It's called being personal responsibility. Probably still cheaper than rent.

nekom: Bigdogdaddy: It's called being personal responsibility. Probably still cheaper than rent.

It's called acting in your own best interest. Sometimes that includes paying your mortgage, sometimes that includes walking away. Fark the bank's interest.

Sometimes keeping your payments are in your own best interest. Your credit rating affects everything, employment, insurance, car loans...everything. It could cost more in the long run and might be smarter to sit on it for a few years. You never know what might happen.

If only people would walk away. I would love to see the houses that people aren't paying their mortgage go back on the market.

Rustico: Bigdogdaddy: Sometimes keeping your payments are in your own best interest. Your credit rating affects everything, employment, insurance, car loans...everything. It could cost more in the long run and might be smarter to sit on it for a few years. You never know what might happen.

This is the more accurate of your posts. Personal responsibility really isn't an issue in most repos. In many states, the bank (who wrote the contract) said they would accept your money or your house as repayment. You get to chose. The terms have already been set. If it doesn't make sense to keep pouring good money after bad, then don't.

And, it depends if you're in a state if they can come back on you for the difference. In that case, it wouldn't matter if the bank chose to do that. I also read somewhere (and no I don't have a link) that if you refinanced your house to pay off credit cards, you could be in a bigger mess. There are a lot of facts to consider.

LadyHawke: The home I bought was foreclosed on. Would not have been able to afford it otherwise.

Same here. A similar property(townhome community) with the same space and floor plan was selling for 20,000 more then what I bought my place at.

dustman81: and most employers will shred and burn your job applications.

Other than for fiduciary positions, how can this stay true with so many people getting damaged credit from this recession?

Especially for the strategic defaulters, FICO has little to do with job performance, so are employers really going to pass on otherwise good talent for that?

Not that I'm complaining since I thankfully don't have that problem. Although since I'm an IC nobody checks my credit for a job, and it isn't their goddamned business anyway.

dustman81: most employers will shred and burn your job applications.

Not so sure about that. A decade ago a DWI on your record would of resulted in a non-hiring. Now most background checks specifically tell you to exclude driving related misdemeanors or just don't look for them at all (because everyone and their half-brother has one on their record now). If a large percentage of potential job applicants have bad credit due to the recent mess - employers may start ignoring it more than they presently are or at least allow you to explain yourself.

/unless you are looking to work for a financial institution

"billions of dollars that might be used for other forms of consumer spending"

Ummmm...I thought that rampant consumer spending got us into this mess. When will they ever "get it?"

Some relative (by marriage, no name in common) has stopped paying their mortgage with B of A. Somehow, our phone number got associated with the paperwork, and B of A started calling us every evening! From the very beginning of each call, they'd be all over me about "the problem with your mortgage." My insistance that I haven't had a mortgage in 10+ years fell on deaf ears, they just kept after me. After a few minutes of this, the light would go on in their heads and they would finally ask me, "Is this (insert name of deadbeat relative)?" Night after night, it was an Emily Latella moment: "Never mind."

bravian: A decade ago a DWI on your record would of resulted in a non-hiring. Now most background checks specifically tell you to exclude driving related misdemeanors or just don't look for them at all (because everyone and their half-brother has one on their record now).

Isn't DUI a criminal charge, not a misdemeanor?

I recently didn't disclose mine (19 years ago, not my finest moment) because I was acquitted of the criminal charge (yet still subject to the administrative penalty)... I still got the job.

Shocktopus: Especially for the strategic defaulters, FICO has little to do with job performance, so are employers really going to pass on otherwise good talent for that?

Comes into play where there are high levels of accountability and/or some level of security clearance as well. Low FICO score/recent bankruptcy is a strong indicator of weak finances or poor financial skills, which can lead to taking risks/bribes/etc. to get yourself out of a tight spot.

I just pulled that out of my ass. Let's see if anyone notices.

thenateman: Isn't DUI a criminal charge, not a misdemeanor?

"Misdemeanor offenses carry penalties that are much less severe than felony charges. The majority of DUI offenses are charged as misdemeanors and penalties often include community service, significant fines, court-ordered rehabilitation, and more.

