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Message
re: Re It's "immoral" to strategically default on one's mortgage
Posted on 12/12/11 at 4:49 pm to Tiger JJ
Posted on 12/12/11 at 4:49 pm to Tiger JJ
I don't know. I'm not a mortgage expert, nor a collateral expert. Nor a lender.
But, if you want to talk in simple terms (which I believe this thread is about....immoral vs not immoral)....
When someone borrows money from someone, they should pay them back in full. Period.
I realize the system is set up a little differently than above, but maybe we should all get back to the simplest form of it all: owe money, pay it back.
All That said, I have zero issues with someone working the system through all current legal means necessary to help themselves and their family. My issues aren't with the people that do this, but with the system that allows them to do this.
But, if you want to talk in simple terms (which I believe this thread is about....immoral vs not immoral)....
When someone borrows money from someone, they should pay them back in full. Period.
I realize the system is set up a little differently than above, but maybe we should all get back to the simplest form of it all: owe money, pay it back.
All That said, I have zero issues with someone working the system through all current legal means necessary to help themselves and their family. My issues aren't with the people that do this, but with the system that allows them to do this.
This post was edited on 12/12/11 at 4:51 pm
2
Posted on 12/12/11 at 6:54 pm to JPLSU1981
quote:
My issues aren't with the people that do this, but with the system that allows them to do this.
You're effectively talking about debtor's prison.
Posted on 12/12/11 at 7:39 pm to Tiger JJ
After pondering your question, I do believe it is indeed immoral. Is it on the level of murder or rape? Of course not. Should it be illegal? Of course not. But I do believe it is wrong and should be frowned upon by society.
If someone fails to pay back what they borrowed in full to the person/entity that lent them the money, I believe the person "got away with one" and should feel guilty, should feel that they've done wrong, and should feel that they screwed up and potentially hurt someone else financially.
If someone fails to pay back what they borrowed in full to the person/entity that lent them the money, I believe the person "got away with one" and should feel guilty, should feel that they've done wrong, and should feel that they screwed up and potentially hurt someone else financially.
Posted on 12/12/11 at 8:04 pm to JPLSU1981
Funny story about mortgage bankers association building. Co-star a real estate data service bought their building in the short sale to occupy as a user. Got tax credits for moving jobs into dc from the suburbs and then flipped the building in a sale lease back transaction the following year for over $100 million, an increase of about $60 million over the purchase price. Great illustration of why it's important to move the process along rather than prolonging the pain.
Posted on 12/12/11 at 8:31 pm to DandyPimp
I do know that about 20 years ago I bought a house in Lafayette during the oil boom. oil busted and I had to move. i paid the note 3 months and simply had no more money. I went to the mortgage company, handed them the keys and told them I was broke. I heard nothing from them...about 7 months later I had to go down and sign some documents allowing someone else to buy the house. About 2 years later, when I was attempting to buy another house, it showed up on my credit. I contacted an attorney. He said it was a "short-sale" and should not have been used against my credit. He wrote a letter and boom - it was off.
Never really thought about it much. Guess I was lucky.
Never really thought about it much. Guess I was lucky.
Posted on 12/12/11 at 9:25 pm to JPLSU1981
quote:
If someone fails to pay back what they borrowed in full to the person/entity that lent them the money, I believe the person "got away with one"
even if there is collateral?
Posted on 12/12/11 at 9:43 pm to SlowFlowPro
Collateral and interest rate are the keys here. This topic of moral obligation to repay a mortgage is completely ridiculous.
You are not "borrowing money" from a well-wishing good Samaritan. The bank is letting you borrow a certain amount of money, and they get the house (or other collateral) if you don't repay. Therefore they should hedge this by letting you borrow less than the stated collateral. Interest covers the cost of capital, principal risk, etc.
Now here is the real tragedy. When these loans were shifted to Fannie/Freddie, it was the taxpayers' money placed at risk. So the incentive structure above fades away. Banks get rich by giving mansions to strawberry pickers and setting taxpayer money on fire. Yikes.
