patrick.net

Mr.Fantastic says

Hey GENIUS, Border’s is a BUSINESS ENTERPRISE. Investors who financed Border’s knew this going in. They invested money KNOWING that Borders may not succeed as a business, and all the risk that came with.

Yeah, and if you give somebody a non-recourse mortgage, you invest money KNOWING that if home prices fall the borrower can give you back to property with no further obligation, and all the risks that come with that.

How about if I start a corporation, the corporation buys a home to rent for profit. If it turns out I'm taking a loss from the business enterprise, is it perfectly OK with you if the corporation just declares bankruptcy and I give the home back to the lender?

Mr.Fantastic says

Since when is John and Jane Smith buying their personal residence at 10x their yearly income a business venture? Your reasoning gets stupider every time you post.

Loaning the money to them IS a business venture.

Mr.Fantastic says

Okay, let’s discuss the facts then shall we?
1) You bought a home you couldn’t afford.
2) You are attempting to ditch out on your debt obligation because of your irresponsibility.
3) You believe you should own a home, even though your recent history says otherwise.
That about sum it up?

Awesome. Do you just have that as a macro? So whenever someone shows you to be wrong, you just pull it up?

Mr.Fantastic says

A primary residence is NOT an investment, it’s a disposable good, like a car, like a watch, like a candy bar.

Really? Do you know what disposable means? Do you plan on throwing your house in the trash at some point?

Mr.Fantastic says

tatupu70 says

Mr.Fantastic says

Since when is John and Jane Smith buying their personal residence at 10x their yearly income a business venture? Your reasoning gets stupider every time you post.

Loaning the money to them IS a business venture.

Here comes stupid. Okay genius, when you bought your over priced dump in St. Louis based on you and your wife’s dual income, did you put primary residence on your loan application or not?

Completely moot.

Mr.Fantastic says

tatupu70 says

Mr.Fantastic says

A primary residence is NOT an investment, it’s a disposable good, like a car, like a watch, like a candy bar.

Really? Do you know what disposable means? Do you plan on throwing your house in the trash at some point?

Lots of people do just that. Why do you think homes are sometimes abandoned or bulldozed? It all depends on how much a person is willing to spend to maintain a home. Some people will maintain a home for decades, and then try to sell it to someone else (not much unlike a used car). It’s up to the person involved to decide how long they want to keep it like any disposable good.

Well, I asked YOU. When do you plan on bulldozing your house? (or more accurately, your parent's house)

Mr.Fantastic says

tatupu70 says

Mr.Fantastic says

tatupu70 says

Mr.Fantastic says

Since when is John and Jane Smith buying their personal residence at 10x their yearly income a business venture? Your reasoning gets stupider every time you post.

Loaning the money to them IS a business venture.

Here comes stupid. Okay genius, when you bought your over priced dump in St. Louis based on you and your wife’s dual income, did you put primary residence on your loan application or not?

Completely moot.

Exactly, because you know, and I know, you didn’t take out your over sized loan as an investment property which has different terms, and is actually taxed differently. You bought your over priced albatross as a primary residence. That’s why you won’t address the point because it sinks your point completely.

The problem is you can't keep on topic. You feel an overwhelming need to troll the board. I think it's some sort of personality disorder. In any event, the point is that a mortgage isn't a business to the family that owns it, but it most certainly IS a business endeavor for the bank that is loaning the money.

Mr.Fantastic says

tatupu70 says

Mr.Fantastic says

tatupu70 says

Mr.Fantastic says

A primary residence is NOT an investment, it’s a disposable good, like a car, like a watch, like a candy bar.

Really? Do you know what disposable means? Do you plan on throwing your house in the trash at some point?

Lots of people do just that. Why do you think homes are sometimes abandoned or bulldozed? It all depends on how much a person is willing to spend to maintain a home. Some people will maintain a home for decades, and then try to sell it to someone else (not much unlike a used car). It’s up to the person involved to decide how long they want to keep it like any disposable good.

