patrick.net

klarek says

Hamstrung by the state, not much they can do about that. States that are pro-deadbeat when it comes to houses (non-recourse) also tend to not be right-to-work states. Makes sense.

Hamstrung by their stupidity, more like. The state didn't make them give no down payment loans. Or negative amortization loans.

klarek says

States that are pro-deadbeat when it comes to houses (non-recourse)

I'm not quite sure why you're against no-recourse loans. Most commercial real estate, in every state, is non-recourse by the fact of it being owned by a corporate entity. As is all corporate debt. Lenders in these situations never have recourse beyond legal claim to the collateral (the building in commercial real estate, the assets of the company with a corporate loan).

Better to do a buy and bail. (reverse of walk away, squat, wait for sheriff....you buy THEN default on old home before credit is wrecked). Of course consult attorney first...

I'm certain they will, if they don't already. Wouldn't the "shadow inventory" necessitate that these homes need to be sold? The banks know the difference between credit criminals and the victims of their stupid financial "instruments".

I can see the commercials already in my head, "Bank of America knows that the recent recession has caused....that's why we here at Bank of America.....".

And there will be wailing and gnashing of teeth when those who walked (but had otherwise perfect credit, and continued to pay their OTHER bills on time) get "the same deal as those who didn't".

CL says

The banks know the difference between credit criminals and the victims of their stupid financial “instruments”.

Exactly.

I predict you'll be complaining about its fairness when they do exactly that.

They will lend, but they'll also jack up the rates require down payment of his left nut, and request every financial anal probing there is before approving.

Hahaha. I don't care. The banks are into usury....they need consumers to borrow, borrow, borrow, and people like me represent future dollars to them.

They will forget, of course they will. They won't reject future profits because they screwed up before.

CL says

Hahaha. I don’t care. The banks are into usury….they need consumers to borrow, borrow, borrow, and people like me represent future dollars to them.
They will forget, of course they will. They won’t reject future profits because they screwed up before.

....because banks know risk is not on them...it is on tax payer....that can change if people revolt against government bailout of banks, until then people like you will always be there in the home buying equation(no offense particularly to your situation)

MarkInSF says

I’m not quite sure why you’re against no-recourse loans.

It gives deadbeats a free pass and it's govt impeding on risk management. In fact, it increases risk, as is evidenced by the large numbers of people strategically defaulting.

CL says

I’m certain they will, if they don’t already. Wouldn’t the “shadow inventory” necessitate that these homes need to be sold? The banks know the difference between credit criminals and the victims of their stupid financial “instruments”.

They give you $750k, and you think you're a victim. You plan to stiff them, but think they're going to feel compelled to give you another massive loan to clear their books. You sir are quite the self-pitying, self-serving delight!

CL says

And there will be wailing and gnashing of teeth when those who walked (but had otherwise perfect credit, and continued to pay their OTHER bills on time) get “the same deal as those who didn’t”.

Keep hoping that happens. Deadbeats that strategically default are a tiny portion of the overall populace. You can go rent in Shitville the rest of your life and nobody would ever notice or care.

CL says

Hahaha. I don’t care. The banks are into usury….they need consumers to borrow, borrow, borrow, and people like me represent future dollars to them.
They will forget, of course they will. They won’t reject future profits because they screwed up before.

Given your history of screwing them out of hundreds of thousands of dollars, they most certainly WILL reject people like you. If they're going to ding somebody for missing a $100 credit card payment, you can bet they're going to brand strategic defaulters as "never loan money to this p.o.s. deadbeat" to minimize risk.

Mr.Fantastic says

People like CL are basically a big drag on the economy.

They're a poison to society. Learned deadbeats.

klarek says

It gives deadbeats a free pass and it’s govt impeding on risk management. In fact, it increases risk, as is evidenced by the large numbers of people strategically defaulting

Not really. It should cause banks to stop giving loans when houses are overpriced and stop bubbles from forming.

tatupu70 says

klarek says

It gives deadbeats a free pass and it’s govt impeding on risk management. In fact, it increases risk, as is evidenced by the large numbers of people strategically defaulting

Not really. It should cause banks to stop giving loans when houses are overpriced and stop bubbles from forming.

You mean like how it prevented the housing bubble from forming in CA? LOL.

I didn't know living in an overpriced underwater house has the same affect on your reasoning as smoking crackpipes.

