Strategic defaults on mortgages - chicagotribune.com
"Strategic default — opting to walk away from a mortgage you can afford — isn't a new phenomenon in the housing crisis. But with home values continuing to decline, more owners are finding themselves in a position where they may see it as a savvy business decision to destroy their credit rather than wait years for prices to recover."
--------------------------
This recovery is just storming along. I know--why don't we give more tax cuts to rich people?
3 comments:
When "Morgan Stanley Just Walks Away From Five San Fran Office Towers" (December 2009):
The properties were purchased from the Blackstone Group near the top of the market. Their values are now thought to have declined as much as 50%, according to Bloomberg. Basically, it looks like Morgan Stanley is acting like many homeowners with underwater mortgages—and just walking away.
the right-wing didn't bat an eye -- well, except to rationalize Morgan Stanley's behavior.
But from reading various internet forums over the past several years *, libertarians believe that individual homeowners should be prevented from making the same business decision as big corporations, and that all mortgages should be full-recourse mortgages (ie, in event of a foreclosure, the borrower not only returns the collateral, but is held responsible for the full value of the loan).
Whether that's a good policy or not is beyond the scope of this comment.
But the conservative and libertarian hypocrisy shows utter contempt for individual American home owners, while having long ago abandoned ideas of freedom and liberty in favor of corporatism.
* No, I'm not going to bother looking them up to provide links, so take my analysis with the appropriate dose of skepticism.
from the story (emphasis added):
Likier put almost 20 percent down to purchase a $312,000 townhouse in Westmont in 2006 and lived there until two years ago, when he remarried and bought a home in Chicago Ridge. For a year he rented the townhouse. When a change in rules at the community meant Likier's days as a landlord would end, he called his lender and asked if he could rework the loan, but he didn't have enough equity left to refinance the $240,000 mortgage.
It sounds like the HOA (or whatever) passed a rule that prohibited him from renting out his townhouse; which he had bought and lived in for two years but moved out of after he got married and bought a house with his new wife.
As someone who has rented out my residence every time I moved -- which helped pay for the old and new mortgage -- I empathize.
If HOA corporations can prohibit homeowners from renting out their property, then they can effectively hold homeowners hostage, since a homeowner unable to sell his house would effectively be unable to move out of the HOA.
Which is what conservatives and libertarians really want, even if they won't admit it to themselves.
But I have been assured by some guy named Brad -- "whose primary objective is freedom and liberty" -- that "HOA’s do not have the same capacity to screw up not only the lives of those living in such controlled neighborhoods, but the country as a whole" as labor unions do.
We're certainly not seeing a recovery in the residential real estate sector, which is continuing to experience deflation. I don't think the overall economy can be measured based solely on the performance of this market segment.
Post a Comment