Well, I asked YOU. When do you plan on bulldozing your house? (or more accurately, your parent’s house)

Let’s not get personal. I respect your right to privacy, respect mine. Stick to the topic.

That is the topic. When are you going to dispose of your house. You said it was a disposable good, so I'm just wondering when you plan on arranging the bulldozer?

Mr.Fantastic says

Exactly my point. You can’t compare an inflated mortgage abuser to the Border’s Corporation. It’s two different things.
I also agree it’s a business transaction for the bank, but how does that help your point, or Mark’s point, at all?

As usual you completely missed the point. The situation is exactly the same to the bank. Giving a loan to Borders or giving a non recourse loan for a primary residence.

Mr.Fantastic says

tatupu70 says

As usual you completely missed the point. The situation is exactly the same to the bank. Giving a loan to Borders or giving a non recourse loan for a primary residence.

No it’s not. Border’s is a business enterprise. John and Jane Smith are a couple buying a home. Two different situations.

Yes, every situation is different. But from the bank's point of view, concerning the loan, they are really the same.

Mr.Fantastic says

tatupu70 says

That is the topic. When are you going to dispose of your house. You said it was a disposable good, so I’m just wondering when you plan on arranging the bulldozer?

I’ll answer that when you tell me when are you going to put your wife on a diet? Trust me she needs it.

Good one. So is your house a disposable good or not? And if so, when are you disposing of it?

shrekgrinch says

Whats our bank you do have money in?

what is this?? Doublespeak? Or are you one egg short of a 12 inch quiche??

Mr.Fantastic says

It’s not an investment genius! When you sign a document for a loan, you state whether the property is your primary residence or not. The rates and loan requirements are completely different between someone buying a primary residence and someone buying an INVESTMENT property.

Obviously they are not completely the same, but your statement that they are "The bank looks at them totally different" is false. In the non-recourse nature of the loan, they are exactly the same. And from a legal and ethical stand point, defaulting on the loan and giving the property to the lender is exactly the same in each situation.

klarek says

. About as logical as drinking cyanide to teach your body to repel it”.

Given evolutionary forces and enough bodies, bodies would eventually repel it you ignorant bowelstructure....

Mr.Fantastic says

No it’s not. The bank looks at them totally different. Seriously, go into a bank, and try to get a loan for a business venture, and then go and try to get one for a primary residence.

I'm sorry that your idea for a business was so bad that the bank laughed you out of the office, but that really isn't relevant to the discussion.

People who have done their homework and have a good business plan can and do get loans. The bank evaluates the business to see if they think it will make money and be able to pay back the loan, just as it looks at the credit history of someone applying for a home mortgage to see if they will be able to afford to make the monthly payments.

Still waiting on the date for the bulldozer....

Mr.Fantastic says

tatupu70 says

Mr.Fantastic says

Since when is John and Jane Smith buying their personal residence at 10x their yearly income a business venture? Your reasoning gets stupider every time you post.

Loaning the money to them IS a business venture.

Here comes tatupu the jester. Okay genius, when you bought your over priced dump in St. Louis based on you and your wife’s dual income, did you put primary residence on your loan application or not?

Here comes Fantastic, the court dickhead, desperately trying to change the subject after having the 'business venture' argument thrust up his ass with a size 16 army boot....

Mr.Fantastic says

Seriously, spend your time thinking about your own life, instead of mine.

There are lots of good ideas out there. Keep trying--maybe next time you'll come up with something worth funding and you can move out of your parent's basement....

Mr.Fantastic says

See the difference is you know the stuff I’m saying is true because the evidence is out there for anyone to see because you’re simply too open about your personal life on Patrick.net.
Not very smart to leave personal information about your wife so blatantly in the open.

lol. All I've said on Pat.net is that I'm married. The rest is pure speculation on your part. You probably did a google search on tatupu and think you've done great detective work. Well done.

I know you Irvine types are tough, but I'm not too worried.

Bzzzzt! Time out. Too many personal insults.

In fact, any personal insults are too many and I will delete them.

