Website sells 'peace of mind' for walking away from mortgage

[Az]

Corporations let unprofitable subsidiaries fall and leave suppliers and other debt owners with almost literally nothing, some completely unliquid PP&E. Often, these are highly profitable companies/individuals discarding dead flesh.

The little guys shouldn't hold themselves to a higher standard, especially with their banks often not pricing their debt in more favorable terms.

[MRT144]

If they CAN'T pay it back that's different. I'm talking about people who CAN pay back, but just choose to let others pay their bills.

So what? The bank knew that was a possibility, strategic default, when they made the loan.

[Ben Kenobi]

My head hurts here.

Kidicious is arguing that people should not walk away from their mortgages and he is attacking 'conservative' economists?

Are you referring to Keynesians? They aren't Austrians. Keynesians are in no means conservatives.

[Ben Kenobi]

Honestly, sometimes walking away from a poorly performing investment is the best thing to do. Corporations do it all the time. I myself am $180,000 underwater on my house. I just bought at a bad time though I've decided to stick it out. A mercenary would just hand the keys into the bank though and be done with it.

True. Sometimes there is simply no choice but to break the contract. I don't have any problem with people breaking a contract provided that they pay the penalties associated for breach of contract.

As for people walking away from their mortgages because they are 'underwater' I think that's pretty irresponsible, unless one of the following things happen:

1, you lose your job and have to relocate,

or 2, you have an illness/death in the family that takes priority over the house. Most mortgages when they start out will be underwater, simply because the principle is much larger than the equity. Doesn't make sense to default your obligation.

[Ben Kenobi]

reset the mortgage amount to fair market value

Disagree. Buying at the top of the market/overbuying deserves to get punished. This way housing prices come down to fair market value as people default. This is an important check to the system.

[Solomwi]

...the penalties associated for breach of contract.

I'm going to let it slide this time, since I'm feeling charitable.

[Flubber]

wow

a couple opf years back if kidiocious talked about loans it would be to moan that interest was exploitation and that "capital" had no value

Now this feels like 'Bizarro apolyton"

I have little problem with people doing whatever their contracts permit. ON a personal level though I would feel a bit of a ethical type pull to "pay back what I owe"-- (But thats easy for me to say as my house was purchased in 2001 and is worth twice what I bought it for and many times what I owe)

[N35t0r]

Mortgages specifically net you better rates and longer terms than regular loans because there is a house as collateral. A house which should be valued more than what you owe, so technically the bank should come off ahead if you decide to drop the mortgage and give them the house (more so since you've already paid the bank part of the mortgage as well). Now, if the bank can't do it's job right, or for some reason not in your control the house is worth less, then they did a bad investment. In any case, there really shouldn't be a problem ending the contract. [edit:] it's not as if you're defaulting on a loan, the bank is getting a house!

[Caligastia]

Maybe if lenders hadn't driven up the price of homes by making risky loans, then borrowers wouldn't be in this situation.

[Hauldren Collider]

What pisses me off is when people accuse banks of "taking away their home" when they default on their mortgages. You never finished paying for it, it isn't your house!

[giblets]

What pisses me off is when people accuse banks of "taking away their home" when they default on their mortgages. You never finished paying for it, it isn't your house!

Technically the word home implies residence, not ownership. Where you live is your home even if you don't legally own it.

[Solomwi]

Because it's not enough that he grew up with Kuci...

[Hauldren Collider]

Technically the word home implies residence, not ownership. Where you live is your home even if you don't legally own it.

But the banks aren't stealing is my point.

[KrazyHorse]

Most mortgages when they start out will be underwater, simply because the principle is much larger than the equity.

Are you retarded?

[KrazyHorse]

Maybe if lenders hadn't driven up the price of homes by making risky loans, then borrowers wouldn't be in this situation.