patrick.net

The coach lost his down payment. If that was 20% of the $1.368 million paid, then that was about half that $518,000 that was his loss.

The rest would be the lenders loss. If course you have to consider that 3+ years of payments have been made, so if their losses were going to be $250K, with the payments if $200K+, the loss would not be very much.

It would only involve taxpayer losses it there were a GSE loan involved. The loan limit for a Fannie Mae loan back in 2007 was $417K, so he probably didn't have one of those.

robertoaribas says

Until recently, [3 years ago] that would have been 3 to 4% for the bank as well,

robertoaribas is obviously completely unaware that short term borrowing costs plummeted right after 2007, when Mr. Long took out his loan.

Even if he refinanced, mortgage rates didn't fall nearly as much as bank short term borrowing rates, which quickly fell to near 0%.

You're right of course you have to account for the costs of funds to the lending entity, but given that almost all mortgage lending is funded by short term credit, and short term rates have been near 0%, that cost is a small portion of payments made.

@MarkinSF

Thanks for the comment.

Can't say I feel all that sorry for his loss in this case, since he chose to buy the luxury home and has made millions over the last few years.

He made > $2M, so when your a millionaire, what the biggy with $0.5M? He could have easily paid the house off in 4 years.

However, when you make $700K a year, you have to have at least $200K in Mercedes, and good food. He is entitled to this.

He only wanted appreciation to continue, and oops, it didnt. This is not his fault - he was entitled to appreciation.

When he was fired he was entitled to another $700K. When he moved, he was entitled to another home in another state.

http://www.narcissismepidemic.com/

Not blasting him, just curious what the take on the story was.

Don't forget the coach had to pay taxes on his $700K per year, that only leaves him with approximately $350K/yr. $350k doesn't buy what it used to buy you. It's hard to live on $30K a month and live the lifestyle of the rich and famous. Don't worry, we low life tax payers will bail you and the bank out like we do every time.

robertoaribas says

Until recently, [3 years ago] that would have been 3 to 4% for the bank as well, though today they are paying much less to depositors and the FED for funds…

More like something very close to nothing today.

Well, for what he's making in salary here in Kansas, he can get a palatial estate in Cedar Creek. The cost of buying a home is about a third even now what it is in Calif. Cost of living is a lot lower. Sounds to me he worked himself a good deal.

I'm so glad the 'acceptance' phase of the bubble is here. I mean its EVERYWHERE, no more bubble deniers. Last summer the tax credit was supposed kick start the bubble according to some ! HAHAHA! It just robbed future demand and now we are in a nuclear winter after losing a nuclear war (yay the war is over.... but winter will last the rest or your life.....)

Celebrities and rich people walking away/going bk/ strategic defaulting. Its like there is no end in sight with 30% of loanowners undawata on they loans.

It has taken 16 years to get here from the last bottom (1996) and no end/bottom in sight really (just like 96).

I know I'm enjoying this. Credit junkies and zero down bmw/mercedez drving heloc abusers are getting KILLED daily.

McDefault : I'm lovin' it!

he may have not even put that much down, he could come out of pocket to make up difference, so as to preserve his credit and live up to end of the agreement. Much like when you trade in a car that is worth less then they will pay, you add cash to make it worth payoff.

350k a year for teaching football. I guess thats what we are paying taxes for. Things like that said the people that pay an average of 160$ a month in property taxes. 350k I would have taught football for have that. High priced homes are iffy anyone that buys something like that. Really should have their head looked at. Why?

Simply because high priced homes are way different than a 4 bedroom house. They are a very strange commodity. Really effected in a great way by what goes on. They could be worth 800k today and 600k tommorow. With no money being lent. Especially on the type of loan that sucked in over 300 banks. That guy really had more money than sense.

By the way if the guy was making payments he wasn't rich at the point he had to start making them.

The bank takes the loss not the taxpayers. They really are not involved here. On the bailout you assume the taxpayers paid for that. In slight of hand what really happened is congress only "AUTHORIZED" it. Thats all they really do if you pay attention. The banks bailed themselves out. See when your made up of member banks that own other banks. Then you can bail yourselves out even if your not a member bank. Wearing the corporate mask. It's owning a really big printer and assets that the common person slaves To build fo a little more than a piece of paper. Bring your little coupon into any of our stores we will honor it.

So just like they "Authorized" the current war. Which I think they did. I can't recall what congress did. It's all legal stuff. Like don't break the law. Cause well. Some big fat guy with greece dribbling down his chin will through you in jail for violating the war powers act. Which says that: We have the authority but we forgot that in this instance. Because its Monday. Panic ran through Washington remembering this was income tax time. They decided that he did have the authority. Pay your taxes. It's official.

Seriously to answer your question. Because this is usury. The banks do not want to test the laws. They won't even bother because well even going to court is questionable at this point. So there may be a little mark on his credit report. No deficiency judgement. Ever. The bank sucks it up and prints more money. Coach walks away. Which he could have done anyway. However he feared a mark on his credit report. So he went to all of this trouble. Now he could have done a little deal here. I will get into that later. It inovles the law. Which we all know is oh so important here in the USA. After all we wouldn't want Zeus after us or anything.

Thanks for the comments.