However, felony DUI charges do apply in cases in which an individual suffers injury or death in an accident involving a drunk driver (blood-alcohol concentration level is over 0.8% in California). DUI felony charges can also be brought against an individual if a drunk driving-related accident resulted in extensive property damage. A DUI felony conviction carries severe consequences including hefty fines, imprisonment, and more. "

Link (new window)

NIXON YOU DOLT!!!!!: thenateman: Isn't DUI a criminal charge, not a misdemeanor?

"Misdemeanor offenses carry penalties that are much less severe than felony charges. The majority of DUI offenses are charged as misdemeanors and penalties often include community service, significant fines, court-ordered rehabilitation, and more.

However, felony DUI charges do apply in cases in which an individual suffers injury or death in an accident involving a drunk driver (blood-alcohol concentration level is over 0.8% in California). DUI felony charges can also be brought against an individual if a drunk driving-related accident resulted in extensive property damage. A DUI felony conviction carries severe consequences including hefty fines, imprisonment, and more. "

Link (new window)

You're right, I didn't know what I was talking about.

Even in Arizona, where television tells us we have the "strictest DUI laws in the nation," First and second offenses are considered a Class 1 Misdemeanor. Effective September 21, 2006, three offenses received within 84 months (seven years) is a Class 4 felony.

For a first offense, the penalties are:

* 10 days in jail (court may require only 24 hours with drug/alcohol evaluation and completion of mandatory treatment program)
* Fines and costs exceeding $1,500
* 90-day driver's license suspension (30 days no driving, and restricted license possible for the remaining 60 days)
* Ignition interlock on car for 12 months after license reinstatement
* Probation up to 5 years, possible community service
* Possible impoundment of your vehicle

/The ignition interlock costs more than $1,000
//Glad I moved walking distance to the bars

NIXON YOU DOLT!!!!!: Shocktopus: Especially for the strategic defaulters, FICO has little to do with job performance, so are employers really going to pass on otherwise good talent for that?

Comes into play where there are high levels of accountability and/or some level of security clearance as well. Low FICO score/recent bankruptcy is a strong indicator of weak finances or poor financial skills, which can lead to taking risks/bribes/etc. to get yourself out of a tight spot.

I just pulled that out of my ass. Let's see if anyone notices.

That's true, actually. I've had several friends get their security clearance, and whenever the investigator from the Office of Personnel Management interviewed me, they always asked if the person had any financial/credit problems.

NIXON YOU DOLT!!!!!: Shocktopus: Especially for the strategic defaulters, FICO has little to do with job performance, so are employers really going to pass on otherwise good talent for that?

Comes into play where there are high levels of accountability and/or some level of security clearance as well. Low FICO score/recent bankruptcy is a strong indicator of weak finances or poor financial skills, which can lead to taking risks/bribes/etc. to get yourself out of a tight spot.

I just pulled that out of my ass. Let's see if anyone notices.

Sourced rectally or not, you've pretty much hit it on the head.

Shocktopus: Other than for fiduciary positions, how can this stay true with so many people getting damaged credit from this recession?

Because there's 20,000 on-paper-qualified applicants for every job you post. Setting a (admittedly irrelevant and arbitrary) bar of 720 or 740 (employers don't get the actual score, but some HR departments use a reverse-engineered system) is one way to cut that down by more than half.

MogKupo: That's true, actually. I've had several friends get their security clearance, and whenever the investigator from the Office of Personnel Management interviewed me, they always asked if the person had any financial/credit problems.

I have a friend who "walked away" from his McMansion 20 miles south of Phoenix. He was almost $200k upside down, so he bought a much nicer house closer to town, walked away from the old house in the 'burbs and accepted that he'd have 7 years of bad credit.

I'd say he has no financial/credit problems... because he was smart enough to walk away from a bad investment.

Lawnchair: Shocktopus: Other than for fiduciary positions, how can this stay true with so many people getting damaged credit from this recession?

Because there's 20,000 on-paper-qualified applicants for every job you post. Setting a (admittedly irrelevant and arbitrary) bar of 720 or 740 (employers don't get the actual score, but some HR departments use a reverse-engineered system) is one way to cut that down by more than half.

They don't order a credit check until after they've done some interviews. At which point, shouldn't they hire the people they like rather than the people with the best credit score?

nekom: It's called acting in your own best interest. Sometimes that includes paying your mortgage, sometimes that includes walking away. Fark the bank's interest.

