Wow! This Is BUSH's America

[NashVegas]

Here's a full and very telling quote from the article cited in El Pinko's housing meltdown thread:

"I have purchased a cheaper place in a nearby area now, while my credit is good, and will stop making payments on house #1 after house #2 closes. I know the foreclosure will be on my credit for 7 years, but I will have saved a lot of money.

"I realize I agreed to the deal when I signed the mortgage papers, but I am within my rights to walk away from a bad deal and suffer the consequences, just as many corporations write down billions of dollars of debt, lose money for their shareholders, and lay off people as a result of their bad decisions.

"I don't really understand why people view a business decision by a homeowner as a terrible moral lapse. However, when large lending institutions, with access to more sophisticated information than any consumer could imagine, make mistakes affecting thousands of people worldwide, they are not excoriated and vilified with the same righteous zeal."

http://latimesblogs.latimes.com/laland/2008/01/a-tipping-point.html

He's got a point, doesn't he?

[havocmom]

1. Wow, sad, but yeah, he does have a point

BOY does he have a point

[Nite Owl]

2. Not surprising

corporations can't continue to get away with what they do without a backlash. It isn't just the debts owed either, workers no longer have that feeling that it is their company and that the work they do will be rewarded. Corporations have treated workers like just another commodity to replace with someone cheaper and yet they wonder why their is no loyalty.

[NashVegas]

4. The Social Contract

Used to be between the upper classes and the lower - "noblesse oblige."

Corporations / stockholders take all the benefits of their class, but want none or few of the obligations.

And the fellow being quoted is a chip off the block.

[Fresh_Start]

3. sure, he's got a point

"me first"

meanwhile, others will pay more or lose more home value due to his actions
foreclosures depress home values around them, not just the immediate neighbors but blocks of neighbors

[El Pinko]

Those home values were always based on speculation.

And the reason the speculation was able to get out of hand was because of the shady lenders. It will hurt the people who bought at the height of the bubble, but sorry folks, home values have historically always been at 3X the local median income. Incomes have not risen, but home prices in most areas are 5 to 7X median incomes, so the prices will fall back to trend - you can bank on it, and blaming people who decide to cut their losses rather than the lenders who KNOWINGLY created this mess using memes like "it's different now" and "they're not making any more land" and "financial dark matter" or whatever to convince people that 15% annual appreciation would continue forever is not going to help.

[NashVegas]

13. Something I Saw Last Week

In talking about home prices, a news story in my local paper used this very misleading sentence:

The median price of a home sold locally remains about three times the average household income, a ratio that economists say historically has meant stable prices.

Historically, household income was the income of a single bread-winner. We've gotten into some trouble, here.



http://www.tennessean.com/apps/pbcs.dll/article?AID=/20080125/BUSINESS02/801250364/1003/NEWS01

[SpiralHawk]

16. This is just republicon family values

I am sure Commander AWOL Bush & republicon cronies will applaud his 'morality' for it follows their example...

[El Pinko]

5. Thank you for illustrating another aspect of the story.

The 4 paragraph rule is so annoying!

And yes, he's got a damn good point.

[hwmnbn]

6. Last night on 60 Minutes....

they talked about this phenomena where homeowners decide to stop making higher mortgage payments for houses that are going lower and lower in value. Bankruptcy, with all the ramifications, looks to be the smarter financial decision.

These are not isolated instances. They showed a map of a community (in Sacramento?) which had colored dots representing homes either in distress or foreclosure. There were a bunch of them everywhere and the real estate agent said the housing market there hasn't bottomed out yet.

[ordinaryaveragegirl]

10. They also mentioned Stockton...

Where many people took 100%+ loans from what turned out to be predatory lenders. Many of these people had their interest rate and payments jacked up after a year or two, and were in real danger. Some chose to walk away with bruised credit and a sizeable amount of money in their pockets, thanks to either cashing out at closing, or from pulling out equity when the market went up.

One sad story involved a couple who stayed, and ended up "upside down" in their home. They felt like it wasn't worth it to pay the payments, since they owed a lot more than the house was valued at. The wife stated that it was almost better for them to quit paying, and let the house go.