Serpentor says

tatupu70 says

klarek says

It gives deadbeats a free pass and it’s govt impeding on risk management. In fact, it increases risk, as is evidenced by the large numbers of people strategically defaulting

Not really. It should cause banks to stop giving loans when houses are overpriced and stop bubbles from forming.

You mean like how it prevented the housing bubble from forming in CA? LOL.
I didn’t know living in an overpriced underwater house has the same affect on your reasoning as smoking crackpipes.

That's why I said SHOULD. Obviously banks didn't understand the risks involved.

It's pretty simple, though. If you were loaning your money--would you take an severely overpriced asset as collateral?

Mr.Fantastic says

Quoted for ridiculousness and overall stupidity.

It's easily the dumbest thing he's said.

tatupu70 says

That’s why I said SHOULD. Obviously banks didn’t understand the risks involved.

So just to clarify, you believe that no-recourse loans mandated by the states were intended to inspire banks to be LESS risky? Just admit that you made that one up, nobody will rag on you if you come clean.

klarek says

So just to clarify, you believe that no-recourse loans mandated by the states were intended to inspire banks to be LESS risky? Just admit that you made that one up, nobody will rag on you if you come clean.

I don't claim to know the reason behind no-recourse loans. I'm only pointing out one of the side effects of them.

And yes, being no-recourse should without a doubt cause banks to be less risky. That should be VERY obvious.

Mr.Fantastic says

Serpentor says

You mean like how it prevented the housing bubble from forming in CA? LOL.
I didn’t know living in an overpriced underwater house has the same affect on your reasoning as smoking crackpipes.

I don’t think this can be overstated, but the fact that tatupu thinks that non-recourse loans should prevent bubbles from forming, in spite of what has occurred in the past decade, has to rank as one of the most stupidest statements ever said on the internet.

OK--it should be easy to point out the flaw in my logic then, right?

I expect a comeback along the sort of the one you gave on the other thread, however, about licking your nuts. Very clever. Or maybe you'll go with faggot again. Seems to be one you are very proud of.

Please surprise me. Post something that is actually on topic.

Mr.Fantastic says

tatupu70 says

OK–it should be easy to point out the flaw in my logic then, right?

There are about $9 trillion flaws in your logic.

And I was right again. I'm not going to respond to your obvious trolling post. Other than to say you must really be running scared now...

Still waiting for you to post anything resembling a useful response or showing why you think I'm wrong....

Tatupu's logic is not flawed.

non-recourse state
Homedebtor comes along and says I want to buy a house for $1M. Lender says, here's your $1M on the contingency that I get the house back if you don't pay me back. Lender sure as hell better be sure that house is worth $1M or Lender is making a stupid loan since all he gets back is the house.

recourse state
Homedebtor comes along and says I want to buy a house for $1M. Lender says, here's your $1M on the contingency that I get the house back if you don't pay me back, and any difference between the price I get for the foreclosure sale and the loan amount, I'll get a default judgment against you. No matter what the house sells for, Lender will get his $1M in time.

Therefore, using logic (rather than insults), Lender in a non-recourse state SHOULD do a lot more to avoid overlending which SHOULD reduce the chances of a bubble.

Haha..I feel like removing my ignore option :)

klarek says

MarkInSF says

I’m not quite sure why you’re against no-recourse loans.

It gives deadbeats a free pass and it’s govt impeding on risk management. In fact, it increases risk, as is evidenced by the large numbers of people strategically defaulting.

I take it then you are in favor of getting rid of non-recourse loans for commercial real estate too? And what about corporate debt? Should owners of corporate bonds be able to come after the personal assets of owners / shareholders of the company?

ch_tah says

Tatupu’s logic is not flawed.
non-recourse state

Homedebtor comes along and says I want to buy a house for $1M. Lender says, here’s your $1M on the contingency that I get the house back if you don’t pay me back. Lender sure as hell better be sure that house is worth $1M or Lender is making a stupid loan since all he gets back is the house.
recourse state

Homedebtor comes along and says I want to buy a house for $1M. Lender says, here’s your $1M on the contingency that I get the house back if you don’t pay me back, and any difference between the price I get for the foreclosure sale and the loan amount, I’ll get a default judgment against you. No matter what the house sells for, Lender will get his $1M in time.
Therefore, using logic (rather than insults), Lender in a non-recourse state SHOULD do a lot more to avoid overlending which SHOULD reduce the chances of a bubble.