You are not "borrowing money" from a well-wishing good Samaritan. The bank is letting you borrow a certain amount of money, and they get the house (or other collateral) if you don't repay. Therefore they should hedge this by letting you borrow less than the stated collateral. Interest covers the cost of capital, principal risk, etc.
Now here is the real tragedy. When these loans were shifted to Fannie/Freddie, it was the taxpayers' money placed at risk. So the incentive structure above fades away. Banks get rich by giving mansions to strawberry pickers and setting taxpayer money on fire. Yikes.
Posted on 12/12/11 at 9:45 pm to JPLSU1981
quote:
When someone borrows money from someone, they should pay them back in full. Period.
Why?
I really don't understand this.
My agreement with my bank isn't "I will pay you back". It is "I will either pay you back or surrender the collateral (house)" Furthermore, it's an agreement that the bank wrote up.
A borrower always has two options in a mortgage. What is immoral about exercising one or the other?
Posted on 12/12/11 at 9:52 pm to ZereauxSum
Quiet you somodite. God damn immorals running all over this place.
Posted on 12/12/11 at 10:10 pm to DandyPimp
quote:
Funny story about mortgage bankers association building. Co-star a real estate data service bought their building in the short sale to occupy as a user. Got tax credits for moving jobs into dc from the suburbs and then flipped the building in a sale lease back transaction the following year for over $100 million, an increase of about $60 million over the purchase price. Great illustration of why it's important to move the process along rather than prolonging the pain.
Posted on 12/12/11 at 10:35 pm to DandyPimp
so there 
Posted on 12/12/11 at 11:35 pm to Tiger JJ
I am actually debating this now. The wife and I are moving next summer and we will not get what we owe on our current house when we try to sell.
The house we currently own is in my name only and my wife has no ties to it whatsoever, so my credit will take a major hit, but hers will still be good and thats why I am even considering this.
The house we currently own is in my name only and my wife has no ties to it whatsoever, so my credit will take a major hit, but hers will still be good and thats why I am even considering this.
Posted on 12/13/11 at 6:25 am to bulldog95
quote:
but hers will still be good and thats why I am even considering this.
When you put it in her name though, are there no ramifications for her benig married to a person that just defaulted?
Posted on 12/13/11 at 7:34 am to Tiger JJ
What's the matter? Is your conscience (assuming you have a conscience since you don't think it's unethical to borrow money and then willingly not pay it back even though you have the income to do so) hurting you since you defaulted on your home mortgage?
That was in Washington, wasn't it, where the state has non-recourse laws on home loans?
That was in Washington, wasn't it, where the state has non-recourse laws on home loans?
This post was edited on 12/13/11 at 7:36 am
Posted on 12/13/11 at 7:43 am to bulldog95
quote:
I am actually debating this now. The wife and I are moving next summer and we will not get what we owe on our current house when we try to sell.
The house we currently own is in my name only and my wife has no ties to it whatsoever, so my credit will take a major hit, but hers will still be good and thats why I am even considering this.
If your dwelling is in Louisiana (and your avatar quote seems to imply that it is) you had better research your situation and your loan agreement before you assume you can just walk away with a short sell.
Most home loans made in La. are 'full recourse' loans. That means the lender can go after your personal assets, garnish your wages, etc. to make up the deficiency between what you owe and what the house sells for and gets applied to the loan.
The last I looked (which has been a couple of years) 38 states are full recourse states with the other 12 being non-recourse states, where the sale of the house and the application of the sales proceeds satisfies the debt and the lender is not allowed to pursue other collection methods.
Most of the non-recourse states are the Democratic-controlled liberal states on the west coast and in New England, as I recall.
Posted on 12/13/11 at 9:39 am to LSURussian
quote:
What's the matter? Is your conscience (assuming you have a conscience since you don't think it's unethical to borrow money and then willingly not pay it back even though you have the income to do so) hurting you since you defaulted on your home mortgage?
