The Straight Story
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Wed Feb-02-11 10:22 AM
Response to Original message |
| 52. Look at it this way: 90k house, 30 yr loan, will cost you 250k+ - will be underwater either way |
| -Why is there so much media concern about "underwater" mortagages |
pnwmom |
Feb-01-11 07:17 PM |
#0 |
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Underwater houses are far more likely to go into foreclosure |
CreekDog |
Feb-01-11 07:18 PM |
#1 |
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I wonder if part of the reason for that |
pnwmom |
Feb-01-11 07:21 PM |
#3 |
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I suppose some people think it's stupid to pay back money you owe. nt |
wtmusic |
Feb-01-11 07:23 PM |
#5 |
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Some financial bloggers do. One, in particular, |
pnwmom |
Feb-01-11 07:25 PM |
#7 |
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You can write off what you lose, you can't write off what you owe. |
wtmusic |
Feb-01-11 07:27 PM |
#9 |
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Technically, no. But don't short sale agreements and foreclosures |
pnwmom |
Feb-01-11 07:30 PM |
#11 |
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Your credit will be in the toilet for a good long while |
wtmusic |
Feb-01-11 07:35 PM |
#19 |
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Not the distant past, unfortunately. |
pnwmom |
Feb-01-11 07:43 PM |
#25 |
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Amazing. |
wtmusic |
Feb-01-11 07:48 PM |
#27 |
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You missed the period of "no doc" loans. |
pnwmom |
Feb-01-11 07:51 PM |
#30 |
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I guess I did. |
wtmusic |
Feb-01-11 07:52 PM |
#33 |
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It is stupid |
MattBaggins |
Feb-02-11 08:21 AM |
#46 |
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Deleted sub-thread |
Name removed |
Feb-02-11 09:00 AM |
#49 |
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Morgan Stanley thinks it's stupid |
SOS |
Feb-02-11 09:14 AM |
#50 |
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Foreclosure and negative amortization are two symptoms of the same problem |
slackmaster |
Feb-01-11 07:31 PM |
#13 |
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Because if Investor Y has to sell his house he'll still owe $40,000 to the bank. |
wtmusic |
Feb-01-11 07:20 PM |
#2 |
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So the real concern is that the banks won't have enough equity? |
pnwmom |
Feb-01-11 07:23 PM |
#4 |
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The concern is that the home "owners" can't sell without a short sale... |
PassingFair |
Feb-01-11 07:25 PM |
#8 |
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But if a homeowner doesn't need to sell, |
pnwmom |
Feb-01-11 07:28 PM |
#10 |
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That's true, if she has enough job security and savings to wait for a while |
wtmusic |
Feb-01-11 07:31 PM |
#12 |
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We brilliantly bought in July 2007, so we've seen a huge loss. |
pnwmom |
Feb-01-11 07:34 PM |
#16 |
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Prices will likely return. |
wtmusic |
Feb-01-11 07:41 PM |
#23 |
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Yeah, I try to stay away from Zillow. |
pnwmom |
Feb-01-11 07:46 PM |
#26 |
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The problem is that wages are falling... |
PassingFair |
Feb-01-11 07:34 PM |
#15 |
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I wasn't trying to make people say anything in particular. |
pnwmom |
Feb-01-11 07:37 PM |
#20 |
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No but even there the risk is strategic default. |
Statistical |
Feb-01-11 07:52 PM |
#31 |
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In the case of such an individual, you're right |
customerserviceguy |
Feb-01-11 09:38 PM |
#39 |
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But why should the homeowner pay off 140k in debt when they could move into similar accomodation... |
JVS |
Feb-02-11 06:33 AM |
#45 |
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Bingo. |
PassingFair |
Feb-01-11 07:24 PM |
#6 |
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Because it generally makes the house unsellable, increasing the odds of foreclosure. |
Xithras |
Feb-01-11 07:32 PM |
#14 |
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It's probably not so good for your friend's credit rating, either....n/t |
PassingFair |
Feb-01-11 07:35 PM |
#18 |
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Nope. Speaking from experience, it does quite a bit of damage. |
Xithras |
Feb-01-11 07:43 PM |
#24 |
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Thanks. n/t |
pnwmom |
Feb-01-11 07:40 PM |
#21 |
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Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis |
enough |
Feb-01-11 07:35 PM |
#17 |
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OR...they understand proper economics. |
flvegan |
Feb-01-11 07:50 PM |
#29 |
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interesting cryptic post. Please expand. (nt) |
enough |
Feb-01-11 08:09 PM |
#34 |
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Well you see |
flvegan |
Feb-01-11 08:35 PM |
#36 |
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Most businesses walk away from underwater mortgages. |
jtown1123 |
Feb-02-11 10:26 AM |
#53 |
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As I stated above; "It's good business" |
MattBaggins |
Feb-02-11 08:41 AM |
#47 |
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Part of it is probably the psychological aspect... |
Curmudgeoness |
Feb-01-11 07:40 PM |
#22 |
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When the middle class walks away their irresponsible; when the rich walk away |
Dappleganger |
Feb-01-11 07:50 PM |
#28 |
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Or |
pnwmom |
Feb-01-11 07:52 PM |
#32 |
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Duh! Of course, it's better to lose bank's money than |
Fool Count |
Feb-01-11 09:10 PM |
#38 |
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And how is that any different from a person who has less to spend on |
pnwmom |
Feb-01-11 11:05 PM |
#42 |
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This is different in a very simple and obvious way: |
Fool Count |
Feb-02-11 12:37 AM |
#43 |
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If you have equity in the house you can take the loss and sell |
dkf |
Feb-01-11 08:29 PM |
#35 |
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Your comparison is apples and kiwis |
social_critic |
Feb-01-11 08:38 PM |
#37 |
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If Family X got their house with a variable rate mortgage |
customerserviceguy |
Feb-01-11 09:41 PM |
#40 |
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Good point. |
lumberjack_jeff |
Feb-01-11 09:42 PM |
#41 |
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The reason there is concern is that underwater mortgages are actually better off defaulting and... |
JVS |
Feb-02-11 06:31 AM |
#44 |
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Because MANY "underwater mortgages" are that way because people used houses like ATMS |
SoCalDem |
Feb-02-11 08:49 AM |
#48 |
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I always figure being underwater only matters if you HAVE to move, or have to |
TwilightGardener |
Feb-02-11 10:07 AM |
#51 |
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It does not matter if home values come back in some |
Fool Count |
Feb-02-11 05:06 PM |
#54 |
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Look at it this way: 90k house, 30 yr loan, will cost you 250k+ - will be underwater either way |
The Straight Story |
Feb-02-11 10:22 AM |
#52 |
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For a lot of people the majority if not all of their assets are invested in their home |
NNN0LHI |
Feb-02-11 05:41 PM |
#55 |
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