lets get together and all not pay our mortgage for the next 6 months and threaten to hand over the keys or better yet mail them all in to the white house.
We could organise it as MOVE ON.org

wait that name is taken…. i know we will call it the :

NATIONAL DAY OF DEFAULT.

Where we all stand up to the lenders and say
“go ahead take my house”

Imagine if we can get half the homeowners to do this….the lenders would have to respond with modifications to avoid a complete collapse of the system.

who’s with us??

You know it turns out that we really see quite the same thing, although the lenders have been reluctant to do much of anything as it is my belief they are waiting for government intervention themselves.

I understand the magnitude of this problem. As to the solution, the banks must write-off a portion of the mortgage balance for homeowner’s who are unable to make their payments. The only problem with doing this is that it is a moral hazard, and some time in the future, if this cycle repeats itself, it will allow banks (that are federally insured) and homeowner’s to try and use the same tricks to get themselves out from under after making poor decisions.

My hope is that some banks will fail for allowing their underwriting standards to become irresponsible, and homeowner’s that chose loans that were too expensive for them will either a) sell their home or b) walk away from the home, and allow the bank to take them back. Unfortunately, the government will not allow this to happen, although this is what happens to all businesses that fail. The term is called “creative destruction”, and it happens every day in corporate America. Companies fail due to a plethora of things: competition, poor customer service, and products that don’t meet customers’ needs. It is a sad thing that our country has become only a service economy, and it looks like the financial “shell game” is up, now it is time to come up with some solutions out of this mess (see above). Good luck to you.

You make an interesting point with your facts. The one important item that you fail to address is that NO ONE IS REQUIRED TO BUY A HOME. You can blame our government for everything if you want to, but at the end of the day, the government is not signing your loan documents.

Of course, there is corruption within governments. If you have travelled around the world at all, you might notice that our system is probably the least corrupt in the world. Do you honestly believe that a Democratic Congress and President will be any less corrupt than a Republican Congress or President?
What facts do you have to make this claim?

Each American has to take personal responsibility for the situation they are currently in. They must sell their homes if they can not afford them. If the mortagage is worth more than the home, than they must make a business decision on whether they should allow the lender to foreclose on them, or choose to keep making payments on a depreciating asset. The consequences of foreclosure are an impaired credit record for several years’.

Americans need to start SAVING instead of SPENDING money they don’t have. This will be a bitter pill to swallow, however, unless we would like to live in a Socialistic style society, this is what must happen. The alternative is to have a society in which there are no incentives to work harder or achieve success.

You should have a look at some other countries such as the former Soviet Union, Cuba, and North Korea as examples of what happens when the power is taken away from the people.

I would like to hear your response.

1. You are blaming others. You claim that financial engineers created this problem. You are incorrect. They may have facilitated it, however, it was created by people who were either: a) misinformed b) incredibly naive c) just plain ignorant.

2. My relationship to this mess is that I purchased a home in 2004, and took a loan out that I knew I could afford, and I am incredulous at the amount of irresponsible people who put themselves into a position in which they could not help themselves. Now, the responsible home buyer’s (which there are many) find themselves in the position that they will have to “bail out” the irresponsible ones (not all are irresponsible, however, I would venture to guess that about 95% of these situations are due to the above-mentioned type of buyer)

3. The only exit strategy that I see for the economy is to bail out these people. Unfortunately, this will take years’ to unwind. My solution would be for the banks to “write down” the debt level by 25% for homeowner’s who can prove that they can not afford the payment on their homes. This way, people can stay in their homes, the values will not fall as quickly as they have been, and the bank’s are penalized for making the loans to easy to qualify for. However, at least they will have some value to their asset (the mortgage), rather than zero, which would be the case if the buyer walks away from the property.

This seems to be the only alternative on a macro scale to deal with this problem. The larger issue is that American’s have a net zero savings rate, our government and the people (the people modify their behavior from the government) are up their eyeballs in debt, and many in our country think that homeownership is a “right”, not a privilege. That is the reality in which we live in. I do enjoy bashing people that don’t take financial responsibility for their decisions. I would recommend you read the book “Rich Dad, Poor Dad.” It might be helpful.

“Finance Professionals” was your term used above, I just borrowed it from you. I’m not blaming anyone – you’re doing the blaming. I’m trying to find solutions, and the one you recommend also requires the approval of the lender. Your points are skewed and you offer credible observations, no solutions, and like to point fingers.

What is your relationship to this mess?

Are you involved or do you just enjoy bashing homeowners?

I understand your situation, and I do feel sorry for you. Unfortunately, it is the exact same situation that occurred in 2000 when people purchased stock at the peak, and then saw prices drop 20%. Many people thought that the prices would come back, so instead of making a nice profit, they became greedy, and when the prices continued to fall, they lost everything. My advice to you is to sell your property NOW. Granted, if you walk away, the lender can not go after your personal assets, however your credit will be ruined for several years’.

You are blaming this whole mess on “financial professionals.” The reality of the situation is that you purchased an over-priced asset at the peak of the market, and you can not service your debt (or you are choosing not to). It is really that simple. If you continue to blame the “system”, you will continue to be burned by that system. The lesson to be learned is not to purchase a home in which you cannot afford the monthly payments, or are not clear about the terms of the loan. Unfortunately, we will all have to pay for this mess of “easy lending” terms, and buyer’s that did not make intelligent choices. Instead of wasting time blaming the system, you might want to make some wise moves to put this debacle behind you.

It is very easy for you to blame the borrower only,and that is part of the problem.

I am not saying that there are those borrowers who are completely at fault, Like the ones that purchased homes to flip them for a profit or cash out as much as possible.

Look in the mirror, did you know that there were developers that would buy some of the homes cash in their community at higher a much higher price to then turn around and be able to sell the rest of the project at higher prices. The appraisal pushed them toooo. the Realtors did the same thing. The mortgage brokers & lenders also…

I do feel bad however for the borrower that was manipulated and misled to purchase the loan. I for one did not understand my initial paperwork, much less the closing documents(100’s & 100’s of pages) with lingo I could not understand, so I asked my broker to explain the program & he BS his way through it I know now. the Title company could not even understand half of the closing package. So I was asking the “Professionals” for advice & I have heard & heard again this brokers & lenders at lunches stating how they tell the borrower just enough to sign , or do not divulge information.

The borrower is not to blame on this BS products & subprime loans. It is the bank & others who profited grately while looking the other way, when they knew full well half of those loans would die within the first 2 -3 years. You all know who you are !!!!!!! They would even tell the borrowers – look no points up front — (without telling them they are givig them a much higher interest rate to make their money on the YSP).

So YES i do believe there are many people suffering due to this crisis, everyone is to blame. But we need to find solutions.

here is an idea lets redo all the loans and give everyone the prime rate fixed for 30 years. no pre-pay, no BS charges on all the existing loans. …. Better yet why doesn’t CountryWide go through each loan and make the necessary adjustments so people can continue to make their payments and keep their homes?
Crazy concept, but I think it is better than telling a homeowner to not pay and lose their home to foreclosure & be on the street with their family. That sucks. The economy is way too f***ed up right now. Recession, Foreclosures, gas prices keep increasing the price of food & gas keeps increasing.. the sales taxes, irs taxes keep going up…. but our income does not. When we bought our home we did not forsee these increases and the decline in property value….
our DTI (debt to income ratio) is completely out of wack compared to last year.