That was in Washington, wasn't it, where the state has non-recourse laws on home loans?
And right on cue. Despite your stalking, you know NOTHING about me or my personal life. And I'd like to keep it that way...except to tell you - as per usual - you are full of shite, spouting lies and way off base.
quote:
That was in Washington, wasn't it, where the state has non-recourse laws on home loans?
Never can pass up a chance to phish for personal data on me, can you? Never can pass up the chance for a personal attack instead of simply addressing the matter at hand, can you?
:creepy:
Pathetic.
This post was edited on 12/13/11 at 9:48 am
Posted on 12/13/11 at 9:46 am to LSURussian
quote:
If your dwelling is in Louisiana (and your avatar quote seems to imply that it is) you had better research your situation and your loan agreement before you assume you can just walk away with a short sell.
A short sale is probably not worth doing if it doesn't come complete with a waiver of DJ.
quote:
Most home loans made in La. are 'full recourse' loans. That means the lender can go after your personal assets, garnish your wages, etc. to make up the deficiency between what you owe and what the house sells for and gets applied to the loan.
A huge portion of loans are also Fannie/Freddie and they have very rarely (up to this point) pursued DJ's.
quote:
Most of the non-recourse states are the Democratic-controlled liberal states on the west coast and in New England, as I recall.
quote:
Alaska
Arizona
California
Connecticut
Florida
Idaho
Minnesota
North Carolina
North Dakota
Texas
Utah
Washington
Full of shite, as usual, I see.
You're batting 1.000 in this thread! First the ad hom and then straight on to the misinformation! Bravo!
LINK
LINK
Posted on 12/13/11 at 9:55 am to Tiger JJ
To be fair, this thread was basically a big chunk of LSURussian bait.
Posted on 12/13/11 at 9:56 am to Tiger JJ
What part of what I posted is not true? Of course, then I'd have to believe you and that's a fantasy world unto itself.
Back on topic, it's a big difference between (1) a borrower who can't repay his home loan because his situation has changed, i.e., he lost his job, serious illness, divorce, etc. and (2) someone who refuses to repay a loan to satisfy his own personal convenience although he continues to have the income/assets to repay the obligation.
Those in the #2 category are scumbags with non-existent ethics, IMO, and just a notch above street panhandlers.
Using the corporate example you posted, American Airlines was to the point where their continual losses were going to eventually affect them as a going concern. They had to use the bankruptcy provisions in order to adjust their collective bargaining agreements to get their expenses under control. It did not appear to be a matter of convenience but of necessity, sooner or later. They chose "sooner."
That is a big difference between someone just walking away from a personal obligation just because they can.
Back on topic, it's a big difference between (1) a borrower who can't repay his home loan because his situation has changed, i.e., he lost his job, serious illness, divorce, etc. and (2) someone who refuses to repay a loan to satisfy his own personal convenience although he continues to have the income/assets to repay the obligation.
Those in the #2 category are scumbags with non-existent ethics, IMO, and just a notch above street panhandlers.
Using the corporate example you posted, American Airlines was to the point where their continual losses were going to eventually affect them as a going concern. They had to use the bankruptcy provisions in order to adjust their collective bargaining agreements to get their expenses under control. It did not appear to be a matter of convenience but of necessity, sooner or later. They chose "sooner."
That is a big difference between someone just walking away from a personal obligation just because they can.
Posted on 12/13/11 at 10:03 am to Tiger JJ
Good for you! You researched data (which I already admitted was dated since I have not looked at it for 2 years +/-) and proved me somewhat incorrect. Does that make you feel better about being a deadbeat?
And, btw, I consider Alaska and Arizona as being on or near the west coast. Minnesota is not west but it is a Dem-heavy state.
But, again, if it makes you feel better, bravo!
And, btw, I consider Alaska and Arizona as being on or near the west coast. Minnesota is not west but it is a Dem-heavy state.
But, again, if it makes you feel better, bravo!
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