patrick.net

gameisrigged says

fredMG says

There seems to be some confusion over what a mortgage is. It is contract, not a moral honor code. The contract says the bank gets the house back if you default. You are contractually obligated to give the house back when the bank forecloses. You are NOT contractually obligated to pay “because it is the right thing to do”
What if the shoe was on the other foot. What if I made every payment on my 15 year mortgage but the last payment was lost in the mail and I had left for a 6 month vacation. Would the bank say “The right thing to do would be to wait a few months to see if he returns and is able to pay.” or would they send the 90 day notice and start the foreclosure process?

I’m not sure how this urban legend got started that a mortgage contract says, “Pay back the loan OR give the house back”. I hear this a lot. But they actually are not worded that way. The house is held as security for the loan, but you are borrowing money, not a house. The reason you are not liable to pay back the loan after the bank takes the house back, in California, is that California has laws that prevent it. It is NOT because your mortgage contract is some sort of either/or proposition. You borrowed money, and you agreed to pay back money. And in fact, only the original purchase loan is non-recourse; HELOCs are not. I’ll leave it up to each individual to decide what he thinks is moral or immoral, but don’t use some misguided notion of what a mortgage contract is as your supposed justification for anything.

Yawn. So in your words, the mortgage contract says the bank can take the house back and if non-recourse they cannot sue for deficiency. If recourse they can sue your pants off.
Why get all moralistic and long-winded about it?

kt says

Yawn. So in your words, the mortgage contract says the bank can take the house back and if non-recourse they cannot sue for deficiency. If recourse they can sue your pants off.

Why get all moralistic and long-winded about it?

Um, no. That's not what I said at all. Maybe you shouldn't try to read message boards and have the TV on at the same time.

retro-active windfall taxs on REwhores and lenders that made all of the big cash between 1999 and 2012.

Full recourse loans and debtors prison for unpaid taxes.

Just tossing out some ideas.

I've forgotten the name of the particular mortgage, but I vaguely recall hearing about a mortgage where commission is paid as the mortgage was paid, throughout the life of the loan. I think anything that makes the lender/broker/realtor think good and hard about lending/selling is a step in the right direction (as opposed to the smash-and-grab technique that has been the industry standard for so long now). And of course, we all know money is all that matters to these folks. You've got to hit them where it hurts, or they will just do it again.