Wall St blames us for not paying mortgages while we're actually paying more than they're worth

[ck4829]

Wall Street and Republicans say "The economy is bad because the poor are lazy and aren't paying their mortgages!"

Whoa! Hold on there Jethro!

"One in five U.S. homeowners with mortgages owe more to their lenders than their properties are worth, and the rate will increase as housing values drop in states that have so far avoided the worst of the crisis, a new study shows.

About 8.31 million properties had negative equity at the end of 2008, up 9 percent from 7.63 million at the end of September, according to the study, released Wednesday by First American CoreLogic. The percentage of "underwater" borrowers rose to 20 percent from 18 percent.

Another 2.16 million properties could go underwater if home prices fall another 5 percent, the study shows.

First American said the value of residential properties fell to $19.1 trillion at year-end from $21.5 trillion a year earlier, with half the decline in California. Forty-three U.S. states and Washington, D.C., were included in the study."

http://news.yahoo.com/s/nm/20090304/ts_nm/us_usa_mortgages_study

[Turbineguy]

1. A guest on CNBC this morning

says that some people have a bright future in orange jump suits. Apparently the margin requirements Lehman had for themselves were were lower than for their customers.

[Kalyke]

2. We don't have debtors prisons anymore.

The only people who belong in orange jump suits are those who reside on Wall Street.

Main Street needs to get pissed.

[NashVegas]

4. I Think The Point They're Making

Is the different rates between margin calls (people who buy stocks with borrowed money and get 'called' to pay up) on stocks that sunk, and foreclosure calls.

[Turbineguy]

5. He was talking about

Wall Streeters.

[OPERATIONMINDCRIME]

3. If Ya Took Out The Mortgage, You Should Be Obligated To Pay It Regardless Of The Drop In Home Value.

The only time the drop in home value comes into play is if someone wants to move into a different home. As long as they're in their home, the home value itself is irrelevant as it relates to the home owner's obligation to pay back the money they borrowed to buy the home to begin with.

[msongs]

6. there ya go picking on greedy speculators again nt

[marew]

7. OPERATIONMINDCRIME, you are actually right.

And, over time, the value of the home will rebound undoubtedly. For those staying in their houses, the loss is only on paper. I lost a good bit in the dot-com debacle several years ago but it all came back. I just lost a bunch again... on paper. The sad cases are retired people trying to live off their 401k who hadn't switched to less risky investments as they got older.

[frylock]

8. the value of the home was grossly overinflated to begin with

[jmg257]

9. "Owe more then they're worth" should not be used as an excuse for not paying.

"Underwater" doesn't mean much unless you HAVE to sell. Likely there are those who thought their recent home purchase could be used as a short-time investment - bad move, that.

[Profprileasn]

10. Exactly.

And why do you owe more than they are worth? Did you buy at the wrong time? Or at they high did you see Equity (I like to call it "pretend" equity because it is nothing you really paid off) take it out through refinance or second mortgages because you had other things to spend it on? Your mortgage then not only covers your house but those things too. Hold onto your house and keep paying your mortgage, it may go back up in value. Maybe not but it's a roll of the dice like the stock market.