More people should understand this, especially Fark Independents™. No one moralizes against banks working to maximize their CEOs' (and sometimes their shareholders') profits. "Personal responsibility" only applies to the average schmuck, not to the banksters who were bailed out yet continue to ruin the economy, steal average schmucks' homes, etc.

Large banks are walking away from their commitments left and right, because it makes financial sense. Not doing so would get them sued by their shareholders. But people are often far less rational, they always believe they are above average, etc.

Bigdogdaddy: It's called being personal responsibility. Probably still cheaper than rent.

It might be called being personally responsible, but it definitely isn't called being personal responsibility. Think before you write. If you're going to spit out key phrases, think about them at least enough to use them correctly.

As to the content of your post, the most responsible decision a person might make for their own future and for their family's security may not be continuing to pay on an underwater mortgage. One is personally responsible for oneself and one's dependents; one is not personally responsible for the welfare of one's mortgage lender. Moreover, the thesis of the article was that continuing to pay the payments on an underwater mortgage may not even be the most responsible thing an individual can do with respect to society and our shared economy. Finally, paying mortgage payments and owning a home is not cheaper than rent for the person whose home is underwater. Someone who buys in now may indeed have a mortgage payment less than rent for an equivalent property, but someone who bought in at the peak of home prices will not.

But yeah. It's called being personal responsibility.

I don't see the logic of staying with a mortgage if you are hundreds of thousands of dollars underwater. You might say it's somehow dishonest, but the 23 trillion dollars in damage the banks did to the economy, without a single prosecution or conviction. . .fark the damn banks. Let 'em lie in the bed they made

.

jedimk: If you get into banking HR weeds out the people with bad credit before they would waste time talking to them.

I have two copies of my credit report within hand reach from Banks looking into my credit history because I have been applying for a job.

I'm sure this creates many jobs in HR, but does it really add value to the company?

Credit checks should be a final investigation to root out crime/fraud/liability... But only after you've found the best candidate.

What's their theory, that someone who declared bankruptcy can't be trusted to process TPS reports?

dustman81: Other than absolutely destroying your credit for the next seven years

It takes about four years to repair your credit after a foreclosure. Also, even when you do owe the difference between what you owe and what the bank got from selling your property, you will usually end up paying only a percentage of that. A bankruptcy does take longer, but it may not be necessary if the difference is all a person owes.

bubbadave1056: Ummmm...I thought that rampant consumer spending got us into this mess.

Where were you reading that rampant consumer spending was the cause of the mess? That's a conclusion I haven't heard before.

grimnir: Moreover, the thesis of the article was that continuing to pay the payments on an underwater mortgage may not even be the most responsible thing an individual can do with respect to society and our shared economy.

It's not. Effective price discovery and the fact that there is just too much housing stock out there, and typically in the wrong parts of the country, means all these programs keeping people in houses where they're underwater and will continue to be so through this decade means we're delaying the painful adjustments needed to get us out of this malaise. Mobility of labor and capital and all that; Insert band-aid analogy here.

bubbadave1056: I thought that rampant consumer spending got us into this mess.

Consumer spending fueled by debt may have, but spending in and of itself? No. That bit's A-OK so long as you can, you know, afford the purchases. Too many people spent too much money they did not have to fund a lifestyle they could not afford, and that's part of what got us into this situation.

hurdboy: thenateman: What's their theory, that someone who declared bankruptcy can't be trusted to process TPS reports?

It starts with being late on that equity line of credit, then you're into putting the wrong cover sheet on, then baby kittens are being killed.

Can never be too safe about these things.

Probably because someone with bad credit who can't handle their finances is more likely to do things like take customer data and sell it, commit identity fraud, embezzle funds, moonlight on the job, etc.

It's not the TPS reports that are a concern, but I think it's reasonable that if you were in a position that required a high level of security/trust/access to information/funds that a credit check isn't entirely unreasonable.

Clarence Potter: bubbadave1056: I thought that rampant consumer spending got us into this mess.

Consumer spending fueled by debt may have, but spending in and of itself? No. That bit's A-OK so long as you can, you know, afford the purchases. Too many people spent too much money they did not have to fund a lifestyle they could not afford, and that's part of what got us into this situation.

That also leads us to the situation that our consumer economy cannot be supported by the wages the majority of the populace is paid. Sadly enough, one of the solutions not being pressed is a general raise in wages to support the consumer economy we have, resulting in a general malaise where we want people spending but not to give them the money to spend it.

