"One of the greatest fears for lenders (and investors in mortgage backed securities) is that it will become socially acceptable for upside down middle class Americans to walk away from their homes."
When is socially acceptable for lenders to obtain obscene bonuses out of tax payer's bail outs what would they expect? What's good for the goose good for the gander wouldn't you say?
About 17% of households would default — even if they could pay the mortgage — when the equity shortfall hits 50% of the house’s value, they found.
I think that 17% is a bit short even figuring in this twist:
Strategic defaulters have all the incentives to disguise themselves as people who cannot afford to pay and so they will appear as non strategic defaulters in all the data.
A friend that "owned" 2 homes, walked away from being upside-down on one of them to the tune of $350k, and his tax exposure on the loss is around $30k, and that's it.
Whomever owned his mortgage took the loss on the remaining $320k...
Why the hell wouldn't you walk away in a non-recourse state?
Bankruptcy had an awful stigma when I was growing up in the 60's, but it's more of a badge of honor nowadays.
I still think this is the most important part of the Petruno article, so I'm repeating it:
sportsfan (profile) wrote on Sat, 6/27/2009 - 11:09 am
In the residential foreclosure world, as discussed here frequently, there's been an ongong conversation on the number of homeowners who are walking away versus the number being forced out of their homes. The following came from a column in the L.A. Times this morning that broached an idea I think is DOA, namely forgiveness of principal.
How many homeowners in that situation would walk away? A new study by a team of researchers including Luigi Zingales, a University of Chicago finance professor, estimated that 26% of current mortgage defaults are "strategic" -- meaning homeowners chose to default even though they could afford their loans.
Adding: I don't know whether the cited research is accurate or not, but 26% is a huge number either way and will likely cause more people to find a strategic default socially acceptable.
Now, having just returned from a road trip, I've got to get some actual work done today. Y'all have a good one.
re: jas--he was a created avatar, as is the Duke of Con, who I suspect is the same person
Duke posted a youtube with his picture the other night, volker. Definitely not Jas. The lack of repetitive verbal abuse should have been a dead giveaway.
My coastal community is still drinking Kool-Aid, but it's getting watered down. Banks are starting to list their REOs within days after taking them back. Median price in my city reportedly up zero-point-something YOY while all the surrounding cities saw double-digit declines. It's going to catch up with us sooner or later.
People wouldn't be walking away if they still had to pay taxes on the loan amount that got written off.....if it weren't for those meddling congressmen.
Any stats on what percentage of homeowners would still have positive equity ( I realize it is a moving target) or percentage of people who own their homes outright?
Business cycles,
Old busted banks,
With busted depositors
Out in the rain.
Somebody must
Have an orphanage for
All these banks that nobody
Wants any more
September's FDR bank holiday
It's time to be saying good-bye.
Summers has done it,
Our dough’s down the drain.
Like old bizz cycles
Out in the rain.
Business cycles,
Don't tell my folks;
There's all those playing cards
Pinned to the spokes,
Laid down like skeletons
Out on the lawn.
The wheels won't turn
When the other has gone.
The seasons can turn on a dime,
Somehow I forget every time;
For all the things that you've stolen me
The zombie banks always stay
Broken, but they'll never throw them away
cr writes: "So the researchers conducted a survey to attempt to quantify the percent of strategic defaults."
Also true:
They did an autopsy on MJ and learned he was still dead.
It's almost also like they decided to administer tests for cognitive dissonance to drag race fans, not the ones who just watch on TeeVee, the ones who go to the track with seats right next to the Christmas tree. For days afterward they walk around saying stuff like, 'What?', 'Speak up!' and conduct all their verbal attempts at excessive decibel levels.
Juvenal Delinquent, the tax consequences change if the "homeowner" had taken equity out of the house. There is a huge difference between someone who bought a house with a $500K mortgage and walks away when the value falls to $300K, and another homeowner who bought for $300K - pulled $200K using the Home ATM- (same size mortgage) and walks away when the value drops to $300K.
I suggest anyone in this position should consult a tax attorney, but especially those that pulled equity out of their homes
JD- Whomever owned his mortgage took the loss on the remaining $320k...
Probably an overseas pension fund or perhaps a school district in Norway...
They got a Triple "A" reaming courtesy of Americans who outright lied to them.
I think that might leave a slight feeling of resentment.
If a business associate lies and steals from you; are you going to do business with them again?
Or might you be looking for a little revenge?
Feckless: I'm not a viking either. In fact, I could be whatever you wish me to be, except gone for good. Get real, folk, this is all a one dimensional reality. Color me what you want. He is.
If walking away from your mortgage is socially acceptable, then I think walking away from your credit card debt also will become very socially acceptable (hey, if you're credit is trashed due to your mortgage, what's the loss of futher junking it? ... or if a lot of people's credit will be trashed due to foreclosures... then there will be alternatives for you in the future). Since credit card debt is unsecured, this should be of even greater concern to American banks.
Good point, volker. We are all created characters here. The disconnect between the characters of Jas and Duke are too great for me to accept they could be one person. Even one multiple-personality person.
Agree with you iceman--
Can't wait to see the walk away default percentage on credit cards now that the bankster wizzards have raised interest rates . Credit card debt is even easier to default on--No future utliity value on the payments, unlike a house. Who in their right mind would spend years trying to pay off an unsecured debt at 30% interest ?
As you might imagine, it's difficult to extract money from people that have spent it all already, with no real prospects of ever earning enough to pay the taxman, rinse and repeat all over the country, California much more so than the 49 other states.
The same person that walked away owes $25k on his amex (they've offered to settle for much less, but what does my friend have to lose, his credit is shot to hell already) so, essentially he's an Untouchable.
Come on Americans, your culture is at least 230 years old. Way older than most European nations have been independent. You are Michael Jackson with heart attack, pretending be young forever. Even France has whatever 7th Republic already. Maybe it is time to grow up? Really grow up, instead of this childish Temple of Mammon "who got most toys" crap?
Even Romans with all their greediness created something, became something better but Americans...gatorade bottle in 2540 in a grave? Come on.
You really wanna continue this "who got most toys"-crap forever?
Back in December 2007 after having our condo in MD on the market for five months I thought of this possibility of walking away but only in a sarcastic way. I had posted this before but it was in a late-night thread so here is my tongue-in-cheek email to my agents (one of whom, Bob, is a very good friend) where I make my case for doing just that but it was only gallows humor. Anyone I mentioned it to at the time had never heard of anyone doing such a thing. Evidently my email was forwarded throughout the agency and got a lot of laughs.
From: Slick Dog
To: Bob xxxxx, Mary xxxxx
Date: Mon, Dec 3, 2007 at 10:21 AM
Subject: Alternatives—Your Thoughts?
Dear Bob and Mary—
I'd like to get both of your thoughts on some different approaches I've been thinking about.
Option 1: Stay the Course
Stay the Course would basically mean to continue to gradually reduce the asking price and be patient. We really just want to move on with our lives and get down to Tampa and have done everything we needed to do to get our lives back on track post law suit and post car accident which makes this a very tedious approach. We've had our bags packed for months. It's like we've just driven the football 90 yards down the field, have it first and goal but just can't punch it through.
Option 2 Cut and Run
Under the Cut and Run scenario we'd drop the price to $274,900 or $279,900 and keep are fingers crossed that there's at least one person out there that realizes that is actually a very cool place, walking distance to everything....not to mention a bargain at that price. You could boast that 20 months ago this same sized unit on the 7th floor (No 706 immediately above us) sold for $335,000 (you'd need to confirm this but that's what I think the owner told me a couple weeks ago) making our unit 20% cheaper. And this doesn't include the fact that we have a spectacular 500 sq ft terrace overlooking looking bustling, groovy and all around happening Rockville Town Square (a.k.a., Rock Vegas). Hopefully they'll be at least one person in Montgomery County with enough brains to break away from the herd and realize that there are some great fixed rate mortgages out there right now and if they've managed to pay their cable bill and hold down a job for a year or so the bank will approve their mortgage application.
My only concern here is that it still won't sell. Based on the limited research I've done (as a lawyer I truly appreciate the way you real estate agents have circled the wagon trains around all the key real estate data...nice job) it doesn't seem like ANYTHING has closed in this zip code for months, regardless of price. If that's the case then we may need to consider Options 3 and 4 below.
Option 3 Drink and Demolish
I've really regretted not scrounging up a couple extra grand to knock down a wall or two. Would've opened the place up a lot and could have been just enough to pull in an offer. But it wasn't to be and now that we've laid down new carpet and painted the place the only economical way to remedy this is some old fashioned, hands-on DIY. The Drink and Demolish option involves me, Bob, a bottle of Jack Daniels and a sledgehammer.
Option 4 Scorched Earth
Under the Scorched Earth option we'd simply stop paying our mortgage, home equity loan, condo fees and then turn off the phone. Over the course of the ensuring three or four months that it will take to complete the foreclosure process we'd pocket all that cash and use it for first and last months rent on a place in sunny Tampa. Would be kind of fun to sit back, let nature take its course and watch the mortgage company, home equity loan, condo association and tax collector people duke out. This would also avoid the need to pay commissions to real estate agents. This in turn would give us just enough of a cushion for us to be safe from the doomsday scenario which is that by the time we finally sell the place we find ourselves upside down on the notes.
Think about it. What's the worst that could happen? My credit gets destroyed. So what? My credit is already pathetic. We've been through much, much worse in life and “this too will pass.” Plus the quicker we get this albatross off our necks and head down to sunny Florida the quicker the credit healing process can begin. It'll only take a couple of years and based on our current state of mind I really don't we’ll be itching to be home owners again anytime soon.
Of all the options Scorched Earth is my hands down favorite. The sheer bravado of pursuing an out-of-the-box strategy like has this has some type romantic aura that to me is almost irresistible. Though I’m not sure how the in-laws would view it and that could become problematic. Details, details.
Let me know what you think.
Regards,
Slick Dog
We ended up going with Option 2 and got an offer about 5 weeks later. Never made it to Florida though, we changed our minds and decided to stay in the DC area.
On walking away, how do people survive the hit to their credit score? Unless you're independently wealthy, a bad credit score closes a lot of doors in your life.
The second thought is that ruthless default may be yesterday's news. Today's news is unemployment/underemployment. New ball game.
The lost equity is just being transferred from the individual to the future taxpayer.
Unless the BK code allows cramdown. In that case, the lost equity is absorbed by the creditor, who then lobbies the government to backstop it at a later date.
On walking away, how do people survive the hit to their credit score?
Blame it on medical expenses.
My company had not had a bk in three years when bang we got two last week. Would have to say both were cc related.
Called the state agency that regulates us and duh they knew nothing on the new bk laws that now regulate us, recommedned I call the bk court for their direction.
Instead I researched the 500 page law and it's all upside down and crossways and only left me with a fried brain with nothing of substance i could use.
What I see is a bk court so backed up it will take years to finanlize a bk of defaults of 25k. What a frigged up system that will leave very few business's standing.
we need to take our guidance from the Big Blue Book of AA, Half measures are not enough. Only a through and rigorous process will succeed.
This bullshit about debt reduction talked about in the article posted is a half measure. Oh, sure, they'll try half measures, then they'll slip and get drunk on debt again.
What you are seeing unfold is the process of getting to the inescapable end--jubilee.
And, you heard it from me first. So there.
BTW: I would bet none here could discover my alternate avatar. There's some gifted folk lurking in and out of this place.
"Then you will see the rise of the men of the double standard--the men who live by force, yet count on those who live by trade to create the value of their looted money--the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law--men who use force to seize the wealth of disarmed victims--then money becomes its creators' avenger. Such looters believe it safe to rob defenseless men, once they've passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.
The almighty FICO score has hastened the credit crisis. By protecting all credit with being dinged by a late payment or non payment you have created a system where universal default takes on a different meaning for the debtor.
