgro...(a)yahoo.com> > wrote: > > > "Spehro Pefhany" <speffS...(a)interlogDOTyou.knowwhat> wrote in message > > >news:vl4d06ttpkggskohj2jq4gpuhmi7hqfjig(a)4ax.com... > > > > It would be a business decision if the person went bankrupt and had to > > > liquidate basically all their assets, if necessary, in order to repay > > > as much as possible of the money owed to the lender. > > > If we held businesses to the same standard I'd tend to agree... but it's very > > standard business practice that, if one of your divisions is underperforming, > > you close it down, defaulting on any outstanding loans, and keep on going -- > > even if strictly speaking the ovreall company is in generally good health and > > could have afforded to keep the company around with, e.g., one division > > propping up the other. > > > > So-called non-recourse states have distort the market with legislation > > > limiting or obstructing lender's rights to go after the deadbeat for > > > ALL the money owed. > > > There's likely some reform needed there that I'd readily vote for, but as-is > > such laws have to be viewed just as the cost of doing business. > > > This sort of issue is very messy to deal with legally since pretty much any > > protection you give to people who had every intention of meeting their > > obligations can also be abused by people out to defraud others. (And of > > course it's very common that incomptence gives the appearance of malice and > > vice versa...) > > > ---Joel > > The original article in the NYT said if you were underwater in your > mortgage, you should bail so you could stick it to the bank. That's > roughly a quarter of America. > > It had a number of people explaining the best strategies, that you > could count on about a year living rent-free before being evicted, and > could save up all that money. > > So, that's welching, then stealing. > > The "Yes we can's" in the comment section were chilling. The > taxpayers ultimately absorb it, since Freddie and Fannie have > guaranteed so much of it. Articles: The Way We Live Now - Walk Away From Your Mortgage! http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html Owners Stop Paying Mortgages, and Stop Fretting http://www.nytimes.com/2010/06/01/business/01nopay.html
From: Joel Koltner on 2 Jun 2010 15:25
<dagmargoodboat(a)yahoo.com> wrote in message news:c01858b9-cd1f-4768-898f-1c2866b7a1ef(a)j9g2000vbp.googlegroups.com... > It had a number of people explaining the best strategies, that you > could count on about a year living rent-free before being evicted, and > could save up all that money. > So, that's welching, then stealing. Yes, completely agreed there. If you want to strategically default on your mortgage and save up some money, at least have the fortitude to go find some roommates and get a cheap flat or something (go live in your car if you like!) rather than screwing over the bank. I would like to see the return of boarding houses -- seems as though they were a "win" in many ways, with cheaper rent than regular apartments (due to the shared kitchen/bath facilities), easier upkeep (due to shared chores), etc. But these days some people seem to construe "rugged individualism" to mean that they ought to be able to play loud music at 3AM and not have to clean up after their dog, so perhaps the idea of a bit of shared sacrifice and responsibility for sake of living frugally is considered unacceptable. I mean (and sorry for the topic drift here), how many young adults would actually sign up for something like the CCC if it were still available in the form from the '30s? --> http://www.opb.org/programs/oregonexperience/programs/15-Civilian-Conservation-Corps (very good video...): "The program targeted unemployed young men, veterans and American Indians hard hit by the Great Depression. The CCC boys, as they were called, were required to send a portion of their wages home to their parents. The boys also received free education, healthcare and job training. Throughout its nine-year existence, the program put millions to work on federal and state land for the 'prevention of forest fires, floods, and soil erosion, plant, pest, and disease control.' Nationwide, enrollees planted three billion trees and came to be known as the Tree Army." ---Joel |