One set of rules for the elite and another for the rest of us....

[WCGreen]

Last week in the NYT magazine, in the column titled The Way We Live Now, the subject was the double standard for those walking away from a commitment.

It isn't at all rare for a business to say cut it's losses and unexpectedly close a factory. They do that all the time, walk away from commitments made to communities desperate to bring needed funds into the city coffers. These cities regularly grant tax breaks and special dispensation for new roads and other infrastructure just to get a commitment. And yet we are suppose to write this off as "it's just business..."

Well, these same people who move capital around the globe chasing the lowest price continue to sluff of the human toll their actions create are now whining because some mortgage holders are walking away from loans, not even trying to renegotiate, no notice given. So how can it be wrong for an individual but not wrong for a company...

Anyway, that's the gist of this moral discussion is interesting to read.


http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html?scp=1&sq=Just%20Walking%20Away&st=cse

John Courson, president and C.E.O. of the Mortgage Bankers Association, recently told The Wall Street Journal that homeowners who default on their mortgages should think about the “message” they will send to “their family and their kids and their friends.” Courson was implying that homeowners — record numbers of whom continue to default — have a responsibility to make good. He wasn’t referring to the people who have no choice, who can’t afford their payments. He was speaking about the rising number of folks who are voluntarily choosing not to pay.

Such voluntary defaults are a new phenomenon. Time was, Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work. But the housing collapse left 10.7 million families owing more than their homes are worth. So some of them are making a calculated decision to hang onto their money and let their homes go. Is this irresponsible?

Businesses — in particular Wall Street banks — make such calculations routinely. Morgan Stanley recently decided to stop making payments on five San Francisco office buildings. A Morgan Stanley fund purchased the buildings at the height of the boom, and their value has plunged. Nobody has said Morgan Stanley is immoral — perhaps because no one assumed it was moral to begin with. But the average American, as if sprung from some Franklinesque mythology, is supposed to honor his debts, or so says the mortgage industry as well as government officials. Former Treasury Secretary Henry M. Paulson Jr. declared that “any homeowner who can afford his mortgage payment but chooses to walk away from an underwater property is simply a speculator — and one who is not honoring his obligation.” (Paulson presumably was not so censorious of speculation during his 32-year career at Goldman Sachs.)



There in lies the rub, as far as I can tell...

How can a so-called egalitarian society continue to exist if there are two sets of rules so blatantly paraded, as if pride was the motivator. They don't even try to hide it anymore. This bank bailout shows that there is no pretense of egalitarianism left. It's all about rewarding the powerful. Privatizing the benefits, socializing the costs.

It's like we stepped into Mr. Peabody's time machine and are walking around the slums of New York in the late 1890's. Back then, guilt struck Rockefeller and even Carney to such an extent ghat was possible, created a philanthropic infrastructure that saved them from the publics outrage.

It's great that Bill Gates has chosen that path but when will the other so-called masters of the universe that gravitate toward Wall Street see the light...

Don't hold your breath.


changed a tense...

[Hannah Bell]

1. Stupid SOB (in the story). Of course, he'd like *you* to stay chained to your misguided guilt

or desire to preserve your image as a "decent, honorable person".

That's the way the money men manipulate people. But they don't feel guilty themselves; they secretly think you're stupid fools who deserve to be used.

But the thing is, in the end, the practices at the top filter down to the masses. People who get repeatedly fucked over & taken advantage of stop caring about their obligations, their self-image, their community image, etc. & adopt the philosophy "everyone's out for themselves. Only money counts. A rich thief gets respect, a poor saint gets shat on."

Because that's what their experience has taught them. And it's taught them so because practices at the top filter down to the masses, as each one in turn tries to save himself, pass his ill fortune to someone else, do as he's been done by, etc.

The fish rots from the head.

[undergroundpanther]

13. Fish rots from the head..

Exactly!! Right with ya! Maybe not paying the credit card companies gouging you,ect..will make these pig fucker assholes wake up,when we treat THEM like they treat US!! Time to bite the hand that feeds and demands too much, and takes without ever giving back? How much more do you believe the wealthy pig fuckers"deserve" to have?
How do you make greedy asshole to let you breathe financially? Don't pay him. If everyone refused to pay up what would the plutocrats do?

They would do anything to keep themselves wealthy.

[dotymed]

19. Unfortunately

not "everyone will do this. Probably only a small percentage of people. They (corporations) passed the "new bankruptcy bill" so they will get their money back one way or another. It may be time time to do a "hostile takeover", just like "they do."

[CaliforniaPeggy]

2. K&R. (nt)

[arcadian]

3. Corporatism is the new religion

[WCGreen]

4. The problem is far too many of us are buying into this...

I thought that the surge toward Obama in '08 would be the beginning of a shift back toward egalitarianism but I fear that momentum has been stifled.