The thought process of "screw it my credit is ruined" leads to complete default after running up the credit cards and buying what you can before you get off the gravy train of having a good credit score.
Add in the banks and CC implementing policies of denying loans and capriciously jacking interest rates and fees and fuel is added to the default fire. It will be interesting to see the cycle of fully collateralized loans and only lending to people who don't need the loans return. The old is new paradigm.
I really think credit ratings are, well, over-rated. Their such a boogieman but when the #%& hits the fan who cares. After leaving a small consultancy for another company my partner sued me. The suit was frivolous he knew it and I knew it (non-compete issues even though I had, in writing, specifically refused to sign a non-compete agreement 5 years earlier). If I had lost or settled it could have been a career killer. The litigation dragged on for almost a year before the judge through it out. It was incredibly expensive and almost ruined us financially, my wife and myt credit was in complete tatters believe me. I started monitoring my credit reports via one of those services and I watched as month-by-month both our scores improved. After a little over a year we were even able to get a credit card (big whoop) and frankly the issue just doesn't come up that much.
One theme that I hear a lot is that as long as your current on existing payments on cards, etc. it's not a show-stopper to get a car loan, rent an apartment, etc. I know my wife got denied a $300 dollar overdraft protection at her bank. Big whoop.
Am I missing something but other than buying a house what impact does the credit rating have? Maybe starting a small business I guess. Sorry for rambling my point is that I've just never seen a bad credit history lead to some apocalyptic scenario in anyone that I know.
Ultimately, with all the thieveries going on, it looks like the unprepared baby boomers will be hurt the most. When the US government selectively defaults on its debt, the 51 trillion Social Security/Medicare obligation will surely be the first to go. After all, what will the older generation do? protest? go on strike? They're doomed to frail away in their lazy-boy. The question is, would we as a nation, decry against this? or would the younger generation simply scoff? (the baby boomer generation, which partied the most, now has to pay the price). Of course, the undeserved portion being the baby boomers who worked hard, saved for a rainy day, and now has to live in turmoil.
"Try looking into that place where you dare not look. You'll find me there, staring out at you."
Welcome, welcome all. Late 2006, early 2007 I tried pushing the idea on CR that this time was different wrt ruthless default. I was so pummeled with information from "last time" I was forced to hold back my opinion. Again, welcome.
the 51 trillion Social Security/Medicare obligation will surely be the first to go.
you need another toke of hopium...
I think that many, many people don't give a rat's ass about anyone other that themselves; so I'll say that few will care.
Unless, of course, it is there benefits being removed.
Well then, that's a whole other ballgame indeed.
@ Dawg
Welcome, my son.
Welcome.
To the Machine...
There's an awful lot of *** back-stroking going on today. He was always good about dredging up something he had written 3 years ago, and complimenting himself about his foresight.
I know, its weird. I had also sent it to some of my friends who got a kick out of it and one of them called me howling with laughter. Who would ever actually do such a thing. And now just 18 months later here we are and its a way of life. We ended up dropping 40K off the asking price, which seemed insaned at the time but within a week we got six offers and a couple had escalation clauses that brought it back up.
I agree; we'll most likely see a society divided by age. A society where MSM will choose to serve its bias to the younger generation (they have the money), and relegate the older generation in obscurity. After all, what can the older generation do?
girlbear: Any stats on what percentage of homeowners would still have positive equity ( I realize it is a moving target) or percentage of people who own their homes outright?
About 20% own outright, 30% rent, and 50% have a mortgage of some kind. Mortgages are heavily loaded towards low equity, and were even before prices started to drop. CR has posted some articles in years past discussing the equity distribution.
About 17% of households would default — even if they could pay the mortgage — when the equity shortfall hits 50% of the house’s value, they found.
I'm actually stunned that it's this low. I know a lot of people who would view the value drop as proof that they got suckered into a bad deal, and look for reasons to break it.
"Ultimately, with all the thieveries going on, it looks like the unprepared baby boomers will be hurt the most. "
It is all relative. The most fucked up generation in modern history would be those born in 1880-1890 in western world. French, Brits, Americans and Germans basically sat in muddy ditches for years during WWI. Millions of men killed for absolutely nothing, for few miles at best. They are still finding and digging unexploded artillery ammunitions in Belgium today. Funny thing is that they do not even call a bomb squad, they just toss it over to the nearest ditch and call the police for pickup.
I remember playing this game, Pass the Pigs, when I was younger.
Fun.
"Makin' Bacon" fairly well describes our position, I'd say... Pass the Pigs | Image | BoardGameGeek
Watching a financial advisor being interviewed on Fox re the five banks being siezed yesterday. He said "Well, its really a good news, bad news type of thing."
i prefer the term "efficient breach" as an homage to the Chicago School.
Oooooh...I so wanna squirrel that one away for future use...very nicely put! I can hear that in Greenspan's smarmy psuedo-academic intoning even now....
When I bought my house last month, my bid was $110k below their initial asking price(this year) and $50k below their revised ask(they cut the day I submitted.)
Not even a counter, closed in 10 days. Probably because if they waited for a better offer, in 6 months it'd be $50k below my bid.
A friend in Federal law-enforcement went to FLETC (Federal Law Enforcement Training Center), to have a chip inserted, and he told me the tv monitors in the dining hall there were on Fox news 24/7, in the borg.
Do employers regularly look to see if an applicant and/or employee has declared bankruptcy or has bad credit? Do they have to disclose that they are running a credit check to the applicant?
In as short as 3 years, your credit score starts to recover. 5 years out and you can be close to the top again. If one were to default on their credit card, auto loan, house payment, the key is to setup yourself up before defaulting (i.e. buy or rent a place that's much less expensive, buy another car that's much less expensive and will last 5+ years, and max out the credit car buying stuff that you might need in the next few years ...). Just saying....
No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt—
(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;
(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or
(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.
Of course, proving discrimination is nearly impossible, and you can still discriminate based on credit history.
I think it is even getting too late even for cram downs.
There was a time when lenders could have told borrowers, ok, let's split the
difference, and I'll even lower the rate by 1%, and the borrowers would have
been all happy and greatful, and might have paid for a very long time, maybe
forever. Them times are gone. My clients are even starting to think ahead--
well, so what if they cram it down 25% and I'm "only" 25% underwater, and
my payment is sorta reasonable. What if the value drops even more? Are
they gonna reduce it again? Well, if they don't, I will walk.
Or a simple, why bother?
And I'm happy to see that Tanta was with me on the deficiency judgment thing.
Ah yes. Universal healthcare. That stuff that we've been trying for 18+ years. If only our behemoth insurance/medicine industry and the younger generation will agree to it.....
I've hired over a hundred people for my businesses. Very rare for me to run a credit report in helping to decide whether to make a hire. What businesses actually make it a standard part of the hiring policy?
Government? Finance and law enforcement positions.
Banking? All Positions.
Large companies with HR departments? Unsure.
Old people vote. That is their power. They also own assets with the implied power that represents.
Listened to an analyst regarding the BDI having an increase. He made the point that the ship owners have colluded on a price regardless of demand. Makes sense now that the smaller players have been BK'd and the larger providers have mothballed ships.
Morality of credit. I always chuckle when I read the comments of the people who believe it is a sacred duty to pay back debt. The examples otherwise seem to show how that has turned out.
It is illegal for employers to check credit scores unless creditworthiness is germaine to the job function. As Tanta noted a while back, a lot of places just file them because the job pool for the wage they want to pay isn't good enough to weed people out for poor credit scores.
In regards to upside down mortgages, I have always said whether the default is ruthless is more a matter of timing. If you are carrying 100% or 110% on you mortgage you simply can't or won't put the $10,000 into the house every few years that is needed to maintain its value. Eventually, even if you play by the rules, you'll hit a roof replacement or the like that you simply can't afford, and with no equity you will default. For whatever reason, most likely the short term value in housing most have focused on for the past decade, people have forgotten that home ownership if a very expensive proposition. If paying down the mortgage were the only carrying cost, you would have the luxury of considering it just a matter of personal character. Personally, I think people should ruthlessly default and get it over with.
Big Dimon Balls.
CHICAGO (Reuters) - Too many regulators will only increase costs and reduce credit opportunities for consumers, JPMorgan Chase & Co Chief Executive Jamie Dimon warned in a column he wrote in Saturday's Wall Street Journal.
"Company leadership must foster a culture within their institutions that focuses on integrity, strong execution, quality products, long-term value creation and doing the right thing," he wrote.
"Golden parachutes, special contracts, and unreasonable perks must disappear."
The walk away is very tempting. If I had an excuse, I probably would, but at this moment I can afford the payment and could not show any adverse change in income or medical expense. I guess I'll continue to be the greater fool unless some opportunity arises.
My brother in his 50's is living with mom, and so are a bunch of other 50 year old sons living with mom all over the neighborhood. Daughters as well, but sons predominate, according to mom.
If there's an ethics component to the job - public trust, fiduciary duty, client confidentiality, trade secrets, legal non-disclosure, homeland security, etc. - you can expect credit history to be relevant to the hiring process. The ability to manage money and one's decisions about personal obligations are a fair predictor of job performance and reliability.
The almighty FICO score has hastened the credit crisis. By protecting all credit with being dinged by a late payment or non payment you have created a system where universal default takes on a different meaning for the debtor.
ISTR that Tanta laid a lot of blame on the over-reliance on FICO as a means of underwriting borrowers. I suspect that it's over-use and creep into other areas - determining insurance rates, hiring, etc., will eventually run into legislative blocks. It's a little abusive.
On cramdowns, etc, and bailouts: there is really no difference in the end result - if we let the long-term, well-established mechanisms hold, eventually REOs flood the market and the banks take the losses - it falls on the creditors - who then get bailed out. All you effectively control is how much borrowers are "punished" - a policy goal of questionable value that nevertheless seems of paramount importance in all things to some folks. I have to ask: what overall societal goal does punishment, in and of itself, serve? Everyone involved at a societal level - banksters, debt whores and the virtuous prudent savers, ultimately benefit far more from cramdowns or "principal forgiveness" than we benefit from punishment.
@Dawg - hehe on Pigs. That's just in Capesize though. Not quite the same in Panamax.
Had a fairly crisp argument with a normally respected trade economist couple of weeks ago, as he blithely claimed that BDI showed that primary inputs and forward orders plus China numbers equalled unrivalled green shootery. I suggested alternative points of view.
When I was car sales, the story was you needed two of three: income, credit score, or loan-to-value (often stated as downpayment). I would speculate most consumer borrowing is the same.
"Old people vote. That is their power. They also own assets with the implied power that represents"
You see why the government has to inflate the debts away? An outright cancellation of the social security/medicare program will enrage the seniors, and they do have a huge voting block. However, if it's secretive default (massive inflation), nothing the seniors can do about it.....can't vote the inflation away. Or can they?
I am amazed at the number of adults glued all day to local library computers. Where I live, there are probably 4 computers/household. We have 5. I wonder what they are doing all day. Maybe hanging out on CR.
Experiences are what shape us into what we'll be, and a 40 year old woman has had twice as long to experience life, as opposed to the traditional 1st time mother being in her early 20's.
Never theless I enjoyed my 2nd child at nearly 35 more than the first at
23.
Really, the genetic engineers should do something to make puberty at least
5 years later for both men and women. We'd live longer and be healthier
longer, and be old enough to actually be a bit wise for the kids.
I would suggest that your body had 12 years to recover from your first birth, so that #2 had a healthier pre-birth experience.
It's just always been my thesis that the womb is healthiest for the 1st born, and gets less & less healthy thereafter, because childbearing takes a tremendous toll on the body.
But it's just a thesis. Someday when I'm a gifted scientist, that will be my research project. Until then, I still can't swallow that babies born to older mothers are smarter - just goes against what I've experienced.
