Comments on: The New Housing Watchword: "Re-default"

By: Bert

Bert — Wed, 10 Dec 2008 15:42:14 +0000

There is plenty of blame to go around, not the least of which is the self-imposed ignorance, greed, and entitlement on the part of borrowers. The ultimate buck should stop with them. Even in light of fraudulent marketing, sales, and lending practices, borrowers agreed to loans for homes they otherwise would not have dared dream of owning.

When we bought our second home – an upgrade for us – the lender commented right before closing that we were “buying poor” (industry lingo for buying much less home than our financials afforded us)…like it was some kind of stigma to have a healthy sense of price point for a home and stick close that budget.

Fraud aside (and there’s plenty of that, too), it doesn’t take a rocket scientist to do the math when any number of people, on any number of occasions throughout the loan application/approval process, put a financial worksheet or contract information in front of these allegedly innocent borrowers and announced/explained their monthly mortgage obligations.

This slipper slope was long in the making. Despite pleas of ignorance, this scenario has been the financial elephant in many rooms for a long time – from mortgage branches and banks to the halls and secret decoder ring wheeling dealing rooms of Congress.

It is time for all involved to pay the piper, including hefty restitution and siezure of assets of the chief executives of involved companies and public hearing of Congressional figures. I am insulted when an involved CEO so graciously donates his annual salary to ‘the cause.’ Hello?!?!?!!!?? One year of salary for these folks is a mere drop in the bucket compared to the millions (possibly billions) they have already banked via their actions or mismanagement. It is nothing more than a hollow PR prank that might sting a little, but means nothing in the larger picture.

The American people should not burden themselves with a single red dime more in purported bailout funds, which are clearly are not working and amount to nothing more that good money going to bad – bad (or stupid) people, bad business models, and practices!

By: Tim McNally

Tim McNally — Wed, 10 Dec 2008 14:45:18 +0000

I’m waiting for Barney Fife & Christopher Dolt to suggest we just give the homes to those who re-default.

By: Andy K

Andy K — Wed, 10 Dec 2008 13:29:55 +0000

I have heard several times that most of these people in reality by not putting any of their own money down and making interest only payments are only renting. This is a very true statement except for one small detail. When that house ages and they need a new roof or driveway or any other home repair it is going to be their responsibility. If you cant make the payments how are you going to make improvements. Then in time the home falls apart and then we get lower property values because of neglect. Its sad to see someone loose their home but in reality its not their home.I dont know the right answers but just putting a band aid on a amputated limb you are still going to bleed to death. Most of these home owners need to not only look whats best for them now, but what is better for them later on. And of coarse the ones of us that did put some of their own money down and continue the upkeep and make our payments (even when some months are tight and we could use the money elsewhere) will pick up the bill for the rest of the market. And just to add I am tired of hearing the statement well they bailed out the banks, auto ind, ect so wheres my bailout. STOP IT . We shouldnt feel that we all deserve a bailout. Pull up our bootstraps America. Get out of the way Washington. Let the people do their jobs and and we will be fine. Its hard to enjoy success when you have never suffered failure.

By: The New Housing Watchword "Re-default" - ThePHINS.com - Miami Dolphins Forums

Tue, 09 Dec 2008 23:40:47 +0000

[...] The New Housing Watchword: “Re-default” at The Brian Sullivan Blog After three months, nearly 36 percent of the borrowers had re-defaulted by being more than 30 days [...]

By: Steve Garmin

Steve Garmin — Tue, 09 Dec 2008 23:39:01 +0000

The surprise is from Congress that some how believed that sub-prime was the wave of the future and that if it failed then it was not low enough. What we are experiencing in California was a consumer who had no chance to afford the “Dream Home”. Realtors and brokers lead them into this mess, then the easy credit cards and lending finished them off. Wht can we not let them default, and let the market drive the housing industry?

By: Joe Knebel

Joe Knebel — Tue, 09 Dec 2008 23:10:02 +0000

Perhaps they are re-defaulting because THEY DON’T HAVE ANY MONEY! Doesn’t matter what sort of “adjustment” they get; no money, no mortgage payment. Simple.

By: Bryan

Bryan — Tue, 09 Dec 2008 22:13:35 +0000

This is easier to understand than those trying to explain “an easy reason” here.

It’s called stupidity. Period. You signed the contract, you were supposed to read it. If you didn’t, you are STUPID. Period. You gambled and lost.

By: Freddie Beau

Freddie Beau — Tue, 09 Dec 2008 18:30:20 +0000

The reason for the defaults in the first place are over infalted prices. A house is A PLACE TO liVE. The problem started when they started being used as investments for the homeowners and the banks. Stop selling mortgages as securities and over inflating a houses worth for money making purposes. The mortgage mess is a fallout of this practice.

By: Mo Voter

Mo Voter — Tue, 09 Dec 2008 14:13:51 +0000

Is it really a suprise to anyone that people who bought more house than they can afford, defaulted on the loan because they had not made even a minimal down payment, and got refinanced to get the PRINCIPAL lowered, would default again? These irrepsonsible people would never have been allowed to get a mortgage in the first place if the banks hadn’t been strong armed into it by groups like Acorn and liberals in congress. Irresponsible people will continue to be irresponsible unless forced to face the consequences of their actions.

By: Ted Sherman

Ted Sherman — Tue, 09 Dec 2008 02:36:47 +0000

You can not have people who know nothing about banking fix or start a banking career. It is true that the people who received the mortgage bare the brunt of the mess we are in; however the bankers have a fiduciary duty to its depositors. It is immaterial how much money was or is in an economy or has the lowest interest rate the banker has a duty to protect the money that is entrusted to them. No banker of Mortgage Company should be lending money to people who they know can not pay it back in 5 years let alone 30 years. It is time that the people demand that the people save guarding their money have a basic knowledge of what, when, and how banking fits into our society and community.

When bankers do their fiduciary duty no one who can’t afford a mortgage, car, home equity, or credit card gets one. It does not take a financial wizard to understand that if you know someone cannot afford a 30 year mortgage (where the interest compounded is almost as much as the mortgage) selling it off does not erase your duty to your community. A trained monkey knows that if one person in a area defaults on their mortgage the whole area losses value, which means that tax rates on the property will either fall or be overly burdensome. If the taxes collected drops then basic services will have to be cut back hurting the community, county, and state. If you understood banking you know that and not make NINJA loans, or sub-prime loans. DAH!!!!!!!!!!!!!!!!!!!