[WCGreen]

5. Shameless kick...

[WeDidIt]

6. If my home goes way underwater

I'll walk away from the mortgage without a second thought.

It's business.

[LuckyLib]

10. And this is what folks should be told. Screw the lenders and keep your own

head above water. Our culture has brainwashed folks into thinking that mortgage default is a reflection of your weak character and lack of initiative. Once the writing is on the wall, there is no use sacrificing the rest of your livelihood to continue to fund the criminal banking industry.

[WeDidIt]

12. Corporations default on contracts all the time.

When defaulting on a contract is in the best financial interest of a company, that company will ALWAYS default on the contract.

People had better realize, you do what is in your best financial interest.

I've known people who had outstanding credit and were able of getting a mortgage on a second home with a better price and a better interest rate than their current home. Once they did that, they defaulted on the first mortgage and walked away.

It's just business.

[dotymed]

20. Maybe, we should

all "incorporate", that way, we can't be held personally responsible for these loans. Just the entity that no longer exists, it is a person, dead maybe. We could change the name and re-incorporate to make more loans.....Would that work?

[Flatulo]

29. I hope you enjoy fucking over the rest of us taxpayers who will

have to make your bank whole again.

[Raineyb]

31. The banks are the least of my concerns. Frankly we should be breaking them

up in the first place not helping them get even bigger than too big to fail.

[Flatulo]

42. I agree with you there, and frankly I do not do business with banks.

Credit unions are the way to go. They are amongst the most conservative of financial institutions (conservative in the sense that they will not place your funds at undue risk).

If every bank disappeared tomorrow I would not lose a minute of sleep.

[anonymous171]

7. Chomsky calls it "really existing" free market doctrine. nt

[WCGreen]

8. I like that...

[Odin2005]

9. K&R

[Hekate]

11. KnR.

[Dr.Phool]

14. Kick & Rec!

[pezDispenser]

15. I don't normally post

Hell, this may be my first post - dunno, but I read every day.
 Right now my wife and I are in this situation.  We live in
Phoenix and bought at the top of the market (2005).  For 8
damn months we had to stand in line Saturday mornings and get
in the lottery to buy a house - 2 lucky ones a week where
chosen normally.  Lose, well try again next week - and oh yea,
the price just went up $2K.  Finally, we won and got our home
and are very happy with it.  We bought within our means on a
30 year fixed rate loan and thankfully haven't had any trouble
meeting the mortgage.  The only problem - our house which we
purchased for $190K is now worth 70K by our own banks
estimate.

I know, give me the argument that a house isn't an investment
- its a place to live, eventually it will go up, blah blah
blah.  Drive down the street and see what we could buy for
$200K now - alot more than what we currently have; all without
the negative equity.  I need to talk to a lawyer and find out
what my real options are.

[CaliforniaPeggy]

16. Welcome to DU!

This IS your first post, and you've picked an excellent thread to begin.

:hi:

[pezDispenser]

17. CaliforniaPeggy

my new favorite person on DU.

:pals:

[KharmaTrain]

21. Get A New Assessment

Welcome to DU...sorry to hear of your plight and it's one I've seen happen to many in my area. As you state, you bought in a market where everyone thought housing prices would continue to rise...surely the 200k would be worth double in 5 years. And many realtors and banks also went for that ride as the higher prices meant higher commissions. No one thought the bottom would fall out...or if they did, they didn't care cause you strike when the iron is hot.

A good thing is you took a 30-year fixed...too many got into "creative financing" that stuck them with higher payments while the equity value crashed...and unfortunately many have ended up homeless.

My kids found a house...it went for $200 two years ago and they got it for $125...along with the first-time home buyers deduction. Thus there is a little sunshine in this real estate bust. There'd be no way they could have afforded this home at the market peak.

You may want to check and see when your next property assessment is...hopefully the immediate result will be lower property taxes, but you may also be able to renegotiate your loan. I suspect that the market will rebound in time...not back to the go-go days of the past decade, but the low prices are also a symptom of a poor economy...when that picks up so will the equity value of your home.

[wolfgangmo]

24. My wife and I bought our first house in 2006.

We picked it up for a high price in this area for what it was but that was the market. We decided on a 30 year fixed within our means. It is 800 square feet. 100 years old and needs serious repairs. Either of our incomes could afford the mortgage, taxes, etc... but then...

...then I got hit in traffic, lost my job (I couldn't do it anymore and my boss kept me on full insurance as long as she could without losing her job so I got no complaints there), and the money for the repairs went away. Along with my health. With the job went my insurance and the auto insurance company says that there is nothing wrong with me based on my MRI (which clearly shows spinal injury and damage to nerves) And then the economy crashed (crashed: noun. a euphamism for stolen).