Okay, so sorry for the OT - it is Sat. afternoon afterall...
If there's an ethics component to the job - public trust, fiduciary duty, client confidentiality, trade secrets, legal non-disclosure, homeland security, etc. - you can expect credit history to be relevant to the hiring process.
Amusing Comment Of the Outsourced Day.
Relevant only to the hiring process of AMERICANS, buddy.
Citizen AllenM (profile) wrote on Sat, 6/27/2009 - 1:14 pm
Rob D- remember how mad Tanta got at us when we pushed the ruthless default?
That was the last of the old guard in the mortgage industry expressing their distaste for the new reality.
I do and i remember how frustrating it was to try and explain newthink in terms of oldthink. Then there was all the time in between then and now when several posters kept bring up my advocacy of ruthless default like it was a sin and it was a greater sin to be encouraging it. Funny thing is if many of the people now inexorably headed to workout/mod/cramdown/default had done as I suggested the banks would be facing a much smaller and far more identifiable problem.
When I was 14, I had a crush on my 35-ish Social Studies teacher, and I know he was interested. Thank god, he wasn't a creep or we could have ended up a statistic. Biology just doesn't listen to reason.
As you can see, the genetic starting point is quite important, but the nurture component is actually highly important in the expression of the genetic potential.
Children of older parents are often much more stimulated (as I see frequently in watching under 10 sports like just two hours ago), and the parents are far more attentive.
As with most things, outliers do occur.
As for the relative iq of children, well that is literally a lottery for the starting potential- followed by a very interesting development cycle that can enhance or hinder realization.
Older versus younger wrt age of mother would only matter with mutation or deficient resources for the child due to parental diet or health.
I am aware of a situation where a younger (in their middle 20s) vegan couple has essentially retarded their children through malnutrition and exhaustion during pregnancy- but that case was extreme in that it resulted in the death of one of the children and jail for the parents due to neglect. The remaining children are recovering, but will they ever be as good as their potential at conception? Most likely not.
AllenM - if we're thinking of the same case, they weren't just vegan, they were raw foodists. I didn't follow the case to conclusion, but I do know that society often persecutes what it doesn't understand. A raw food diet, in and of itself, doesn't have to result in malnutrition, even in children.
Well, now the banks are finally beginning to play ball with modifications.
Right now we fit the model of ruthless default, and it has been a topic of discussion.
Except for that inevitable bout of inflation in our future, I would have been outta here a year ago.
That is the only result that would validate this house purchase- right now- with a gentle two to three years of stability, it is a close call whether to maintain the inflation outlook and pay through the belly of the bottom (of course screaming like a banshee for a mod, mind you) and then screw the lender on the back of the 30 as inflation rips.
Further, I think CS' example just about stroked Tanta out- that was definitely the new new.
But you've heard that the first-born is usually the most successful in life. Do I have to look up the wiki about that? No please, don't make me. First borns do seem to outshine their younger siblings, and that does not go with your thesis (or whoever's) that the older the parent, the more attentive, therefore the more stimulating for the child. In fact, in my own case I have found that the older I've gotten, the more tired I am, and probably have less to give the subsequent children after the firstborn.
Maybe we can corroborate and find funding for our research. In this down economy, spending a couple years doing a grant-funded research project may not be a bad idea. And it certainly would be interesting.
Feckless, they were hardcore raw foodists without any real understanding of wtf they were doing. I blame the rest of their family for taking so long to push the issue that a child died. I have no quarrel with a careful application of faddish diets- but forcing children to eat a barely survivable diet for adults was beyond stupid- especially when the mother was so starved she could not even produce sufficient milk.
They further took action to avoid and evade care for the children.
It was criminally stupid. Now those damaged children will cost the taxpayers for decades.
That truly was insanity by society- and by all who knew the extent of the foolishness and did nothing.
I'm a middle child (out of five), the prettiest, by far the smartest and possessed of the strongest moral ethic. Maybe it's because my mother (who had five in seven years) was 24 when I was born. Something about that mid-twenty age.
That's okay, feckless. I'll include the variables for older first-time parents as well as older parents of multiples. My thesis remains the same - the younger the mother, the better the prospects for the child.
Can I participate too? First-born, Mother=24. Obviously the intelligence went elsewhere. I could be an outlier. That's where I usually am anyway. No checks or MBS for payment though.
Try this thesis - the more nurturing and attentive the relationship between parent/parents and child, the better the prospects for the child. Later in life, first-timers may have more time to appreciate parenthood, just as young new parents are more likely to appreciate and be attentive to their firstborn. It's a new and amazing experience.
Ask any parent to show you the baby pictures for their first and subsequent children. First kid - tons. Second kid - not so much. The newness has worn off. The parents have been there, done that.
Reading the research together seems to point to smaller families producing significantly better outcomes in children- which argues resources (both in utero and in subsequent development) rather than birth order.
I note that only children seem to have a distinct advantage in lack of competition for parental attention.
In my own case, that lack of siblings for my child means the expense of private education from preK is much easier to maintain.
Now that kind of lack of competition for resources has tremendous long run consequences- right?
"...the more nurturing and attentive the relationship between parent/parents and child, the better the prospects for the child."
I would posit that the Spartan model serves society better. All the used hay fed us about 'for the children' is just that. Screw the children. Get tough or die.
Um, with a little effort searching comments you would know I am comfortably heading into middle age, but still resisting the thought of arriving there.
I can't be that old, can I if I have a 7.66 y.o. son- right?
Just wait until you get there, you young'uns.
There was nothing so bracing as growing up and signing up for the draft (Selective Service is such a tame way to say it) when Ronald Reagan was president and invading small countries.
Gah, I have been on the other side of those crushes- they are soooo touchy to deal with.
It is the hardest thing to be in your twenties teaching college classes with a strict hands off policy.
Now as an old man it would be fairly easy. Although one of the professors I did research for Simon H was on his third wife- two of them had been graduate students- I though he was a nut to have two more kids at 58- retirement was gonna be 80 for him.
Carter had the fiasco in Iran when several members of the raid were left charred on the desert floor after he botched the operation due to his unilateral disarmament.
Ford has the Mayaquez which cannot necessarily be counted but did preside over the fall of Saigon.
.....and to think I purchased a 386-clone to "get to this" 20-years later.
Well, at least I'm not drinking, smoking, and "hot-chatting all the cyber-babes" now. Things sure have "progressed" a bunch since the Windows 3.1 days......home-grown vegetables vs. home-grown smoke, homemade frozen ice cream vs. homemade frozen daiquiris, kids 15 to "a gleam" vs. 35 to 16 years old, we were messing around in the Middle East then vs. still messing around there now
............things change, things stay the same..............and somethings keep degrading.
"after he botched the operation due to his unilateral disarmament."
Not quite. The sikorsky helicopter engines failed after they ran into an haboob ( a desert sandstorm with especially fine-particled sand). They had removed the engine filters to enable the helos to make the distance required...the filters reduced fuel mileage.
The social contract can be argued as a debt with which there is a payment system of fees and taxes. Local, state, and federal government are starting to walk away from the debt it owes to the governed which starts a cycle of more taxpayers seeing taxes as an unproductive outlay.
When does the number of walk aways lead to the government walking away from its debt?
It does not matter whether women in the west decide to now have kids at 15 or 40. Between demography, technological diffusion and other changes.. their model of the world is over. They just don't know it yet...
I was on duty when it happened. The US military didn't have the resources to conduct a raid on a girl scout camp thanks to Carter.
Volker, the operation went to hell after the helicopter crashed, then other aircraft got damaged. It had a good chance to succeed if they did not hit that storm, or at least that is what I have heard from people who where there.
That fiasco resulted in the expansion and real formation of the Delta team and much more integrated joint operations and training.
But you are right, at the time the Military was in horrible shape and it took massive overspending to get it in shape. Now they are being worn to the bone again.
Kauai: I'd be surprised if you have spoken to anyone who was there, they may have said they were there, they may have alluded to being there, but it was a very small operation. Take your inputs with a generous serving of salt.
fried: the areas of common agreement are greater than any possible disagreement between you and I.
"But you are right, at the time the Military was in horrible shape and it took massive overspending to get it in shape. Now they are being worn to the bone again."
LOL!!! Yeah, that's what the Soviets said, too.
We gotta militarize. Them bad Amis will invade us.
Kauai: I'd be surprised if you have spoken to anyone who was there, they may have said they were there, they may have alluded to being there, but it was a very small operation. Take your inputs with a generous serving of salt.
I believe them because they had the scars to prove it and I also saw their service records. Back when I was young, dumb and in shape. Amazing people.
I have a hard time when people talk sh*t about that, and also the "blackhawk down" raid that went bad. Sometimes bad things happen and the stuff piles up deep and you just have to slug your way through it.
"...The research is based on homeowner surveys, which also considered moral and social factors involved. People who said it was immoral to default were 77% less likely to declare their intention to do so, the authors write, while those who know someone who defaulted were 82% more likely to say they would default themselves..."
So...this "research" isn't based on what homeowners actually did, but what they said they might do when asked in a survey? Not exactly what I'd call hard data.
And ruthless default on the part of people who can afford the payment isn't rational behavior at all, it's "panic" behavior, the irrational fear that prices are going to continue down indefinitely and conditions will never improve. If you can make the payments, need a place to live, and have no reason to move, the rational thing to do to "regain" some or all of your lost equity is to just sit tight.
I've been upside-down on two of the houses I've owned, one of them for several years. I either broke even or minimized my losses by riding out the bad times and waiting for better conditions.
they were given a mission improbable that relied on everything working perfectly.
Ours is not to wonder why, ours is but to do or die.
The Intel was plain wrong about the weather, and once it went bad it went very bad. I don't think Carter had all the information, and he trusted the wrong people.
As far as I'm concerned the only 'real' home equity is the monies you've paid.
And sometimes not even that.
Of course a black swan could crap on my idea.
why did we not have many major conflicts since ww2? Winnability?
So which of the minor ones and the few major ones did we loose?
Now granted Korea was a push, and Vietnam was a mess, with the friends we had there who needed enemies.
The real problem is we have attempted to be the policeman of the world, and people are getting tired of it.
Lucifer, the west has not won a real war since WWII because we have not had a total war of annihilation since then.
Even Korea, when it threatened to spin out of control was still just a sideshow to a cleanup after WWII.
Nobody wanted to fight a total war against America again- we proved that there is a threshold at which we will use almost any means necessary to win.
One of the problems is that in a multipolar world, there are too many overlapping spheres of influence, but with the history so raw and new, nobody was willing to put down the massive sacrifice to extend real influence beyond the natural national borders.
Both world wars had European powers attempting to do just that, in large scale. The result was between 70 and 90 million dead.
The next world war will have casualties in the billions.
Guaranteed.
These little post colonial police actions like Iraq and Afghanistan are just that- piffle in terms of resources and manpower. Sucks to be the folks who have to go out and die, just like it did in Kipling's day on the Northwest Frontier.
Same results, same stupidity, but not real western style warfare, unless you count what Custer did after the Civil War as warfare- which I don't.
Did any of England's colonial messes end up doing in the Empire? Nope it was the World Wars.
What would the casualties be if India decided to conquer Pakistan- not just beat but conquer?
That is total war, as has been waged before in Asia, and will be again.
Same goes for North Korea today- if the Chinese ever decided the have no use for that idiot in charge, they might find a way to get rid of him, meanwhile it keeps millions of Koreans either occupied or preoccupied with a moronic dictator with small nukes.
HomeGnome -
As far as I'm concerned the only 'real' home equity is the monies you've paid.
And sometimes not even that.
While I do count the money I put into my place as part of my net worth, I don't consider it equity. I need some place to sleep and store my junk.
I do not consider it to be something I can borrow against. Maybe I'm just one of those old school guys who will eventually loose even more.