Getting back to the main thread, which is an interesting one. Any other cases of walkaways buying a home after the 5 years of "credit prison"? I wonder how much it is actually happening. I just don't know for the case of the US, but out here it doesn't happen.

American in Japan says

Any other cases of walkaways buying a home after the 5 years of “foreclosure prison”?

I know somebody that bought, did at least TWO equity extractions, short sold in 2007, and bought again late in 2009 (a foreclosure). He's pretty much your quintessential deadbeat shithead that wouldn't hesitate to take out another large chunk of equity if he weren't underwater again.

The equity extractions should still be recourse. Can the banks garnish his salary?

American in Japan says

The equity extractions should still be recourse. Can the banks garnish his salary?

I guess he got the banks to agree to let it go. He bought close enough to the peak that it wasn't a huge amount (like $30k a pop), and probably paid them so much in closing costs for each dip that it wasn't a total loss for them. Needless to say, he lived to fight and purchase another day. Yay America.

The housing peak was 2007. Then some early folks started to walk away in 2008.
So this year is the year those folks could “buy a home again”.
Has this been done before, I wonder?

5-7-10 years later or more, your financial history does not just disappear. Its pretty much there for your life time and even more. Welcome to the information revolution.

Best that can be said. is a hacker destroys all records and all the back up tapes/disks.
Not a chance that will happen.

thomas.wong1986 says

The housing peak was 2007. Then some early folks started to walk away in 2008.

So this year is the year those folks could “buy a home again”.

Has this been done before, I wonder?
5-7-10 years later or more, your financial history does not just disappear. Its pretty much there for your life time and even more. Welcome to the information revolution.
Best that can be said. is a hacker destroys all records and all the back up tapes/disks.

Not a chance that will happen.

Banks are not going to lend. Maybe Obama will.

If you look at this issue strictly from a numbers perspective, there are far to many people that have or will have foreclosures on their record for banks not to lend to them after some period of time, walk aways or not. The housing crash has affected everything and a foreclosure/shortsale/bankruptcy will mean less than it would have before the bubble. The problem now is that the banks aren't lending for residential property like they once did, and for good reason, the market hasn't stopped going down for many areas. Once it bottoms, appropriate underwriting standards will kick in, true borrower risk will be assessed, and things will achieve some equilibrium moving forward. At worst I think a person who walks away may face the prospect of a higher interest rate and larger down payment. I remember a client saying that he bought a house after a bankruptcy and all it meant was he didn't get the low interest rate right away....he just had to refinance a year or two later.

As a reference point, Banks already are finding ways of loaning to strategic defaulters. http://www.irvinehousingblog.com/blog/comments/banks-encourage-strategic-default-by-reducing-fico-impact/

fatblond says

If you look at this issue strictly from a numbers perspective, there are far to many people that have or will have foreclosures on their record for banks not to lend to them after some period of time, walk aways or not.

Proven deadbeats won't be high on their list of "I must have this customer," despite whatever you're wishing will be the case.

fatblond says

At worst I think a person who walks away may face the prospect of a higher interest rate and larger down payment.

This is probably true. Better start saving.

klarek says

I know somebody that bought, did at least TWO equity extractions, short sold in 2007, and bought again late in 2009 (a foreclosure). He’s pretty much your quintessential deadbeat shithead that wouldn’t hesitate to take out another large chunk of equity if he weren’t underwater again.

klarek says

Proven deadbeats won’t be high on their list of “I must have this customer,” despite whatever you’re wishing will be the case.

Don't these two comments conflict?

Mr.Fantastic says

I wouldn’t put money into a bank that would allow a defaulter to get another loan merely 3 years after they ran away.
The minimum should be 10 years.

So then you are going to stuff your money in a mattress?

ch_tah says

Don’t these two comments conflict?

Only if you don't know the difference between a short sale and a foreclosure.

klarek says

ch_tah says

Don’t these two comments conflict?

Only if you don’t know the difference between a short sale and a foreclosure.

I guess I equated the two since you did - deadbeats.

ch_tah says

I guess I equated the two since you did - deadbeats.