We are looking at losing this house because the repairs that we can't afford are becoming serious and so the house may soon be condemned, losing all our money (20% down) and time put in so far and ... for what? I look at the houses in the area and realize that if I could get the credit I could move into a decent house at a lower price and mortgage payment.

Here is my new motto regarding anyone who manages insurance companies or banks. Given that they are acting like sociopathic animals, or mad dogs if you will, then it logically follows that... well, let's just say that we put mad dogs down.

[1monster]

25. Banks ALWAYS down play the value of a property in which they hold or are planning to grant/hold

a mortgage.

Get an honest real estate appraiser... not one who works for the banks and not one who works for the property tax appraiser.

Then get one by a local realtor.

Add the two assessments together and divide by two. That's the realistic market value of your home.

edit for clarity

[dotymed]

18. Well said

and so very true. I think it is perfect that these "financial institutions" are getting a taste of their own medicine.

[sulphurdunn]

22. A spokes drone for Morgan Stanley said,

when referring to their lenders, “This isn’t a default or foreclosure situation. “We are going to give them back the properties to get out of the loan obligation.” :rofl:

[butterfly77]

23. The only thing I have to say about that is..

Student loans..

[wolfgangmo]

26. A yes

Reagans solution to permanently fucking the middle class in America.

If there were any justice in the world that mans' museum would be burning as we speak and his entire genetic heritage would be gutted and hung from the nearest light post.

[WT Fuheck]

27. What are you, some sort of commie?

[Flatulo]

28. When you default on your mortgage, your neighbor ends up paying for it.

The banks are never going to lose this battle. If people walk away from their obligations (yes, obligations - you did agree to repay the loan), then the banks will simply go back to Uncle Sam and hold out their hand and be made whole again, courtesy of the taxpayers.

I bought a house in 1986 for $131K. One year later it was worth $60K. I had an 11.75% note, and there was absolutely NO HELP for people who were under water. No way to refinance, no help from the government. We had to eat a big helping of shit every month for years until the market came back.

Don't you think it hurt to make a $1400/month payment while new buyers were coming in and picking up these places for half price? My neighbors were living in identical units for $700/month.

People who default on their obligations for no other reason than they don't like that value of their investment has changed - I have a bulletin for you. TOO FUCKING BAD. It happens.

I hope all you whiners enjoy fucking the rest of us over. If this is what Democrats have sunk to, then count me out. Ban my ass from this site right now and fuck all of you.

Acting like a greedy, whiny asshole just because bankers do it is NOT OK, and may God have mercy on all of us if your children are learning this abhorrent behavior.

[bertman]

30. It's sad, Flatulo, but as Bill Maher says "New rule". This a cultural transformation that has

been wrought by the Alphas who give the rest of us an example to live by.

Our children are learning this and other very bad lessons every day. Fortunately, they are also learning some good ones by seeing our efforts to help those who are so bad off in Haiti.

[Flatulo]

32. The right approach would be to take the bankers' bonus (our) money back

via the tax code.

If American businessmen are such bad examples, let's make good examples out of them by confiscating their ill-gotten gains and incarcerating them.

Two wrongs do not make a right. I know it's a quaint notion, but I think stealing from the rich is still stealing.

[Raineyb]

34. Why is it stealing when the little guy does it to banks but when corporations

walk away from their commitments and screw over their workers, their smaller creditors, their customers and then rise out of the ashes and continue business as another entity it's just business as usual.

[Flatulo]

38. It's stealing in both cases.

Because some else steals, it is not OK for you to steal.

What the christ did your parents teach you???

Besides, you are not hurting the banks at all. It is exactly the same as stealing from your neighbors.

[bertman]

35. It is a quaint notion. But it's a good one. The problem is that the game has changed and

We The People no longer have recourse against these guys. The Obama administration's Treasury branch is nothing but Rubin protoges who are making sure that no one gets in the way while the loot is being loaded onto the private jets and yachts that the Banksters own.

Two wrongs don't make a right. But the powerless have to do something to fend off the predators.

[Flatulo]

43. When home values were rising, no one was...

bitching about the rottenness in the system.

Rampant speculation was just fine as long as values kept rising.

[BR_Parkway]

37. How does that fix someone being upside down in a mortgage? I think

one of the biggest problems here is this expectation that values are going to come back. What worked for you in 1986 in waiting for prices to rise again isn't going to happen again. It's been labeled unsustainable for a reason, it couldn't be maintained. People don't have the incomes (even without the current unemployment crisis) to be able to afford those prices, the days of the very creative loans are over - it's just not going to happen again in this lifetime - $300,000 for a "starter" home?

Even sadder to me than the one's who "couldn't see it coming" are the one's holding out "for it all to come back"

[Flatulo]

41. Fixing someone's underwater investment isn't the issue.

The issue is that walking away from your mortgage doesn't hurt the banks - it hurts your fellow citizens.