I wasn't suggesting taking a cash advance against the house, Kahuna.
Besides, all that brewing equipment takes up a lot of space.
Esp, if you're an all grain brewer like myself
I just want to pay my home off as quickly as possible.
Even if you add just 50 or 100 bucks a month, you will pay
your mtg down much faster.
Our first Fla house, they would give us only a 25 year mtg, 'cause
they said the house was only rated to last another 25 years, so
we paid it off slightly faster. The new owners got a 30 year mtg when
we sold 9 years later, in 81, and it's still very much there.
Then, here, we again got a 25 year mtg, and whenever we got a
windfall or the hub got a bonus, paid down the mtg. It's was paid
off a year and a half ago.
There is hardly any difference in payment between a 25 and 30
year mtg. And only a little more with a 20 year mortgage.
The 15 has a significantly increased payment, but a lower
rate.
I can believe this research. In some areas, people have little choice but to walk away. I know people walking away; my mom is walking away. She's in suburban Detroit and lost her job like so many others in the auto industry. She tried to call the bank several times last year, well before she got fired, to work something out ahead of time. The bank told her it would not speak with her until after she defaulted. So she stopped making payments. Even then, it would not return her calls until after she missed the second payment. She now gets bi-weekly calls asking when she will make her payments. It will still not discuss any work outs or decrease in principal. It wouldn't even authorize a short sale until she missed her third payment. Her area is glutted with foreclosed homes marked down as far as you can imagine (25-50k range) but even they are not selling well. Her choice is/was easy. Should she continue making payments on a $100k+ mortgage with payments she cannot afford or walk away and start over elsewhere? The bank made the choice easy. It will soon have one more foreclosed home on its books.
I have a hard time believing the worst is over for the nation's banks. The bailouts are not working -- they are only propping up failing institutions, misallocating taxpayer resources, and delaying the inevitable. For what its worth, the Feds need to consider the model used in the Great Depression to keep people in homes, take over failed banks like Citi, BofA, etc, and stop the incessant bleeding.
It absolutely, ABSOLUTELY is fair and equitable for people to walk away from their mortgage if their house is underwater. This isn't the 1950s where "people kept their promises", etc. Banks have spent decades teaching us that they don't owe us anything, and what goes around comes around.
These days we need to treat our finances like a business, and act like businesses do. Don't they walk away from their obligations to us, if it's in their legal right to do so? Don't banks and credit card companies do whatever is legally available to them? Don't companies close down profitable factories simply because THEY AREN'T PROFITABLE ENOUGH?
We should do the same thing as well, if our home that we purchased isn't worth what we paid for it, and it looks like it will take decades to recoup, then we should walk away from it, just like a bank or other company would do.
Walking away from your mortgage holder may maybe classified as strategic ,but the question remains how much financial liability does the borrower still have to answer for.
The smartest way is to file Chapter 7 Bankruptcy. This gives the borrower a fresh start .
Whether you walk away or file bankruptcy do it logically and smart, not emotionally.
When dealing with a bank, the phrase for you, " is to do unto others before they do it to you.
And Ironically my former federally approved and regulated federally chartered thrift bank was cited in November 2008 for "Unsafe and Unsound Banking Practices. And they still operate today making mortgages loans with the approval of the Unites States Government.
It would appear then that the Congress and the Bankers have the same DNA.
Businesses make these decisions every day of the week. The body of Contract Law contain numerous legal principle, cases and statutes on formation, breach, and remedies all of which are designed to deal with cases when people walk away and or breach from their contracts. Assuming that the homeowner should be afforded the same benefits of walking away is nonsense. There is no reason why the homeowner to continue to be the sucker instead of acting like owning a home is just another business transaction.
Bankruptcy was designed as a protection for the economy and society at large. Now the law has become skewed in favor of the creditor.
There is a spectrum of how voluntary defaults are. If someone living in a non-recourse state has significant assets and chooses not to pay a mortgage, that’s clearly voluntary. But someone who took out a loan who payment was originally a third of his after-tax pay and is now over half of his takehome, that’s not that voluntary. Maybe he could keep making the payments if he put all his effort into it, but I wouldn’t call him defaulting voluntary.
Toothless Loans brought on Ruthless Defaults, who woulda ever figured?
And here I've been renting since coming back to the states in 2000 since I didn't want to buy into the teeth of a bubble.
Classic crowd behavior -- when enough people do it, you don't need to justify yourself -- because "everybody is doing it."
This shouldn't be a surprise. But of course it is, because nobody in the biz apparently wanted to see it.
i prefer the term "efficient breach" as an homage to the Chicago School.
"One of the greatest fears for lenders (and investors in mortgage backed securities) is that it will become socially acceptable for upside down middle class Americans to walk away from their homes."
When is socially acceptable for lenders to obtain obscene bonuses out of tax payer's bail outs what would they expect? What's good for the goose good for the gander wouldn't you say?
About 17% of households would default — even if they could pay the mortgage — when the equity shortfall hits 50% of the house’s value, they found.
I think that 17% is a bit short even figuring in this twist:
Strategic defaulters have all the incentives to disguise themselves as people who cannot afford to pay and so they will appear as non strategic defaulters in all the data.
A friend that "owned" 2 homes, walked away from being upside-down on one of them to the tune of $350k, and his tax exposure on the loss is around $30k, and that's it.
Whomever owned his mortgage took the loss on the remaining $320k...
Why the hell wouldn't you walk away in a non-recourse state?
Bankruptcy had an awful stigma when I was growing up in the 60's, but it's more of a badge of honor nowadays.
I still think this is the most important part of the Petruno article, so I'm repeating it:
sportsfan (profile) wrote on Sat, 6/27/2009 - 11:09 am
In the residential foreclosure world, as discussed here frequently, there's been an ongong conversation on the number of homeowners who are walking away versus the number being forced out of their homes. The following came from a column in the L.A. Times this morning that broached an idea I think is DOA, namely forgiveness of principal.
How many homeowners in that situation would walk away? A new study by a team of researchers including Luigi Zingales, a University of Chicago finance professor, estimated that 26% of current mortgage defaults are "strategic" -- meaning homeowners chose to default even though they could afford their loans.
Is it time for underwater homeowners to be given a get-out-of-debt-free card? - Los Angeles Times
Adding: I don't know whether the cited research is accurate or not, but 26% is a huge number either way and will likely cause more people to find a strategic default socially acceptable.
Now, having just returned from a road trip, I've got to get some actual work done today. Y'all have a good one.
This is John Galt Speaking - video
YouTube - "This is John Galt Speaking" #1
re: jas--he was a created avatar, as is the Duke of Con, who I suspect is the same person
Duke posted a youtube with his picture the other night, volker. Definitely not Jas. The lack of repetitive verbal abuse should have been a dead giveaway.
My coastal community is still drinking Kool-Aid, but it's getting watered down. Banks are starting to list their REOs within days after taking them back. Median price in my city reportedly up zero-point-something YOY while all the surrounding cities saw double-digit declines. It's going to catch up with us sooner or later.
People wouldn't be walking away if they still had to pay taxes on the loan amount that got written off.....if it weren't for those meddling congressmen.
Any stats on what percentage of homeowners would still have positive equity ( I realize it is a moving target) or percentage of people who own their homes outright?
Broken Bizzcycles
(with apologies to Tom Waits)
Business cycles,
Old busted banks,
With busted depositors
Out in the rain.
Somebody must
Have an orphanage for
All these banks that nobody
Wants any more
September's FDR bank holiday
It's time to be saying good-bye.
Summers has done it,
Our dough’s down the drain.
Like old bizz cycles
Out in the rain.
Business cycles,
Don't tell my folks;
There's all those playing cards
Pinned to the spokes,
Laid down like skeletons
Out on the lawn.
The wheels won't turn
When the other has gone.
The seasons can turn on a dime,
Somehow I forget every time;
For all the things that you've stolen me
The zombie banks always stay
Broken, but they'll never throw them away
YouTube - Tom Waits - Montreal Jazz Fest (7-3-1981) pt 4
cr writes: "So the researchers conducted a survey to attempt to quantify the percent of strategic defaults."
Also true:
They did an autopsy on MJ and learned he was still dead.
It's almost also like they decided to administer tests for cognitive dissonance to drag race fans, not the ones who just watch on TeeVee, the ones who go to the track with seats right next to the Christmas tree. For days afterward they walk around saying stuff like, 'What?', 'Speak up!' and conduct all their verbal attempts at excessive decibel levels.
Juvenal Delinquent, the tax consequences change if the "homeowner" had taken equity out of the house. There is a huge difference between someone who bought a house with a $500K mortgage and walks away when the value falls to $300K, and another homeowner who bought for $300K - pulled $200K using the Home ATM- (same size mortgage) and walks away when the value drops to $300K.
I suggest anyone in this position should consult a tax attorney, but especially those that pulled equity out of their homes
girlbear, 31.6% of homeowners have no mortgage.
Households with Mortgages: Approximately 20 Percent Equity
best to all
JD- Whomever owned his mortgage took the loss on the remaining $320k...
Probably an overseas pension fund or perhaps a school district in Norway...
They got a Triple "A" reaming courtesy of Americans who outright lied to them.
I think that might leave a slight feeling of resentment.
If a business associate lies and steals from you; are you going to do business with them again?
Or might you be looking for a little revenge?
Feckless: I'm not a viking either. In fact, I could be whatever you wish me to be, except gone for good. Get real, folk, this is all a one dimensional reality. Color me what you want. He is.
If walking away from your mortgage is socially acceptable, then I think walking away from your credit card debt also will become very socially acceptable (hey, if you're credit is trashed due to your mortgage, what's the loss of futher junking it? ... or if a lot of people's credit will be trashed due to foreclosures... then there will be alternatives for you in the future). Since credit card debt is unsecured, this should be of even greater concern to American banks.
Walking away?
1) Just do it!
2) Just beat it!
Good point, volker. We are all created characters here. The disconnect between the characters of Jas and Duke are too great for me to accept they could be one person. Even one multiple-personality person.
Since credit card debt is unsecured, this should be of even greater concern to American banks.
Why should they be concerned when the U.S. of A. will backstop all their losses? There are no consequences any more.
This what comes from a no fault everybody wins education. Can't do the money math but who cares it is all about everyone being a winner. LOL!
Agree with you iceman--
Can't wait to see the walk away default percentage on credit cards now that the bankster wizzards have raised interest rates . Credit card debt is even easier to default on--No future utliity value on the payments, unlike a house. Who in their right mind would spend years trying to pay off an unsecured debt at 30% interest ?
CR,
As you might imagine, it's difficult to extract money from people that have spent it all already, with no real prospects of ever earning enough to pay the taxman, rinse and repeat all over the country, California much more so than the 49 other states.
The same person that walked away owes $25k on his amex (they've offered to settle for much less, but what does my friend have to lose, his credit is shot to hell already) so, essentially he's an Untouchable.
This has led many people to suggest principle reductions (as opposed to payment modifications) is the only solution...
--CR
That's no real solution. The lost equity is just being transferred from the individual to the future taxpayer.
Come on Americans, your culture is at least 230 years old. Way older than most European nations have been independent. You are Michael Jackson with heart attack, pretending be young forever. Even France has whatever 7th Republic already. Maybe it is time to grow up? Really grow up, instead of this childish Temple of Mammon "who got most toys" crap?
Even Romans with all their greediness created something, became something better but Americans...gatorade bottle in 2540 in a grave? Come on.
You really wanna continue this "who got most toys"-crap forever?
Since credit card debt is unsecured, this should be of even greater concern to American banks.