America in a nutshell.

I think a lot of people are firmly convinced that the price increases of 2003 - 2007 are coming back soon. It's going to take a while for it to sink in for most of them that their money is gone, it never existed except on paper, and they are going to have to take a loss. Moody's analysts says that, in the BEST case, prices in 2013 will be the same as they are today. If we have another recession, we won't see today's prices until 2015 at the earliest. That or we have hyperinflation, which the Fed is praying for.

I have no intentions of giving up my home, but in some situations, I can't really blame other people for doing it.

I didn't read any of these other comments, so forgive me for duplication.

Has it occured to the author of this article that maybe the whole concept of bigger and better is an endless trap, and that trying to reinflate the housing bubble is pointless? One couple in the article was hoping to UPGRADE from a 430-K home?

I like to think that most Americans are smart sensible folks, but Jesus on a cracker, don't you know that most of the rest of the world lives their lives in modest dwellings with modest items and they are just fine? Who the hell convinced us all that we need to have a home twice the size of the Brady Bunch home for half (or fewer) the number of kids?

Simplify people!!! I have a small three bed one bath home, and we are not dying. We are happy and satisfied.

Stop buying so much crap so that you need endless home space to store it. Consumerism must die. Put a stake through its heart. Buy what you need and need what you buy. The rest is waste.

Wife and I are debating. The house is only in my name so I could file for bankruptcy without it really effecting her. I have a car that will hold for long enough to save for a new one with some of the savings from walking away. Its come down to part that we have fond memories here and we don't want to move in with either of our folks.

FTA: They're unlikely to redecorate or upgrade the kitchen either, as millions of families were doing before the recession - more potential losses for local businesses, not to mention the car dealers, clothing and consumer electronics stores and manufacturers of the products that the Hineses won't buy.
In other words, being responsable is wrong? Ruin your credit and buy shait you won't have a place to keep it in anyway.

minnesotaboy: I didn't read any of these other comments, so forgive me for duplication.

Has it occured to the author of this article that maybe the whole concept of bigger and better is an endless trap, and that trying to reinflate the housing bubble is pointless? One couple in the article was hoping to UPGRADE from a 430-K home?

I like to think that most Americans are smart sensible folks, but Jesus on a cracker, don't you know that most of the rest of the world lives their lives in modest dwellings with modest items and they are just fine? Who the hell convinced us all that we need to have a home twice the size of the Brady Bunch home for half (or fewer) the number of kids?

Simplify people!!! I have a small three bed one bath home, and we are not dying. We are happy and satisfied.

Stop buying so much crap so that you need endless home space to store it. Consumerism must die. Put a stake through its heart. Buy what you need and need what you buy. The rest is waste.

Be careful what you wish for it may come true.

From the current state of contracting jobs and disappearing middle class, we might not have a choice about this.

These huge losses are paper losses, unrealized losses - not actual or realized losses until somebody actually sells one of those underwater houses. Yes - they are stuck if they are underwater and can't re-fi. But they haven't suffered any losses unless and until they sell or walk. If they continue making payments, that payment amount is exactly the same as it was prior to the housing bust (assuming fixed rate, etc). How exactly is the homeowner purchasing less if they are making the exact same mortgage payment that they have always made? If the author is suggesting that people walk so they can frivolously buy and consume, then the author is a moron. Author completely ignores consequences of bad credit history due to walking from an underwater mortgage. Has author ever owned a home? I seriously doubt it.

/stupid article is stupid.

Incontinent_dog_and_monkey_rodeo: Large banks are walking away from their commitments left and right, because it makes financial sense. Not doing so would get them sued by their shareholders. But people are often far less rational, they always believe they are above average, etc.

About being average ... you can only compare two 1-dimensional numbers. For 2-dimensional and higher, there is no unique greater than, average or less than. There are infinite ways of turning higher dimensional numbers to 1-dimensional numbers or projecting for comparing and calculating averages.

People have thousands of dimensions and there infinitely many ways to calculate averages by.

It is not a stretch to say that most people are above average in some projection. Unless we have some standard projection like an IQ test score or total net worth or whatever, everyone knows if they are above or below average. Almost everyone is above average if they get to choose how the average is calculated.