patrick.net

Something is wrong with the credit score calculation: those who strategically defaulted once are far more likely to strategically default again. They may be good risks to issue a credit card to, but to issue another home mortgage?

Don't get me wrong, I'm supportive of people in under-water mortgages to walk away if they have family situations. Debt shouldn't function like slavery. OTOH, for those who do choose to default, there has to be a time-out period of perhaps 7 years, so they don't easily repeat the mistakes again, or induce more people to over-bid then default.

Call it Crazy says

Best of all, the ones actually paying their mortgages get to pay the penalty for these defaults in higher fees.... just great.....

Congrats.. and as Tip O'Neil said.."I am my brothers keepers".
Of course good ol Tip passed the bill to the rest of us to pay.

Call it Crazy says

Jump back in with a 3.5% down FHA, squat for years without paying... talk about a hell of a return on your 3.5% investment!!

Yep. There's no reason to be jealous when the option is also available to you. Why don't you do it and tell us how that works out.

Call it Crazy says

E-man says

Yep. There's no reason to be jealous when the option is also available to you. Why don't you do it and tell us how that works out.

Don't tempt me..... it seems to be the "in" thing to do these days....

How's your short sale purchase going? Have you checked unnderneath the house for termites?

Call it Crazy says

E-man says

Yep. There's no reason to be jealous when the option is also available to you. Why don't you do it and tell us how that works out.

Don't tempt me..... it seems to be the "in" thing to do these days....

I'm not sure it's the "in" thing, but there's a saying that "the grass is always greener on the other side." It'd be hella cool if you actually do it and report it back to us in the near future.

Good marriages are so passe. The banksters need deadbeats like whores need johns.

In 2007, I knew people buying another house, so they could walk away from the first one. I also know people that got foreclosed on in 2007, and were in another house before I bought in 2010.

I've never figured out how some people with the same or less resources than myself. Could always snap their finger than they land in a house.
Even before the bubble. I remember trying to buy a house, and the banks were cold and sour, to me. I guess it was because at the time I was a self employed flooring contractor. but even then, often I made more money than people that got mortgaged for houses greater than what I was even considering.

RE developers default all the time, and are able to get financing. Why not people?

Reality says

Something is wrong with the credit score calculation: those who strategically defaulted once are far more likely to strategically default again. They may be good risks to issue a credit card to, but to issue another home mortgage?

It's an awesome idea.

A bank collects its mortgage origination fee, some agents get sales commissions, a GSE buys the loan and repackages it as a mortgage backed security, the fed buys the MBS, and a servicer gets paid as long as the fed keeps interest rates artificially low so property values increase thus discouraging default.

Profit for three industries!

Another foreclosure means banks and agents get paid again, and recurring revenue is even better than one-time sales!

Keeping this going is also good for congress critters like Senators who spend $1.7M/year ($10.5M average successful campaign cost for a 6 year term) to get a $174K/year job with the arithmetic working due to groups like PACs.

The real estate agents' PAC has ranked first in campaign contributions to candidates for every election cycle since 1998 (that's as far as the opensecrets.org records go). The banks and home builders aren't lightweights either.

Privatizing the profits, socializing the losses, and screwing the people is the American way.

drew_eckhardt says

Privatizing the profits, socializing the losses, and screwing the people is the American way.

Yeah, the problem is that the US has moved to an instant gratification scheme for conducting business, i.e. fees are collected upfront with the benefiting parties exiting the trade as early as possible and relinquishing any responsibility until the losses pile up at the government or at some TBTF institutions which will get bailed out. It is prevalent these days and very comparable to a ponzi scheme.

mell says

Privatizing the profits, socializing the losses, and screwing the people is the American way.

Yeah, the problem is that the US has moved to an instant gratification scheme for conducting business, i.e. fees are collected upfront with the benefiting parties exiting the trade as early as possible and relinquishing any responsibility until the losses pile up at the government or at some TBTF institutions which will get bailed out. It is prevalent these days and very comparable to a ponzi scheme.

Deficit spending (counterfeiting) by any other name is still money laundering.