patrick.net

What if these buyers put down a 40-50% downpayment? Would that diminish the negativity of a foreclosure?

burritos says

What if these buyers put down a 40-50% downpayment? Would that diminish the negativity of a foreclosure?

no, old banking rule was 67%. However prices are still ballooned in many areas it is unlikely for people to have that. Besides noone is going to give away that much cash for something that isn't worth even half of the sale price.

IMO The theme of Government propped housing Market will never go away until the system eats itself or repeats the crazy stuff again. (i don't believe what's in the news today it's all BS, the data, the numbers, all BS rigged BS!!!!)

2006 was the peak for housing. it's never coming back unless it's just a repeat of the ponzi craziness. ( never underestimate this ponzi system's drive to make a buck!)

So The 2011 theme for me is Want less, live with less in less using less. (save haha)

of coarse it seems to me the Va jay jay wants more, newer, better, bigger. heck just a different color alot of the times.

things the Va jay jay says (overheard by me last few months)

"I want the new Mini Van that my girlfriends drive" ( wants and needs your car works fine you're losing your house because it's $200K underwater and you and hubby are currently under employed.)

"I want to live in the country on a bunch of land not here." ( you live in one of the best towns in CA and in one of the best hoods (west side Santa Cruz) in a $500k (was $900K) 3/2 bought by your father in law, you don't work. you have a dream life, and still :-( (wants and needs people)

"I want another kid",.... good god really you have two! what do you say to that? (wants and needs,..no!)

IMO a man would live in a cardboard box , or a hole dug into the ground. he could get by driving his first car from high school and most likely wear the same jeans too,... just imagine if the Va jay jay was cool with that!
that would be a cool life! wanting nothing and having everything!

Just say'n

EightBall says

however, some would call them the scum of the earth and others would call them genius.

I'm leaning toward thinking it's Genius lately. ;-)

UCC won't let you record credit issues past 7 years.

Thinking about walking away from your albatross chip designer?

If I were running a bank, the only thing I would care about is if the borrower is likely to pay the loan back, and if they don't if there is adequate recourse. I wouldn't care in the slightest if they did a "strategic default".

I'd be a fool to turn down somebody with a good stable income that brings a large down payment.

ChrisLA says

Short sale is as bad as a foreclosure when it comes to getting a loan.

I know someone that did a short sale (after liquidating the "equity") in 2007 and bought in 2009. Of course, he is once again underwater. I'm sure he got a sweet FHA loan at the taxpayers' expense.

MarkInSF says

if they don’t if there is adequate recourse

Adequate recourse? Look at the number of strategic defaults and tell me that the pain they're going to face for being deadbeats comes anywhere close to the benefit of ditching the house..

klarek says

Adequate recourse? Look at the number of strategic defaults and tell me that the pain they’re going to face for being deadbeats comes anywhere close to the benefit of ditching the house..

In those cases, the lender obviously did not have adequate recourse.

If somebody comes to me with 20% down to buy a home that is fairly priced - not bubble priced, the odds of me losing money are very slim, even if they did walk away from their last home.

MarkInSF says

In those cases, the lender obviously did not have adequate recourse.

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.

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?