It is unsecured but legally enforced
You can't walk away from your credit card debt - you have to run and hide (or file for bankruptcy)
Back in December 2007 after having our condo in MD on the market for five months I thought of this possibility of walking away but only in a sarcastic way. I had posted this before but it was in a late-night thread so here is my tongue-in-cheek email to my agents (one of whom, Bob, is a very good friend) where I make my case for doing just that but it was only gallows humor. Anyone I mentioned it to at the time had never heard of anyone doing such a thing. Evidently my email was forwarded throughout the agency and got a lot of laughs.
From: Slick Dog
To: Bob xxxxx, Mary xxxxx
Date: Mon, Dec 3, 2007 at 10:21 AM
Subject: Alternatives—Your Thoughts?
Dear Bob and Mary—
I'd like to get both of your thoughts on some different approaches I've been thinking about.
Option 1: Stay the Course
Stay the Course would basically mean to continue to gradually reduce the asking price and be patient. We really just want to move on with our lives and get down to Tampa and have done everything we needed to do to get our lives back on track post law suit and post car accident which makes this a very tedious approach. We've had our bags packed for months. It's like we've just driven the football 90 yards down the field, have it first and goal but just can't punch it through.
Option 2 Cut and Run
Under the Cut and Run scenario we'd drop the price to $274,900 or $279,900 and keep are fingers crossed that there's at least one person out there that realizes that is actually a very cool place, walking distance to everything....not to mention a bargain at that price. You could boast that 20 months ago this same sized unit on the 7th floor (No 706 immediately above us) sold for $335,000 (you'd need to confirm this but that's what I think the owner told me a couple weeks ago) making our unit 20% cheaper. And this doesn't include the fact that we have a spectacular 500 sq ft terrace overlooking looking bustling, groovy and all around happening Rockville Town Square (a.k.a., Rock Vegas). Hopefully they'll be at least one person in Montgomery County with enough brains to break away from the herd and realize that there are some great fixed rate mortgages out there right now and if they've managed to pay their cable bill and hold down a job for a year or so the bank will approve their mortgage application.
My only concern here is that it still won't sell. Based on the limited research I've done (as a lawyer I truly appreciate the way you real estate agents have circled the wagon trains around all the key real estate data...nice job) it doesn't seem like ANYTHING has closed in this zip code for months, regardless of price. If that's the case then we may need to consider Options 3 and 4 below.
Option 3 Drink and Demolish
I've really regretted not scrounging up a couple extra grand to knock down a wall or two. Would've opened the place up a lot and could have been just enough to pull in an offer. But it wasn't to be and now that we've laid down new carpet and painted the place the only economical way to remedy this is some old fashioned, hands-on DIY. The Drink and Demolish option involves me, Bob, a bottle of Jack Daniels and a sledgehammer.
Option 4 Scorched Earth
Under the Scorched Earth option we'd simply stop paying our mortgage, home equity loan, condo fees and then turn off the phone. Over the course of the ensuring three or four months that it will take to complete the foreclosure process we'd pocket all that cash and use it for first and last months rent on a place in sunny Tampa. Would be kind of fun to sit back, let nature take its course and watch the mortgage company, home equity loan, condo association and tax collector people duke out. This would also avoid the need to pay commissions to real estate agents. This in turn would give us just enough of a cushion for us to be safe from the doomsday scenario which is that by the time we finally sell the place we find ourselves upside down on the notes.
Think about it. What's the worst that could happen? My credit gets destroyed. So what? My credit is already pathetic. We've been through much, much worse in life and “this too will pass.” Plus the quicker we get this albatross off our necks and head down to sunny Florida the quicker the credit healing process can begin. It'll only take a couple of years and based on our current state of mind I really don't we’ll be itching to be home owners again anytime soon.
Of all the options Scorched Earth is my hands down favorite. The sheer bravado of pursuing an out-of-the-box strategy like has this has some type romantic aura that to me is almost irresistible. Though I’m not sure how the in-laws would view it and that could become problematic. Details, details.
Let me know what you think.
Regards,
Slick Dog
We ended up going with Option 2 and got an offer about 5 weeks later. Never made it to Florida though, we changed our minds and decided to stay in the DC area.
On walking away, how do people survive the hit to their credit score? Unless you're independently wealthy, a bad credit score closes a lot of doors in your life.
The second thought is that ruthless default may be yesterday's news. Today's news is unemployment/underemployment. New ball game.
maybe timmyone = jas, the duke i would have a much harder time believing
Wish I could piss away 25K and not sweat the repay.
Oh yeah, I have trait called honor.
Which is apparently in short supply here in America.
The lost equity is just being transferred from the individual to the future taxpayer.
Unless the BK code allows cramdown. In that case, the lost equity is absorbed by the creditor, who then lobbies the government to backstop it at a later date.
On walking away, how do people survive the hit to their credit score?
Blame it on medical expenses.
@ Basel
Ran into a friend who I hadn't seen in a few years.
She told me she bought at Riverside Canal...
She's young so I just bit my tounge.
No problemo, the fed is buying/backing all the toxic MBS abd the FHA has taken over the shoddy loan department. Nothing has changed.
My company had not had a bk in three years when bang we got two last week. Would have to say both were cc related.
Called the state agency that regulates us and duh they knew nothing on the new bk laws that now regulate us, recommedned I call the bk court for their direction.
Instead I researched the 500 page law and it's all upside down and crossways and only left me with a fried brain with nothing of substance i could use.
What I see is a bk court so backed up it will take years to finanlize a bk of defaults of 25k. What a frigged up system that will leave very few business's standing.
we need to take our guidance from the Big Blue Book of AA, Half measures are not enough. Only a through and rigorous process will succeed.
This bullshit about debt reduction talked about in the article posted is a half measure. Oh, sure, they'll try half measures, then they'll slip and get drunk on debt again.
What you are seeing unfold is the process of getting to the inescapable end--jubilee.
And, you heard it from me first. So there.
BTW: I would bet none here could discover my alternate avatar. There's some gifted folk lurking in and out of this place.
homegnome: which one is riverside canal?
MaryAnn: what type of company?
"On walking away, how do people survive the hit to their credit score?
Blame it on medical expenses."
as in--Living there made me sick.
Now, volker, you've just thrown down the gauntlet for members like Broward.
In that case, the lost equity is absorbed by the creditor, who then lobbies the government to backstop it at a later date.
--Basel 2
My point exactly.
Broward? He'll cheat.
@ Basel
My mistake.
CanalSide.
CanalSide Columbia - A Riverfront Community In Downtown Columbia, SC
The development at the old CCI prison.
What do you need an alternate avatar for?
Geez, it's the internet...
why do you need an avatar at all?
Has anyone ever seen volker and EHP online at the same time? Could be dual browser windows, of course, but still...
Maybe every one is CR...
Except for me.
Hey, what's in these brownies anyway?
"Then you will see the rise of the men of the double standard--the men who live by force, yet count on those who live by trade to create the value of their looted money--the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law--men who use force to seize the wealth of disarmed victims--then money becomes its creators' avenger. Such looters believe it safe to rob defenseless men, once they've passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.
Francisco D'Anconia
i'm kinda partial to the PUD on Rosewood... is that thing still 1/3 completed?
Slick Dog - you're a prophet. Wonder what they think of your letter now.
The almighty FICO score has hastened the credit crisis. By protecting all credit with being dinged by a late payment or non payment you have created a system where universal default takes on a different meaning for the debtor.
The thought process of "screw it my credit is ruined" leads to complete default after running up the credit cards and buying what you can before you get off the gravy train of having a good credit score.
Add in the banks and CC implementing policies of denying loans and capriciously jacking interest rates and fees and fuel is added to the default fire. It will be interesting to see the cycle of fully collateralized loans and only lending to people who don't need the loans return. The old is new paradigm.
I think employers look at bk a little differently than a $hitty credit score- will make it tough to find a decent paying job once you declare bk.
Basel, haven't been over on Rosewood in awhile so I'm not sure...
Outsider,
I really think credit ratings are, well, over-rated. Their such a boogieman but when the #%& hits the fan who cares. After leaving a small consultancy for another company my partner sued me. The suit was frivolous he knew it and I knew it (non-compete issues even though I had, in writing, specifically refused to sign a non-compete agreement 5 years earlier). If I had lost or settled it could have been a career killer. The litigation dragged on for almost a year before the judge through it out. It was incredibly expensive and almost ruined us financially, my wife and myt credit was in complete tatters believe me. I started monitoring my credit reports via one of those services and I watched as month-by-month both our scores improved. After a little over a year we were even able to get a credit card (big whoop) and frankly the issue just doesn't come up that much.
One theme that I hear a lot is that as long as your current on existing payments on cards, etc. it's not a show-stopper to get a car loan, rent an apartment, etc. I know my wife got denied a $300 dollar overdraft protection at her bank. Big whoop.
Am I missing something but other than buying a house what impact does the credit rating have? Maybe starting a small business I guess. Sorry for rambling my point is that I've just never seen a bad credit history lead to some apocalyptic scenario in anyone that I know.
Cheers,
@mos
If you're lurking; I got your email
Thanks for the follow up.
Ultimately, with all the thieveries going on, it looks like the unprepared baby boomers will be hurt the most. When the US government selectively defaults on its debt, the 51 trillion Social Security/Medicare obligation will surely be the first to go. After all, what will the older generation do? protest? go on strike? They're doomed to frail away in their lazy-boy. The question is, would we as a nation, decry against this? or would the younger generation simply scoff? (the baby boomer generation, which partied the most, now has to pay the price). Of course, the undeserved portion being the baby boomers who worked hard, saved for a rainy day, and now has to live in turmoil.
"Try looking into that place where you dare not look. You'll find me there, staring out at you."
Welcome, welcome all. Late 2006, early 2007 I tried pushing the idea on CR that this time was different wrt ruthless default. I was so pummeled with information from "last time" I was forced to hold back my opinion. Again, welcome.
Employers can pick and choose from lengthy lists of applicants, why would they want somebody with financial difficulties?
the 51 trillion Social Security/Medicare obligation will surely be the first to go.
you need another toke of hopium...
I think that many, many people don't give a rat's ass about anyone other that themselves; so I'll say that few will care.
Unless, of course, it is there benefits being removed.
Well then, that's a whole other ballgame indeed.
@ Dawg
Welcome, my son.
Welcome.
To the Machine...
You might wanna have that arm looked at...
@Gnome - Welcome.
CR,
While your statement is quite true, I suspect you didn't mean to say:
This has led many people to suggest principle reductions ...
but instead:
This has led many people to suggest principal reductions
or perhaps people are really suggesting a drop in principles!
There's an awful lot of *** back-stroking going on today. He was always good about dredging up something he had written 3 years ago, and complimenting himself about his foresight.
Area $51 Trillion?
Feckless--
I know, its weird. I had also sent it to some of my friends who got a kick out of it and one of them called me howling with laughter. Who would ever actually do such a thing. And now just 18 months later here we are and its a way of life. We ended up dropping 40K off the asking price, which seemed insaned at the time but within a week we got six offers and a couple had escalation clauses that brought it back up.
SD
@HomeGnome
I agree; we'll most likely see a society divided by age. A society where MSM will choose to serve its bias to the younger generation (they have the money), and relegate the older generation in obscurity. After all, what can the older generation do?
@Juvenal Delinquent
lol...you mean place older folks in virtual simulated slot machines...have it run for eternity. extract electricity from them.
girlbear:
Any stats on what percentage of homeowners would still have positive equity ( I realize it is a moving target) or percentage of people who own their homes outright?
About 20% own outright, 30% rent, and 50% have a mortgage of some kind. Mortgages are heavily loaded towards low equity, and were even before prices started to drop. CR has posted some articles in years past discussing the equity distribution.
About 17% of households would default — even if they could pay the mortgage — when the equity shortfall hits 50% of the house’s value, they found.
I'm actually stunned that it's this low. I know a lot of people who would view the value drop as proof that they got suckered into a bad deal, and look for reasons to break it.
OT: I still see Pigs™ everywhere. This time in the Baltic Dry Index.