An analyst who Kroft interviewed said that so many of these loans were sold, and that some of the foreclosed properties didn't have a clear title. Because the loans had been split up many times, and packaged as securities funds, and it happened over and over, it is hard to trace exactly who holds the notes.

[sinkingfeeling]

7. Yeah, I'm thinking about adopting this guy's attitude with a twist. I've begun to

think the best thing I can do 'for me' is to sell my 150-yr. old historic house and all my belongings. Then I'm going to take my $500K profit and 'off shore' the money in the Caymans to avoid having to pay any tax on it. I'll manage to be fired from my current job so I can collect unemployment (sure hope they get an extension on that). That will leave me with just my retirement income check and I'll need a place to stay. So think I'll buy a nice home with zero down, make a payment or two, and then stop and let them foreclose. I'll stop paying on my single credit card debt and ignore any bills for medical care. Let's see, just by dropping all of my various insurance polices, I could save $575 a month.

Wish I could think of a way to get myself some more. Doubt if I can get down to the point where I'd be eligible for food stamps or other public assistance, but if you have any ideas on how to do it,let me know.

What we're beginning to see in the USA is a total breakdown in society. People who don't want to play by the rules. Don't want to carry insurance (fire, flood, car, etc.); people who don't want to pay taxes; and tons of folks who think that by not paying their legal obligations is A-OK. They run ads on TV all the time for how you can 'settle with the IRS for pennies on the dollar'; how you can 'restructure your credit card debt for pennies on the dollar'; and how to avoid taxes. Those of us with auto insurance get to pay for those who don't carry it and all homeowners pay additional and higher premiums after every hurricane or wild fire or flood. The squeeze on the middle class to pay for those who don't is killing us off.

[dysfunctional press]

18. you probably don't have to put the money in the caymans to avoid taxes...

you don't pay taxes on the profits of a home sale, up to $500,000 for married couples(lifetime limit), $250,000 if single.

[sinkingfeeling]

19. I'm single, so I would be liable for the tax.

[JBoy]

8. People are always free to make decisions on their actions

and they will suffer whatever consequences await them.

Banks used to protect themselves against people "choosing" to stop making payments, because they made sure the property owner had sufficient equity in the home that walking away would be a poor choice. The banks "chose" to break that rule, and now they suffer the consequences. Funny how it all comes together.

[jgraz]

9. Wow, how fucked would the upper class be if we just decided to stop giving them our money and labor?

This might be an easy way to start a quiet revolution. Just stop paying the fuckers.

[tnlurker]

11. Kick

[4_TN_TITANS]

12. Attitudes like his are why the country is a wreck, point or not.

The feeling that one can just walk away from committments and obligations are why the country is in the financial situation it is. I've never defaulted on any debt because our family LIVES WELL WITHIN OUR MEANS. Oh, we also keep our word when we promise to repay.

I don't buy the "okay, I was a greedy fool, but why should I suffer?" line...

[El Pinko]

14. I lived in SF during the bubble...

...I was CONSTANTLY being told by friends to "BUY NOW, or you'll get priced out forever". I knew it was a bubble and couldn't afford even the "low" subprime payments so I continued to rent, but many people were sucked into it by fear that it would be their last chance to affort a home.

Many people who bought were unsophisticated and ignorant of history (Google Florida housing in the 1920s)- they thought the prices would always go up forever and they could just refi.

The lenders and the financial houses who repackaged the debt - now they all had MBAs and PHds and no excuse whatsoever for what they did. A full 60% of ALL SF Bay Area mortgages in 2006 were subprime. I definitely think the lions share of the blame rests with them. The bubble wouldn't have been half what it was without the subrprime loans as a major driver of prices.

[NashVegas]

15. Only Because It's a Symptom That the Rot Has Spread On Down

From the top.

Corporations can wreak havoc and no one is liable.

Half the Bush administration is indictment-worthy and congress finds ways to repeal the laws they're breaking.

"Honor" is for wimps and suckers in 2008.

[eridani]

20. Bingo

Let the shitstain corporados start showing some responsibility first. After you, friends.

[DaveJ]

17. Lenders' credit worthiness algorithms are out of whack

Someone makes a mistake on a credit card or has a hospital bill and their lives are ruined, while people like this scam the banks for hundreds of thousands of dollars and they get to live the high life.