patrick.net

Austinhousingbubble says

And I do not really care about your moral arguments. When it comes to money if it is legal it is moral.
They aren’t my moral arguments. Principle is not subjective from individual to individual. Kinda like Magnetic North. If money and contractual legalese hold sway over your own personal judgment, that’s your lot. Good luck.

Whose moral arguments are they?

Whose moral arguments are they?

I don't have a proprietary ideal of morality that I'm trying to argue. You don't need to be a full-on absolutist to realize that on some level there are absolutes when it comes to right & wrong, regardless of context, statutes, loopholes, popular opinion, etc.

AHB,

I think you're getting your panties in a wad over what amounts to a very small number of people in the long run. I don't have any data but my contention is that the vast majority of folks who are walking away have little choice. They are financially unable to stay in their house without potentially damaging sacrifices and they have the emotional fortitude to walk away before the Sheriff kicks them out. Most people I've read about have some ridiculous emotional attachment to "their" house and they don't want to lose "their" house so will burn through their savings and rack up tons of credit card debt trying to make a mortgage payment they can't afford. They should have walked away before that point because now instead of just a foreclosure they're looking at a full-on bankruptcy.

I just don't think there are tons of these so-called "fat cats" of which you speak that are simply screwing the bank/govt. If so I'd love to see some actual data.

My panties are fine - I just find it disconcerting that you and people like you are feeding into this much maligned propaganda that it's cool to go out and get in over your head and then walk away, because, hey, it's the bank's lot, and fuck the banks. If this were the case, I would agree; I would buy twenty houses just to stick it to the banks. But, for the last time, it DOES NOT hurt the banks - they pass those debts onto you and me and the next generation, who will likely and rightfully revile this one for it's addiction to both consumer debt and government largess.

As for Fat Cats - there have been quite a few articles recently reporting on preemptive prime mortgage defaults out of self-interest rather than necessity - the fat cats I referred to. Do a Google search. I think Patrick.net even showcased an article or two in the recent past. It's not some phantom menace, and it will result in future tax burdens. On top of that, there are also plenty of people I know of personally who are stretching themselves thin to take advantage of FHA and other tax funded incentives for buying above their station who are one or two hiccups away from default in the coming years.

Here's some interesting news from the AP...

http://www.google.com/hostednews/ap/article/ALeqM5jYs8k4cz398yrVYLt3QxLvIURD9wD99OF1M02

"...the FHA became the main source of home loans to borrowers with poor credit and low down payments after the collapse of the subprime lending market."

"The FHA currently backs a 1/3 of new home loans, up from about 3% in 2006"

"Cutting out 25% of available mortgages would be a disaster, decimating the market and hurting millions of prospective homeowners."