"Ultimately, with all the thieveries going on, it looks like the unprepared baby boomers will be hurt the most. "
It is all relative. The most fucked up generation in modern history would be those born in 1880-1890 in western world. French, Brits, Americans and Germans basically sat in muddy ditches for years during WWI. Millions of men killed for absolutely nothing, for few miles at best. They are still finding and digging unexploded artillery ammunitions in Belgium today. Funny thing is that they do not even call a bomb squad, they just toss it over to the nearest ditch and call the police for pickup.
I'm most interested in the ramifications of women in our country having children for the 1st time, around age 40.
This has never happened before in history, and having children when you are older, tends to lead to smarter kids...
I know a few dozen kids from 6 months to 7 years old, all with older moms.
I'll let you know what happens in about 20 years...
Volker,
It's "Half measures availed us nothing, we stood at a turning point . . . " Not that I would know anything about AA, of course.
SD
I remember playing this game, Pass the Pigs, when I was younger.
Fun.
"Makin' Bacon" fairly well describes our position, I'd say...
Pass the Pigs | Image | BoardGameGeek
"Kevin-Bacon'd"
Watching a financial advisor being interviewed on Fox re the five banks being siezed yesterday. He said "Well, its really a good news, bad news type of thing."
@Basel Too
i prefer the term "efficient breach" as an homage to the Chicago School.
Oooooh...I so wanna squirrel that one away for future use...very nicely put! I can hear that in Greenspan's smarmy psuedo-academic intoning even now....
When I bought my house last month, my bid was $110k below their initial asking price(this year) and $50k below their revised ask(they cut the day I submitted.)
Not even a counter, closed in 10 days. Probably because if they waited for a better offer, in 6 months it'd be $50k below my bid.
women in our country having children for the 1st time, around age 40. This has never happened before in history...
Of course it has. They just started early and kept on having kids until their 40s. Difference is, fewer kids, arriving later.
After all, what can the older generation do?
What they've always done. Live with their kids. Who do you think took care of the elder generation before the government took over?
A friend in Federal law-enforcement went to FLETC (Federal Law Enforcement Training Center), to have a chip inserted, and he told me the tv monitors in the dining hall there were on Fox news 24/7, in the borg.
Do employers regularly look to see if an applicant and/or employee has declared bankruptcy or has bad credit? Do they have to disclose that they are running a credit check to the applicant?
SD
In as short as 3 years, your credit score starts to recover. 5 years out and you can be close to the top again. If one were to default on their credit card, auto loan, house payment, the key is to setup yourself up before defaulting (i.e. buy or rent a place that's much less expensive, buy another car that's much less expensive and will last 5+ years, and max out the credit car buying stuff that you might need in the next few years ...). Just saying....
"After all, what can the older generation do?
What they've always done. Live with their kids. "
True. But will the kids also pay for mom and dad's monthly $2200 medical insurance each?
Can you say, "universal health care," Scrooge?
I knew that you could.
US CODE: Title 11,525. Protection against discriminatory treatment
No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt—
(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;
(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or
(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.
Of course, proving discrimination is nearly impossible, and you can still discriminate based on credit history.
I think it is even getting too late even for cram downs.
There was a time when lenders could have told borrowers, ok, let's split the
difference, and I'll even lower the rate by 1%, and the borrowers would have
been all happy and greatful, and might have paid for a very long time, maybe
forever. Them times are gone. My clients are even starting to think ahead--
well, so what if they cram it down 25% and I'm "only" 25% underwater, and
my payment is sorta reasonable. What if the value drops even more? Are
they gonna reduce it again? Well, if they don't, I will walk.
Or a simple, why bother?
And I'm happy to see that Tanta was with me on the deficiency judgment thing.
Scrooge McDuck: "After all, what can the older generation do?
What they've always done. Live with their kids. "
What can the kids do? It's not like they have access to castiron radiators and duct tape any more.
OK. well, the duct tape...
@Feckless Ness
Ah yes. Universal healthcare. That stuff that we've been trying for 18+ years. If only our behemoth insurance/medicine industry and the younger generation will agree to it.....
Well my mom is living with me, but somehow I think that you all are thinking
of me as the older generation.
I've hired over a hundred people for my businesses. Very rare for me to run a credit report in helping to decide whether to make a hire. What businesses actually make it a standard part of the hiring policy?
Government? Finance and law enforcement positions.
Banking? All Positions.
Large companies with HR departments? Unsure.
Old people vote. That is their power. They also own assets with the implied power that represents.
Listened to an analyst regarding the BDI having an increase. He made the point that the ship owners have colluded on a price regardless of demand. Makes sense now that the smaller players have been BK'd and the larger providers have mothballed ships.
Morality of credit. I always chuckle when I read the comments of the people who believe it is a sacred duty to pay back debt. The examples otherwise seem to show how that has turned out.
Slick dog, yes and yes.
It is illegal for employers to check credit scores unless creditworthiness is germaine to the job function. As Tanta noted a while back, a lot of places just file them because the job pool for the wage they want to pay isn't good enough to weed people out for poor credit scores.
In regards to upside down mortgages, I have always said whether the default is ruthless is more a matter of timing. If you are carrying 100% or 110% on you mortgage you simply can't or won't put the $10,000 into the house every few years that is needed to maintain its value. Eventually, even if you play by the rules, you'll hit a roof replacement or the like that you simply can't afford, and with no equity you will default. For whatever reason, most likely the short term value in housing most have focused on for the past decade, people have forgotten that home ownership if a very expensive proposition. If paying down the mortgage were the only carrying cost, you would have the luxury of considering it just a matter of personal character. Personally, I think people should ruthlessly default and get it over with.
Big Dimon Balls.
CHICAGO (Reuters) - Too many regulators will only increase costs and reduce credit opportunities for consumers, JPMorgan Chase & Co Chief Executive Jamie Dimon warned in a column he wrote in Saturday's Wall Street Journal.
"Company leadership must foster a culture within their institutions that focuses on integrity, strong execution, quality products, long-term value creation and doing the right thing," he wrote.
"Golden parachutes, special contracts, and unreasonable perks must disappear."
I gotta go puke now.
The walk away is very tempting. If I had an excuse, I probably would, but at this moment I can afford the payment and could not show any adverse change in income or medical expense. I guess I'll continue to be the greater fool unless some opportunity arises.
My brother in his 50's is living with mom, and so are a bunch of other 50 year old sons living with mom all over the neighborhood. Daughters as well, but sons predominate, according to mom.
@lawyerliz
I heard lawyers don't grow old. I kid, I kid.
JD, daughters learn how to pick up their clothes off the floor early in life.
Hi liz, long time no see.
Ah-ha, someone else still likes the money speach.
Well, I've been here Bosch, where you been?
Slick -
If there's an ethics component to the job - public trust, fiduciary duty, client confidentiality, trade secrets, legal non-disclosure, homeland security, etc. - you can expect credit history to be relevant to the hiring process. The ability to manage money and one's decisions about personal obligations are a fair predictor of job performance and reliability.
braking down. that's past. now gardening and getting back on my feet.
Hope you are better.
shooot. in south carolina, credit score is a component of driver's insurance rates.
Well enough to make hopey comments.
TYVM
The almighty FICO score has hastened the credit crisis. By protecting all credit with being dinged by a late payment or non payment you have created a system where universal default takes on a different meaning for the debtor.
ISTR that Tanta laid a lot of blame on the over-reliance on FICO as a means of underwriting borrowers. I suspect that it's over-use and creep into other areas - determining insurance rates, hiring, etc., will eventually run into legislative blocks. It's a little abusive.
On cramdowns, etc, and bailouts: there is really no difference in the end result - if we let the long-term, well-established mechanisms hold, eventually REOs flood the market and the banks take the losses - it falls on the creditors - who then get bailed out. All you effectively control is how much borrowers are "punished" - a policy goal of questionable value that nevertheless seems of paramount importance in all things to some folks. I have to ask: what overall societal goal does punishment, in and of itself, serve? Everyone involved at a societal level - banksters, debt whores and the virtuous prudent savers, ultimately benefit far more from cramdowns or "principal forgiveness" than we benefit from punishment.
Anonymous, you just need a few tokes of hopium...
My mom volunteers a lot at her local library, and told me you wouldn't believe how many adults hang out there for long stretches of time...
Where else would they go, I suppose?
@Dawg - hehe on Pigs. That's just in Capesize though. Not quite the same in Panamax.
Had a fairly crisp argument with a normally respected trade economist couple of weeks ago, as he blithely claimed that BDI showed that primary inputs and forward orders plus China numbers equalled unrivalled green shootery. I suggested alternative points of view.
C
When I was car sales, the story was you needed two of three: income, credit score, or loan-to-value (often stated as downpayment). I would speculate most consumer borrowing is the same.
HG, had some. That's what gave me the impetus to comment. Been lurking for days catching up.
"Golden parachutes, special contracts, and unreasonable perks must disappear."
No doubt Jamie was tearing up his employment contract as he wrote this. He'd surely want to lead by example, no?
@Externalized Costs
"Old people vote. That is their power. They also own assets with the implied power that represents"
You see why the government has to inflate the debts away? An outright cancellation of the social security/medicare program will enrage the seniors, and they do have a huge voting block. However, if it's secretive default (massive inflation), nothing the seniors can do about it.....can't vote the inflation away. Or can they?
I am amazed at the number of adults glued all day to local library computers. Where I live, there are probably 4 computers/household. We have 5. I wonder what they are doing all day. Maybe hanging out on CR.
"They are still finding and digging unexploded artillery ammunitions in Belgium today."
And poison gas bombs from WWI in DC.
and having children when you are older, tends to lead to smarter kids...
Ouch JD, where in the world did you get that from...
The library rarely kicks anyone out...
Even the homeless drunks that pass out in a chair just get woken up.
We have 5 computers in my house.
"We have 5 computers in my house."
I got a mole on my leg looks like Nixon.
We have 2 at home. And then 3 at my ofc.
Does it have jowls that shake, Volker?
Oh Volker, i was just responding to that note up there (draws arrow pointing up).
But your mole must be something to see.
Even bears get it in the end
Volker... Excise it and sell it on Ebay.
Outsider,
Experiences are what shape us into what we'll be, and a 40 year old woman has had twice as long to experience life, as opposed to the traditional 1st time mother being in her early 20's.
Felt like a moment worthy of adding to the non sequitur.
Yeah, JD, but you have to take into account deterioration in the womb itself.
A 40 yr. old woman just doesn't have the healthy anything that a 20 yr.old does.
so I'm told, of course.
Rob D- remember how mad Tanta got at us when we pushed the ruthless default?
That was the last of the old guard in the mortgage industry expressing their distaste for the new reality.
As for Jas J- he goes all the way back to the Colorado longwaves forum of the late 90s. He was a bit saner then.
I think working for Cisco fried his brains in Crisco;-}
Now that is a cryptic comment- I am sure George U ghosts here too- as does the Krugmeister.
There is a bit of inside baseball even here.
Someday this war's gonna end...
My job app had a question on the about bankruptcy...
I'm sure if I had one, I would not have gotten the job
And I'm a Chemist....
One's eggs get old too.
Never theless I enjoyed my 2nd child at nearly 35 more than the first at
23.
Really, the genetic engineers should do something to make puberty at least
5 years later for both men and women. We'd live longer and be healthier
longer, and be old enough to actually be a bit wise for the kids.
There was a sci fi novel with a vastly extended pre puberty as one of the memes.
I forget the author.
Basel--
Thanks, interesting and good to know.
SD
selection bias?
women who have kids at 40 tend to be career-minded women
women who have kids at 16 tend to be...
Most of the over 40 mommy league has one and done, 3 is the outer limit.
For womb the baby tolls...
Well, nothing is stopping younger people from voting.
Hmmm, what would work?