His argument is flawed because the opposite of what you described happened. Non recourse states had the biggest bubbles because the can buy way over their means and not have to worry about banks out the law coming after then if it goes south. Individual greed wins over bank worker diligence.

Mr. fantastic and klarek, you are entirely missing the point about non-recourse and risk.

Yes, if loans are non-recourse, borrowers will likely be less cautious, but banks - assuming they hold the loans - will be more cautions.

If mortgages are recourse, then borrowers may be more cautions, but banks will be more reckless, since they don't really care at all about the value of the property - only the value of the assets of the borrower they can seize.

Who do you think is better at judging risk? A borrower or a bank? I would sure hope it's the bank, since that is their business. So it's the bank that should have the onus of caution put upon them.

Of course non-recourse doesn't cause lenders to be cautious if they're not the ones actually taking the risk. And that's exactly what happened in the bubble. Loans were just packaged and sold to investors with fraudulent AAA rating slapped on them. The loan originators didn't give a damn how bad the loan they made was.

Serpentor says

Non recourse states had the biggest bubbles because the can buy way over their means and not have to worry about banks out the law coming after then if it goes south. Individual greed wins over bank worker diligence.

What bank worker diligence is that exactly?

I'm just completely baffled by this stupid statement. If lender was doing their due diligence they would not lend to somebody over their head.

Banker diligence in making sure the borrowers can actually afford the payments.

Did the bubble haopen in ca or not? And is ca a recourse state or not? Who is stupid now?

Serpentor says

His argument is flawed because the opposite of what you described happened. Non recourse states had the biggest bubbles because the can buy way over their means and not have to worry about banks out the law coming after then if it goes south. Individual greed wins over bank worker diligence.

That doesn't make his argument flawed, that just means there were other forces that affected the decisions of the banks. His logic makes sense, especially considering he said SHOULD. F'n A, man, you guys who try to play gotcha, why don't you get better at reading first.

Serpentor says

Banker diligence in making sure the borrowers can actually afford the payments.

Again. What evidence to you see that lenders were actually diligent in making sure borrowers could actually afford payments?

Three years from What????

day you stop paying?

the day you leave the house?

day bank files NOD?

it's been two years since my friends walked in San Diego, the bank still hasn't filed a NOD!!

who is starting the stop watch???

anyone??

Mr.Fantastic says

You think bankers are responsible and diligent, more so than borrowers.

But lenders ARE more cautious. By a longshot. But only if their own capital is at risk. You know, they way banks used to operate? That's the essence of the problem, not non-recourse loans.

CA has been non-recourse for many decades before the bubble. So why didn't they have a bubble before?

What changed was the way lenders operate, becoming simply loan originators, and the securitizing loans with fraudulent AAA ratings slapped on them. Home loans used to be carried on the books of the bank that wrote the loan, putting the banks capital at risk.

I never ever imagined the prices would be supported by NOT FORECLOSING on millions and millions of people.

I knew there was a massive bubble, but I didnt see that one coming.... or the 12 trillion in bailouts/loan guarantees the Feds have done....

And lets keep in mind people who 'saw' the bubble are probably a rare slice of the population. Who the hell can predict where this mess goes next?

ch_tah says

Serpentor says

His argument is flawed because the opposite of what you described happened. Non recourse states had the biggest bubbles because the can buy way over their means and not have to worry about banks out the law coming after then if it goes south. Individual greed wins over bank worker diligence.

That doesn’t make his argument flawed, that just means there were other forces that affected the decisions of the banks. His logic makes sense, especially considering he said SHOULD. F’n A, man, you guys who try to play gotcha, why don’t you get better at reading first.

His statement is flawed because there are other stronger forces that affected the result. Its retarded because real world results proved that his assumption was wrong. Its retarded because that statement was made after the mother of all bubbles happened in states with no recourse because buyers dont have to worry about banks coming after them.

Its not gotcha. Its real world proof versus a theory by a desperate house owner.

Just so we're clear, the statement we're talking about is:
Tatupu: Not really. It should cause banks to stop giving loans when houses are overpriced and stop bubbles from forming.

Yes, other stronger forces affected the result, that still doesn't make his comment flawed or retarded.