I knew the guy and he was a deadbeat before he bought his first place (which I urged him not to). No bank exceptions were made to make deadbeat short-sellers like him able to buy again. So when I said that proven deadbeats won’t be high on their list of "I must have this customer", there's nothing contradictory there.

klarek says

ch_tah says

I guess I equated the two since you did - deadbeats.

I knew the guy and he was a deadbeat before he bought his first place (which I urged him not to). No bank exceptions were made to make deadbeat short-sellers like him able to buy again. So when I said that proven deadbeats won’t be high on their list of “I must have this customer”, there’s nothing contradictory there.

Okee dokee.

ch_tah says

klarek says

ch_tah says

I guess I equated the two since you did - deadbeats.

I knew the guy and he was a deadbeat before he bought his first place (which I urged him not to). No bank exceptions were made to make deadbeat short-sellers like him able to buy again. So when I said that proven deadbeats won’t be high on their list of “I must have this customer”, there’s nothing contradictory there.

Okee dokee.

I love it.

To think of Banks as some monolithic entity moving in lock step is silly. Some Banks won't lend to sub prime borrowers ever again. Some will. Some will not lend to those with Short Sales and Foreclosures and Bankruptcy on their credit reports. Some will. It doesn't matter whether they are "high" on the list or not. The shear volume of people that will have scarlet letters on their credit report will create a market which some Banks will earnestly exploit.

As I said, they will make profits by charging higher rates and they will cover risk by better underwriting and asking for higher down payments.

@Mr.Fantastic

>As they should. 50% down and 18% sound about right.

LOL.!..getting better. OK Mr. Fantastic, I'm unignoring you and I will read more if you don't go back to the foul name calling like before...

Not so LOL. In 1980, we had 30% down. I have heard that Mortgage rates during that time were as high as 16% and I think eventually topped at 18%. Thanks to the Savings and Loan scandal and Jimmy Carter. Our rate was 13%. Takes a long time to pay off any noticeable principal, even when you don't borrow very much.

Fatblond is right. The defaulters will get loans... at very high rates.

@Payoff2011

My LOL was more of a "they deserve to pay more for their irresposibility" laugh than a "your idea is crazy to think interest rate and downpayments could ever get so high again laugh" FYI.

@fatblond

"If you look at this issue strictly from a numbers perspective, there are far to many people that have or will have foreclosures on their record for banks not to lend to them after some period of time."

So will those who didn't walk away get some outstanding rates/deals from banks since they are "rare gems" as borrowers?

Hmmm, good info from several in here. Nothing on mortgage tranches. Would be nice to hear from someone who knows if CMO's are trading. Obviously they are since our mortgages are immediately being sold to F/F/G. The whole trick was to stuff a tranche full of crapola and relabel it as A+ or whatever. So, if they are selling and FED or whomever is buying then who really cares if they will really pay. You see, it doesn't matter to the FED because they can just print more money. I think people on this list tend to loose sight of the overall system and what matters. Some Joe Conartist strategically defaulting doesn't break the buck when the FED/banks can eat the mortgage payment and pretend its still a fine investment. FED has "Total assets in the March 16 week came in at $2.587 trillion. " -- http://www.totalmortgage.com/blog/mortgage-rates/federal-reserve-may-resume-asset-purchases/5377
How many are mortgages? how many are not being paid? how abuot F/F/G? Are they actually expecting their mortgages to be paid? Who's the sly fox: the worker who saves and pays for his house or the conartist who takes advantage of these free money programs?
At least one Congressman on the Housing committee filed for bankruptcy himself:
http://www.cincinnatiohiobankruptcyattorney.com/2011/02/congressman-files-for-personal-bankruptcy.shtml

FED position info:
http://www.infiniteunknown.net/2011/02/28/federal-reserve-owns-37-percent-more-treasurys-than-china-balance-sheet-update/
1.2T MBS, ~2T treasuries. Same pump.
1.2T/50M houses with mortgages (I guess) => $24k. Or, at $200K home value, 6M houses. That is a LOT.