80% loan to value worked. So I guess what would work to
prevent ruthless defaults is to cram down the loan so that
the owners have 20% equity.
I told my mom and hub that the small stock mkt drop of Friday
was due to "too much savings". They both said what??? and
their jaws dropped.
You know, maybe these things happen just because we all get
too tired to continue, and then we have to rest.
The spendthrift days aren't coming back for at least a generation.
I would suggest that your body had 12 years to recover from your first birth, so that #2 had a healthier pre-birth experience.
It's just always been my thesis that the womb is healthiest for the 1st born, and gets less & less healthy thereafter, because childbearing takes a tremendous toll on the body.
But it's just a thesis. Someday when I'm a gifted scientist, that will be my research project. Until then, I still can't swallow that babies born to older mothers are smarter - just goes against what I've experienced.
Okay, so sorry for the OT - it is Sat. afternoon afterall...
Girls who have kids at 16 tend to be...lieve the lies told them by 17 year old boys.
If there's an ethics component to the job - public trust, fiduciary duty, client confidentiality, trade secrets, legal non-disclosure, homeland security, etc. - you can expect credit history to be relevant to the hiring process.
Amusing Comment Of the Outsourced Day.
Relevant only to the hiring process of AMERICANS, buddy.
Actually a lot of them are believing lies told to them by boys who are
really old enough to be men.
@ Feckless
Or their 40 year old teachers...
17 & 40 = 15 to 20
Citizen AllenM (profile) wrote on Sat, 6/27/2009 - 1:14 pm
Rob D- remember how mad Tanta got at us when we pushed the ruthless default?
That was the last of the old guard in the mortgage industry expressing their distaste for the new reality.
I do and i remember how frustrating it was to try and explain newthink in terms of oldthink. Then there was all the time in between then and now when several posters kept bring up my advocacy of ruthless default like it was a sin and it was a greater sin to be encouraging it. Funny thing is if many of the people now inexorably headed to workout/mod/cramdown/default had done as I suggested the banks would be facing a much smaller and far more identifiable problem.
Not in scenic South Carolina, JD.
Yeehaww!
Ages of consent in North America - Wikipedia, the free encyclopedia
Now, volker, you've just thrown down the gauntlet for members like Broward.
Well, off to play pool and have sex now.
Good luck with that.
At the same time?? On the pool table?
When I was 14, I had a crush on my 35-ish Social Studies teacher, and I know he was interested. Thank god, he wasn't a creep or we could have ended up a statistic. Biology just doesn't listen to reason.
BH - yeah. Pardon my geocentricity.
Outsider, you thesis would have some merit wrt rebound and exhaustion effects, but not heritability:
see this wiki Heritability of IQ - Wikipedia, the free encyclopedia
As you can see, the genetic starting point is quite important, but the nurture component is actually highly important in the expression of the genetic potential.
Children of older parents are often much more stimulated (as I see frequently in watching under 10 sports like just two hours ago), and the parents are far more attentive.
As with most things, outliers do occur.
As for the relative iq of children, well that is literally a lottery for the starting potential- followed by a very interesting development cycle that can enhance or hinder realization.
Older versus younger wrt age of mother would only matter with mutation or deficient resources for the child due to parental diet or health.
I am aware of a situation where a younger (in their middle 20s) vegan couple has essentially retarded their children through malnutrition and exhaustion during pregnancy- but that case was extreme in that it resulted in the death of one of the children and jail for the parents due to neglect. The remaining children are recovering, but will they ever be as good as their potential at conception? Most likely not.
Someday this war's gonna end...
I wonder if the police will let him take the leather pants along on the ride downtown...
It's awful hot to be wearing leather pants.
Settle is a bit cooler, as a rule
I thought he was in Idaho?
AllenM - if we're thinking of the same case, they weren't just vegan, they were raw foodists. I didn't follow the case to conclusion, but I do know that society often persecutes what it doesn't understand. A raw food diet, in and of itself, doesn't have to result in malnutrition, even in children.
Well, now the banks are finally beginning to play ball with modifications.
Right now we fit the model of ruthless default, and it has been a topic of discussion.
Except for that inevitable bout of inflation in our future, I would have been outta here a year ago.
That is the only result that would validate this house purchase- right now- with a gentle two to three years of stability, it is a close call whether to maintain the inflation outlook and pay through the belly of the bottom (of course screaming like a banshee for a mod, mind you) and then screw the lender on the back of the 30 as inflation rips.
Further, I think CS' example just about stroked Tanta out- that was definitely the new new.
He was just three years too late in starting.
Someday this war's gonna end...
edit, sounded really dumb on second thought
DOW 6000 (profile) wrote on Sat, 6/27/2009 - 1:15 pm
My job app had a question on the about bankruptcy...
I'm sure if I had one, I would not have gotten the job
A walkaway does not require a BK. They are separate, independent events.
You can phone in a pool game?
AllenM --
But you've heard that the first-born is usually the most successful in life. Do I have to look up the wiki about that? No please, don't make me. First borns do seem to outshine their younger siblings, and that does not go with your thesis (or whoever's) that the older the parent, the more attentive, therefore the more stimulating for the child. In fact, in my own case I have found that the older I've gotten, the more tired I am, and probably have less to give the subsequent children after the firstborn.
Maybe we can corroborate and find funding for our research. In this down economy, spending a couple years doing a grant-funded research project may not be a bad idea. And it certainly would be interesting.
Not the older the parent, Outsider. The older the first-time parent.
Feckless, they were hardcore raw foodists without any real understanding of wtf they were doing. I blame the rest of their family for taking so long to push the issue that a child died. I have no quarrel with a careful application of faddish diets- but forcing children to eat a barely survivable diet for adults was beyond stupid- especially when the mother was so starved she could not even produce sufficient milk.
They further took action to avoid and evade care for the children.
It was criminally stupid. Now those damaged children will cost the taxpayers for decades.
That truly was insanity by society- and by all who knew the extent of the foolishness and did nothing.
Someday this war's gonna end...
I'd like a taste of that grant money.
I'm a middle child (out of five), the prettiest, by far the smartest and possessed of the strongest moral ethic. Maybe it's because my mother (who had five in seven years) was 24 when I was born. Something about that mid-twenty age.
Either way, I'll participate for real money.
That's okay, feckless. I'll include the variables for older first-time parents as well as older parents of multiples. My thesis remains the same - the younger the mother, the better the prospects for the child.
OK, volker, you just freaked me out, you're female
I always pegged you as a grumpy old guy.
But you've heard that the first-born is usually the most successful in life.
there are still lots of people in the US that practice primogeniture in one form or another.
OT: made raisin scones for the Nazi, came out better than expected
Cooks.com - Recipe - Raisin Scones
volker is no more a female than I am. Wait, now I'm confused.
Can I participate too? First-born, Mother=24. Obviously the intelligence went elsewhere. I could be an outlier. That's where I usually am anyway. No checks or MBS for payment though.
Basel - There might be a reason for that. And I say that unbiased-ly because I'm the youngest of 4.
see, outsider, you suffer
who could possibly divine who/what I am from interacting here
especially the more extreme type like one whose name will never be uttered
Ayyyyy caramaba!
Just got a call from friends (she's 39, he's 44) that just had twin girls, their 1st children...
Try this thesis - the more nurturing and attentive the relationship between parent/parents and child, the better the prospects for the child. Later in life, first-timers may have more time to appreciate parenthood, just as young new parents are more likely to appreciate and be attentive to their firstborn. It's a new and amazing experience.
Ask any parent to show you the baby pictures for their first and subsequent children. First kid - tons. Second kid - not so much. The newness has worn off. The parents have been there, done that.
Well, the most recent research in more inconclusive:
Birth order - Wikipedia, the free encyclopedia
but here:
Only child - Wikipedia, the free encyclopedia
Reading the research together seems to point to smaller families producing significantly better outcomes in children- which argues resources (both in utero and in subsequent development) rather than birth order.
I note that only children seem to have a distinct advantage in lack of competition for parental attention.
In my own case, that lack of siblings for my child means the expense of private education from preK is much easier to maintain.
Now that kind of lack of competition for resources has tremendous long run consequences- right?
Someday this war's gonna end....
Ooh. So you ARE a grumpy old guy. Well good, my thesis was correct.
"...the more nurturing and attentive the relationship between parent/parents and child, the better the prospects for the child."
I would posit that the Spartan model serves society better. All the used hay fed us about 'for the children' is just that. Screw the children. Get tough or die.
Um, with a little effort searching comments you would know I am comfortably heading into middle age, but still resisting the thought of arriving there.
I can't be that old, can I if I have a 7.66 y.o. son- right?
Just wait until you get there, you young'uns.
There was nothing so bracing as growing up and signing up for the draft (Selective Service is such a tame way to say it) when Ronald Reagan was president and invading small countries.
Someday this war's gonna end...
who can list the presidents that did NOT invade/commit troops abroad?
Feckless, if volker doesn't want to do the research project with me, maybe you will.
Uh, were there any such POTUSes?
for one, william henry harrision
"who can list the presidents that did NOT invade/commit troops abroad? "
goldman sachs
Millard Fillmore?
Geez, Carter and Ford didn't invade anything.
Carter even gave up the Canal. He also should have done something more competent to rescue the hostages- but such is life.
Someday this war's gonna end...
Outsider,
There's social studies, and then there's Social Studies. Unless you're a mustachioed 60-something named Prescott, I ain't innerested.
A girl never forgets her first crush. He was dreamy.
Gah, I have been on the other side of those crushes- they are soooo touchy to deal with.
It is the hardest thing to be in your twenties teaching college classes with a strict hands off policy.
Now as an old man it would be fairly easy. Although one of the professors I did research for Simon H was on his third wife- two of them had been graduate students- I though he was a nut to have two more kids at 58- retirement was gonna be 80 for him.
Someday this war's gonna end...
"The most fucked up generation in modern history would be those born in 1880-1890 in western world."
yes, slide that 5 years to 1885-1895, and you comfortably have hitler, stalin and mao.
and the same is the case here, of course, for our 1948-1958 babies.
some generations are just rotten.
Carter had the fiasco in Iran when several members of the raid were left charred on the desert floor after he botched the operation due to his unilateral disarmament.
Ford has the Mayaquez which cannot necessarily be counted but did preside over the fall of Saigon.
Next?
.....and to think I purchased a 386-clone to "get to this" 20-years later.
Well, at least I'm not drinking, smoking, and "hot-chatting all the cyber-babes" now. Things sure have "progressed" a bunch since the Windows 3.1 days......home-grown vegetables vs. home-grown smoke, homemade frozen ice cream vs. homemade frozen daiquiris, kids 15 to "a gleam" vs. 35 to 16 years old, we were messing around in the Middle East then vs. still messing around there now
............things change, things stay the same..............and somethings keep degrading.
Toodles, all. It's too nice a day in TRW to remain in VR-land.
Funny the ones calling the boomers rotten are probably the boomers kids. If the boomers did such a crap job then just look in the mirror.
well its 105 here with a heat index that makes Iraq seem balmy
Yeha volker- Pahoenix is going to be thunderbumping tonight with this nasty heat. The ac is cranking.
Someday this war's gonna end...
"after he botched the operation due to his unilateral disarmament."
Not quite. The sikorsky helicopter engines failed after they ran into an haboob ( a desert sandstorm with especially fine-particled sand). They had removed the engine filters to enable the helos to make the distance required...the filters reduced fuel mileage.
The social contract can be argued as a debt with which there is a payment system of fees and taxes. Local, state, and federal government are starting to walk away from the debt it owes to the governed which starts a cycle of more taxpayers seeing taxes as an unproductive outlay.
When does the number of walk aways lead to the government walking away from its debt?
When is the tipping point...
It is the hardest thing to be in your twenties teaching college classes with a strict hands off policy.
