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Posts Tagged ‘strategic defaulters’

By Percentage, The Rich Are Now The Number 1 Mortgage Defaulters

July 13th, 2010

According to this New York Times article: (Click here to read), the following is taking place:

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

The article goes on to say that only 1 in 12 below the million dollar mark is deliquent!

Okay, so perhaps the rich aren’t out on the streets… In fact, usually it’s a 2nd home or a rental property that they are delinquent with the payment…

The article states that the Rich are more ruthless. Actually first, I’m sure if “us, less than rich folks” had a 2nd house or rental property, we would consider unloading it too, especially if we were losing money on it.

Second, I think since the government is attacking this social class, they no longer feel obligated to do what is best for the economy or government. After all, they are being secretly or blatantly (depending on your viewpoint), attacked from the government. So why care, since they are being view as the bad guys anyway.

Mostly, I think they see it as a bad investment that no longer makes sense though.

I initially was going to write this post around the fact that strategic defaulters are bad, and I would take the high road and stick it out. But, since the 2nd home or rental property is really an investment… Now, I’m not so sure! I would like to think I’d do the right thing, but they are losing money on these investment, and the government is kicking them while they are losing that money…

Readers, what would you do if you have a 2nd home or rental property in a place like Las Vegas (where the value of homes have practically halved)?

-MR

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Posted in Mortgages

Tags: rich defaulters strategic defaulters

Loss of Honor, Walking Away From Your Mortgage

May 28th, 2010

I’ve had this title “Loss of Honor, Walking Away From Your Mortgage” stored in draft mode for over a month. I hesitated in writing it because I was torn between how the government was treating us (practically giving money way to first time home buyers) and that fact that to walk away from your mortgage is wrong.

Why is it wrong you say?

Because you entered a contract with the other entity. A contract is a contract and without it, American isn’t quite the same place. What if your house lost 40% of it value, you might ask? Well, I think that bites, but you still have a contract with your lender. And the right thing to do would be to continue to make your payment as planned. Besides, there is a good chance that your house might get some of it’s value back. From recent readings, house prices are starting to appreciate a bit.

As you can tell, I’m up on the old soapbox about this voicing my opinion, but I kind of feel like a hypocrite! I now own my house outright, so I no long have a mortgage payment, but that’s not why I feel like a hypocrite!

You see a very close friend has just did exactly what I’m saying not to do… He bought a bigger, better house, and walked away from the mortgage on the other house. He didn’t tell me directly, but his dad was upset and let it leak out to me. Needless to say, I was shocked!

Such an action that my friend preformed is called a “Strategic Default“. This is where a person can still afford to pay a mortgage, but instead walks away.

My view of my friend has already changed for the worse, I find that I don’t want to hang out with him, and make up excuses as to why we can’t hang out.

I hope that Strategic Defaulters realize that doing such a deed, will tarnish their image, and they may even lose friends, or have their friendships reduced (like I did).