The bubbles occurred in the nonrecourse states because the BUYERS didn't have to worry, whereas buyers in recourse states did. That has nothing to with whether the banks SHOULD have stopped giving these people loans and whether such a law SHOULD encourage banks to be more careful. As MarkinSF pointed out, the banks seemingly didn't care since they were able to sell off the loans and get them off of their books for the most part.

It is a gotcha by a wannabe house owner who can't afford one since the bubble already occurred and whether or not nonrecourse loans caused it is irrelevant to those who purchased.

BTW, student debt is recourse and can't even be discharged in a bankruptcy. That's hasn't stopped the bubble in student loans and education costs.

Mr.Fantastic says

MarkInSF says

Mr.Fantastic says

You think bankers are responsible and diligent, more so than borrowers.

But lenders ARE more cautious. By a longshot. But only if their own capital is at risk. You know, they way banks used to operate?

Yeah I remember those days. What about when gas was $1.25 a gallon, people flew by zeppelin, and dinosaurs roamed the Earth?
Those were the days.

Ha. Ha. Very funny. No, you only have to go back to 1995, the year before the housing bubble got started.

Serpentor says

His statement is flawed because there are other stronger forces that affected the result. Its retarded because real world results proved that his assumption was wrong. Its retarded because that statement was made after the mother of all bubbles happened in states with no recourse because buyers dont have to worry about banks coming after them.

I'll give you credit because at least you are presenting argument for why you think I'm incorrect, which is more than the others are doing.

Where you're wrong is your assertion that the fact that a bubble formed disproves my point. It's a logical fallacy. Saying A makes B less likely doesn't mean that A makes B impossible. Nor does B happening prove mean that A didn't make it less likely to occur.

tatupu70 says

Mr.Fantastic says

tatupu70 says

OK–it should be easy to point out the flaw in my logic then, right?

There are about $9 trillion flaws in your logic.

And I was right again.

Yes, tats, adding risk to the system reduces risk. Nothing flawed in that argument. Your cogency is breathtakingly awesome.

ch_tah says

Therefore, using logic (rather than insults), Lender in a non-recourse state SHOULD do a lot more to avoid overlending which SHOULD reduce the chances of a bubble.

Except
a) that's not what non-recourse is used for, tatupu just made that up, and
b) states are putting unneeded risk on the lenders, yet the traditional role of the govt was to regulate industry and REDUCE risk since those lenders cannot be trusted

So it's entirely bullshit, left to right, inside and out, to suggest that this could in anyway minimize or even neutralize risk.

MarkInSF says

I take it then you are in favor of getting rid of non-recourse loans for commercial real estate too? And what about corporate debt? Should owners of corporate bonds be able to come after the personal assets of owners / shareholders of the company?

Remove it all. If for no other reason than to end the constant pathetic excuse of "well the corporations do it, so you should too," usually from the same anti-capitalist dumbasses who suddenly see the need to model personal financial behavior after the most unsavory of corporations.

MarkInSF says

What evidence to you see that lenders were actually diligent in making sure borrowers could actually afford payments?

Thank you for driving home the point that his argument is completely fucking stupid. "Let's add more risk and trust the bankers to make up for it". About as logical as drinking cyanide to teach your body to repel it".

Mr.Fantastic says

I guarantee you, he will spend the next half dozen post defending non-recourse loans as a way to save the financial system.

Perhaps he'll next argue that we should permit registered sex offenders from living anywhere BUT next to a school. That way it will increase student and faculty safety awareness. Increase risk to decrease risk, the logic is flabbergasting.

klarek says

ch_tah says

Therefore, using logic (rather than insults), Lender in a non-recourse state SHOULD do a lot more to avoid overlending which SHOULD reduce the chances of a bubble.

Except

a) that’s not what non-recourse is used for, tatupu just made that up, and

b) states are putting unneeded risk on the lenders, yet the traditional role of the govt was to regulate industry and REDUCE risk since those lenders cannot be trusted
So it’s entirely bullshit, left to right, inside and out, to suggest that this could in anyway minimize or even neutralize risk.

What is non-recourse used for then? It's main goal is to prevent people from being overly burdened in debt from a loan that goes bad, but that goes hand-in-hand with the people/banks making those loans to make sure they make good loans.

In what ways are states putting unneeded risks on lenders?

Removing locks from all cars and houses "should" reduce crime because the owners should be more vigilent in guarding their possesions.

Getting rid of jails and all punishment "should" make crime go down because it will force the police and citizens to be more vigilent.