First, it hurts them because foreclosed homes drive down the value of every home in the area forcing them even further underwater. Second, it hurts them because they will eventually have to bail out the failed lenders.

Investments go bad. That's life. I truly am sorry for everyone who believed that their home value would rise forever. But I don't recall anyone bitching when their property was rising in value. It's only when they fall that they whine about the unfairness of it all.

I know people who flipped their homes 2, 3 or more times. They were drunk on the profits they were taking. Now that they are stuck, they're crying in their beer.

[galileoreloaded]

33. You have forgotten the most important point....

government continues to pretend we have laws, and we continue to pretend we are following them. Biggest crooks in the system (SEC, FINRA, FED) are tacitly approving the largest theft in a generation, and you are worried about people paying off mortgages. Dude, don't know where you have been, but the world (and peoples value systems)up and changed out from under you. Who gives a shit about credit or ratings anymore??

[Flatulo]

39. Sorry, but I think you have it wrong. The most important point

is that it is wrong to screw your fellow citizens just because your investment went bad.

Sorry, but there is just no way around this.

[TexasObserver]

36. Recommend

[blindpig]

40. A Note of Appreciation From the Rich

A note of appreciation from the rich

By Author Unknown

21/09/08 "ICH' -- - Let's be honest: you'll never win the lottery.

On the other hand, the chances are pretty good that you'll slave away at some miserable job the rest of your life. That's because you were in all likelihood born into the wrong social class. Let's face it -- you're a member of the working caste. Sorry!

As a result, you don't have the education, upbringing, connections, manners, appearance, and good taste to ever become one of us. In fact, you'd probably need a book the size of the yellow pages to list all the unfair advantages we have over you. That's why we're so relieved to know that you still continue to believe all those silly fairy tales about "justice" and "equal opportunity" in America.

Of course, in a hierarchical social system like ours, there's never been much room at the top to begin with. Besides, it's already occupied by us -- and we like it up here so much that we intend to keep it that way. But at least there's usually someone lower in the social hierarchy you can feel superior to and kick in the teeth once in a while. Even a lowly dishwasher can easily find some poor slob further down in the pecking order to sneer and spit at. So be thankful for migrant workers, prostitutes, and homeless street people.

Always remember that if everyone like you were economically secure and socially privileged like us, there would be no one left to fill all those boring, dangerous, low-paid jobs in our economy. And no one to fight our wars for us, or blindly follow orders in our totalitarian corporate institutions. And certainly no one to meekly go to their grave without having lived a full and creative life. So please, keep up the good work!

You also probably don't have the same greedy, compulsive drive to possess wealth, power, and prestige that we have. And even though you may sincerely want to change the way you live, you're also afraid of the very change you desire, thus keeping you and others like you in a nervous state of limbo. So you go through life mechanically playing your assigned social role, terrified what others would think should you ever dare to "break out of the mold."

Naturally, we try to play you off against each other whenever it suits our purposes: high-waged workers against low-waged, unionized against non-unionized, Black against White, male against female, American workers against Japanese against Mexican against.... We continually push your wages down by invoking "foreign competition," "the law of supply and demand," "national security," or "the bloated federal deficit." We throw you on the unemployed scrap heap if you step out of line or jeopardize our profits. And to give you an occasional break from the monotony of our daily economic blackmail, we allow you to participate in our stage-managed electoral shell games, better known to you ordinary folks as "elections." Happily, you haven't a clue as to what's really happening -- instead, you blame "Aliens," "Tree-hugging Environmentalists," "Niggers," "Jews," Welfare Queens," and countless others for your troubled situation.

We're also very pleased that many of you still embrace the "work ethic," even though most jobs in our economy degrade the environment, undermine your physical and emotional health, and basically suck your one and only life right out of you. We obviously don't know much about work, but we're sure glad you do!

Of course, life could be different. Society could be intelligently organized to meet the real needs of the general population. You and others like you could collectively fight to free yourselves from our domination. But you don't know that. In fact, you can't even imagine that another way of life is possible. And that's probably the greatest, most significant achievement of our system -- robbing you of your imagination, your creativity, your ability to think and act for yourself.

So we'd truly like to thank you from the bottom of our heartless hearts. Your loyal sacrifice makes possible our corrupt luxury; your work makes our system work. Thanks so much for "knowing your place" -- without even knowing it!

[lunatica]

44. You should start a thread with this

Even if it gets flamed.

Thanks for this post! Everything you say here is true. We're beginning to wake up to find that we've been played. We've been ignorantly participing pawns in a lose lose game (for us) which benefits the wealthy. We've been manipulated and rewarded with crumbs and punished but we're becoming aware of it. That awareness needs to be disseminated.

The time has come to decide what we do now. Keep playing our no win game or stop playing it.

It's not that hard a decision once you see the truth.