Nah. I waited a few years, then I married one of them.
fried: don't try to re-write history
I was on duty when it happened. The US military didn't have the resources to conduct a raid on a girl scout camp thanks to Carter.
It does not matter whether women in the west decide to now have kids at 15 or 40. Between demography, technological diffusion and other changes.. their model of the world is over. They just don't know it yet...
Grover Cleveland, Millard Fillmore
fried: don't try to re-write history
I don't care what you were doing...the facts on the helicopters are the facts.
And Carter sent them, on his order.
Maybe also listed with Cleveland and Fillmore might be J Q Adams.
For volker,
if you have the patience or inclination to read....
Special Operations, Operation Eagle Claw - Military Photos
Lucifer,
let's just say I am an accelerationist.
Lord of Light - Wikipedia, the free encyclopedia
Children can either survive their childhood, or do something stupid enough to be put out of the genepool.
Same goes for countries.
Iran wants to play with the tall man of smoke who wears a wide hat- then they might find that he comes for them first.
The West is the best past master at war.
Look at the massive casualty disparities.
Someday this war's gonna end...
volker the viking -
I was on duty when it happened. The US military didn't have the resources to conduct a raid on a girl scout camp thanks to Carter.
Volker, the operation went to hell after the helicopter crashed, then other aircraft got damaged. It had a good chance to succeed if they did not hit that storm, or at least that is what I have heard from people who where there.
That fiasco resulted in the expansion and real formation of the Delta team and much more integrated joint operations and training.
But you are right, at the time the Military was in horrible shape and it took massive overspending to get it in shape. Now they are being worn to the bone again.
Kauai: I'd be surprised if you have spoken to anyone who was there, they may have said they were there, they may have alluded to being there, but it was a very small operation. Take your inputs with a generous serving of salt.
fried: the areas of common agreement are greater than any possible disagreement between you and I.
"But you are right, at the time the Military was in horrible shape and it took massive overspending to get it in shape. Now they are being worn to the bone again."
LOL!!! Yeah, that's what the Soviets said, too.
We gotta militarize. Them bad Amis will invade us.
Spend!
Spend!
Spend!!
Citizen Allen,
Two points-
how many of you will be left behind versus how many of them will be left behind?
they may not attack you with sticks and stones. Ever wonder why the west never won a real war since ww2?
volker the viking -
Kauai: I'd be surprised if you have spoken to anyone who was there, they may have said they were there, they may have alluded to being there, but it was a very small operation. Take your inputs with a generous serving of salt.
I believe them because they had the scars to prove it and I also saw their service records. Back when I was young, dumb and in shape. Amazing people.
I have a hard time when people talk sh*t about that, and also the "blackhawk down" raid that went bad. Sometimes bad things happen and the stuff piles up deep and you just have to slug your way through it.
Lucifer - Ever wonder why the west never won a real war since ww2?
What? So your saying we have not had a real war since WWII, or we have just lost all of them?
Hold on, hold on.
"...The research is based on homeowner surveys, which also considered moral and social factors involved. People who said it was immoral to default were 77% less likely to declare their intention to do so, the authors write, while those who know someone who defaulted were 82% more likely to say they would default themselves..."
So...this "research" isn't based on what homeowners actually did, but what they said they might do when asked in a survey? Not exactly what I'd call hard data.
And ruthless default on the part of people who can afford the payment isn't rational behavior at all, it's "panic" behavior, the irrational fear that prices are going to continue down indefinitely and conditions will never improve. If you can make the payments, need a place to live, and have no reason to move, the rational thing to do to "regain" some or all of your lost equity is to just sit tight.
I've been upside-down on two of the houses I've owned, one of them for several years. I either broke even or minimized my losses by riding out the bad times and waiting for better conditions.
Sebastian
there things went downhill fast and they did a di di mao
they were given a mission improbable that relied on everything working perfectly
If it walks like a duck and quacks like a duck, then WTF?
It's a duck (or two)
YouTube - Ducks having a conversation
How is this related to eCONomics?
I dunno.
But it makes me feel better...
@ Volker- relied on everything working perfectly
Kinda like our NEO CONNED Iraqi cakewalk.
seems to be somewhat similar to the bay of pigs, really...
GIGO as they say in silly-con valley
Kahuna,
why did we not have many major conflicts since ww2? Winnability?
volker the viking -
they were given a mission improbable that relied on everything working perfectly.
Ours is not to wonder why, ours is but to do or die.
The Intel was plain wrong about the weather, and once it went bad it went very bad. I don't think Carter had all the information, and he trusted the wrong people.
As far as I'm concerned the only 'real' home equity is the monies you've paid.
And sometimes not even that.
Of course a black swan could crap on my idea.
Kahuna,
why did we not have many major conflicts since ww2? Winnability?
Lucifer -
why did we not have many major conflicts since ww2? Winnability?
So which of the minor ones and the few major ones did we loose?
Now granted Korea was a push, and Vietnam was a mess, with the friends we had there who needed enemies.
The real problem is we have attempted to be the policeman of the world, and people are getting tired of it.
I will never be, nor would I ever recommend anybody be an apologist for Jimmy.
Lucifer, the west has not won a real war since WWII because we have not had a total war of annihilation since then.
Even Korea, when it threatened to spin out of control was still just a sideshow to a cleanup after WWII.
Nobody wanted to fight a total war against America again- we proved that there is a threshold at which we will use almost any means necessary to win.
One of the problems is that in a multipolar world, there are too many overlapping spheres of influence, but with the history so raw and new, nobody was willing to put down the massive sacrifice to extend real influence beyond the natural national borders.
Both world wars had European powers attempting to do just that, in large scale. The result was between 70 and 90 million dead.
The next world war will have casualties in the billions.
Guaranteed.
These little post colonial police actions like Iraq and Afghanistan are just that- piffle in terms of resources and manpower. Sucks to be the folks who have to go out and die, just like it did in Kipling's day on the Northwest Frontier.
Same results, same stupidity, but not real western style warfare, unless you count what Custer did after the Civil War as warfare- which I don't.
Did any of England's colonial messes end up doing in the Empire? Nope it was the World Wars.
What would the casualties be if India decided to conquer Pakistan- not just beat but conquer?
That is total war, as has been waged before in Asia, and will be again.
Same goes for North Korea today- if the Chinese ever decided the have no use for that idiot in charge, they might find a way to get rid of him, meanwhile it keeps millions of Koreans either occupied or preoccupied with a moronic dictator with small nukes.
Someday this war's gonna end...
Well written and supported.
Greater depressions: social and behavioral trends of economic collapse
by Kathy McMahon
Greater depressions: social and behavioral trends of economic collapse | Energy Bulletin
HomeGnome -
As far as I'm concerned the only 'real' home equity is the monies you've paid.
And sometimes not even that.
While I do count the money I put into my place as part of my net worth, I don't consider it equity. I need some place to sleep and store my junk.
I do not consider it to be something I can borrow against. Maybe I'm just one of those old school guys who will eventually loose even more.
volker the viking -
I will never be, nor would I ever recommend anybody be an apologist for Jimmy.
He's done some good work for habitat for humanity, but I would not want to live in a place he helped build. Everything he touched seemed to blow up.
"Lucifer, the west has not won a real war since WWII because we have not had a total war of annihilation since then."
Typical "western" viewpoint.
Ask the millions that died for "our" wars.
Just the because the "world wars" weren't fought on "our" soil, does not mean that millions didn't die.
I wasn't suggesting taking a cash advance against the house, Kahuna.
Besides, all that brewing equipment takes up a lot of space.
Esp, if you're an all grain brewer like myself
I just want to pay my home off as quickly as possible.
Well, the launch went off successfully.
Even if you add just 50 or 100 bucks a month, you will pay
your mtg down much faster.
Our first Fla house, they would give us only a 25 year mtg, 'cause
they said the house was only rated to last another 25 years, so
we paid it off slightly faster. The new owners got a 30 year mtg when
we sold 9 years later, in 81, and it's still very much there.
Then, here, we again got a 25 year mtg, and whenever we got a
windfall or the hub got a bonus, paid down the mtg. It's was paid
off a year and a half ago.
There is hardly any difference in payment between a 25 and 30
year mtg. And only a little more with a 20 year mortgage.
The 15 has a significantly increased payment, but a lower
rate.
The Kathy McM article is sad, but no doubt true.
Thanks Costs.
Where is everybody?
Oh, pigged, and I didn't realize it.
Classic crowd behavior -- when enough people do it, you don't need to justify yourself -- because "everybody is doing it."
Too big (in numbers) to be foul? kinda mirror image of 'Too big to fail' ??
I can believe this research. In some areas, people have little choice but to walk away. I know people walking away; my mom is walking away. She's in suburban Detroit and lost her job like so many others in the auto industry. She tried to call the bank several times last year, well before she got fired, to work something out ahead of time. The bank told her it would not speak with her until after she defaulted. So she stopped making payments. Even then, it would not return her calls until after she missed the second payment. She now gets bi-weekly calls asking when she will make her payments. It will still not discuss any work outs or decrease in principal. It wouldn't even authorize a short sale until she missed her third payment. Her area is glutted with foreclosed homes marked down as far as you can imagine (25-50k range) but even they are not selling well. Her choice is/was easy. Should she continue making payments on a $100k+ mortgage with payments she cannot afford or walk away and start over elsewhere? The bank made the choice easy. It will soon have one more foreclosed home on its books.
I have a hard time believing the worst is over for the nation's banks. The bailouts are not working -- they are only propping up failing institutions, misallocating taxpayer resources, and delaying the inevitable. For what its worth, the Feds need to consider the model used in the Great Depression to keep people in homes, take over failed banks like Citi, BofA, etc, and stop the incessant bleeding.
It absolutely, ABSOLUTELY is fair and equitable for people to walk away from their mortgage if their house is underwater. This isn't the 1950s where "people kept their promises", etc. Banks have spent decades teaching us that they don't owe us anything, and what goes around comes around.
These days we need to treat our finances like a business, and act like businesses do. Don't they walk away from their obligations to us, if it's in their legal right to do so? Don't banks and credit card companies do whatever is legally available to them? Don't companies close down profitable factories simply because THEY AREN'T PROFITABLE ENOUGH?
We should do the same thing as well, if our home that we purchased isn't worth what we paid for it, and it looks like it will take decades to recoup, then we should walk away from it, just like a bank or other company would do.
Walking away from your mortgage holder may maybe classified as strategic ,but the question remains how much financial liability does the borrower still have to answer for.
The smartest way is to file Chapter 7 Bankruptcy. This gives the borrower a fresh start .
Whether you walk away or file bankruptcy do it logically and smart, not emotionally.
When dealing with a bank, the phrase for you, " is to do unto others before they do it to you.
And Ironically my former federally approved and regulated federally chartered thrift bank was cited in November 2008 for "Unsafe and Unsound Banking Practices. And they still operate today making mortgages loans with the approval of the Unites States Government.
It would appear then that the Congress and the Bankers have the same DNA.
Businesses make these decisions every day of the week. The body of Contract Law contain numerous legal principle, cases and statutes on formation, breach, and remedies all of which are designed to deal with cases when people walk away and or breach from their contracts. Assuming that the homeowner should be afforded the same benefits of walking away is nonsense. There is no reason why the homeowner to continue to be the sucker instead of acting like owning a home is just another business transaction.
Bankruptcy was designed as a protection for the economy and society at large. Now the law has become skewed in favor of the creditor.
What's good for the goose...
There is a spectrum of how voluntary defaults are. If someone living in a non-recourse state has significant assets and chooses not to pay a mortgage, that’s clearly voluntary. But someone who took out a loan who payment was originally a third of his after-tax pay and is now over half of his takehome, that’s not that voluntary. Maybe he could keep making the payments if he put all his effort into it, but I wouldn’t call him defaulting voluntary.