In the piece two weeks ago, I hat-tipped a blog called Credit Writedowns for helping me solve the strategic default puzzle. The main blogger there, Edward Harrison, continues to do solid investigative work. Below are some of the anecdotes he recently reported (underscore emphasis mine). After reading them, I think you'll understand my mood:
- My 25 year old niece had $10,000 of outstanding credit card debt. Recently, she told the bank she couldn't pay. She is not unemployed so the 'hardship' is all relative. Nevertheless, the bank offered her a concession which she refused. They offered another concession, she refused again. Finally, they told her if she paid $150/month for 2 years (total of only $3600 with no interest), they would call it paid in full! She accepted in a heartbeat. It is less than a month later, and she celebrated her good fortune by going on a cruise to Hawaii.
- A friend owns a small manufacturing co. He tells me of one of his female employees who was saddled with a $450,000 home she purchased almost five years ago with no down pmt. One year after her purchase she pulled $75,000 home equity and purchased 'fun stuff' including a boat. She recently walked away from the house (now saddled with $525K mortgage), purchased a new house for $200,000 (in her sister's name) and kept all the goodies purchased from the home equity withdrawal. With the much lower mortgage payment she just bought a new car.
- Almost everyone in my "survey" is aware of, or knows someone living rent free in their home for an extended period of time, having stopped paying their mortgage. Many of these free boarders are spending lavishly on non-essentials. My hard-working part-time assistant knows two different 35+ yr olds who have enjoyed over 9 months (one is up to month eleven) of rent-free living in very nice homes they purchased in 2004/2005! Both are employed and both enjoy a non-frugal lifestyle. My assistant wonders if he should do the same or have me pay him more so that he too can enjoy the 'good life'.
- My sister is a nurse with 25+ years on the job. She told me of a young couple that she is good friends with that both work at her hospital making a decent joint income. They didn't like the fact that they grossly overpaid for their 3000 sq ft home in 2006. They stopped making hefty monthly payments six months ago and haven't yet been contacted by the bank. They have decided to wait until contacted and then walk away. In the meantime, they just returned from NYC from a week vacation in the Big Apple.
- My brother-in-law wanted to know if he should stop making payments on everything. He lives in Virginia and his carpentry skills are not as marketable as they were in the height of the boom. He and his wife's best friend have lived close-by for many years. For the past 13 months since they strategically decided to stop paying their mortgage, they had yet to be contacted by their bank. Not even one letter! My brother-in-law doesn't understand how they get to pocket the mortgage and spend carefree, including a 10-day Caribbean vacation.
Apparently there are lots more anecdotes of this type - potentially "millions of similar stories across the country."
Rent free living eh?
ReplyDeleteThey bought the homes in 2004/2005 and now pay no rent. Bank hasn't contacted them.
All is good right?
Legal problem is they pay the difference between the mortgage and what the bank gets for the property in a short sale.
Their wages are garnished. They can do prison time. There is nothing free in this world.
Everything comes at a price.
Seems to me this article of anectdotal stories was written by one of those late night tv infomercial guys that tells people how to profit from the collapsing real estate market with no money down. Remember Carlton Sheethead?
Wonder what he's doing these days.
My guess is that they will be called on their debt eventually and be forced to work off their debt in the NWO...like slaves.
ReplyDeleteone day soon this whole ponzi sceam will come down
ReplyDeleteand it wont be funny or predictable
many will lose everything when hypeinflation kicks in
this whole article is a joke
this is a plan of disaster
for many of us that live frugile and buy gold
they have guarnteed our fortune
thanks we wont feel sorry or cry for you
just laugh as im sipping tea
and buying your goos for nothing
people wont beleive the hyperinflation many will go insane
in the end threw corruption and the repeal of glass stegal this was all easy to predict
and whats coming next
good luck fdr
goods sorry for above article
ReplyDeletealso dead beat liars and cheats
this is a hack article
meanwhile all the wallstreet people
and washingthon crooks arent mentioned
the person that wrote this article is an asshole
he is another reason why this will end in complete collpase
blame the kid for haveing candy with no mention of thge adult who did nothing
buy gold prepare
i meet so many americans that are delusional
cant wait to see them mad when they lose everything
of coarse ill say nothing just go in my house and laugh at how dumtheyve become
and theres millions of them
enjoy your fema camps
fdr
It's not surprising that the sheeple get their nose out of joint when one of their own wakes up, sees the abattoir up ahead and makes a run for it.
ReplyDelete"Baaaaaaaaaaaaaa they wail... you just can't just walk away. That's criminal!"
But when Banksters & Businesses pull off scams right before their eyes it's okay as long as they use herd soothing terminology like "Restructuring"
This failure & corruption is also highly accepted and rewarded by governments.
So listen up Joe & Jane citizen.
It's not your fault.
You were simply born on the wrong side of the banquet table.
You were never intended to partake in the feast.
You are the feast!!!
And if the only way to keep your ass of the BBQ
is to bolt, then so be it.
You have a social responsibility to go into that dark night kicking and screaming.
F**k the banks
F**k the govt
F**k the herd
9:09 absolutely.
ReplyDelete9:09 you are so right. The sheeple so believe that they must pay their debt to the bankers. The FEDS create money out of thin air and the citizens are trained to pay back the air with massive compounded interest. The only reason why interest rates are so low is for the citizens to go into debt heavily so they can go to work and pay of the sham. If ALL the "liars and cheats" stopped paying the debt to these criminals, the criminals would have the citizens turn against each other. Sort of like the DUMB MEDIA trained citizens posts ABOVE. Man, you people have been trained well!
ReplyDelete7:38 We do not incarcerate U.S. citizens for debt with the exception of taxes. If so, can you site your sources please. We have no debtors prison in the U.S.
ReplyDeleteIf this is a "trap", I hope it traps the ones not paying what they owe, and not those of us who are paying- only to lose it to some future law. (Cap&Trade)
ReplyDeleteThe Politicians have raided the treasury. The length of time this can go on is finite. Maybe years, but when it ends, it will be bad. First they undermined the religion then the moral code that holds democracies together.
ReplyDelete7:38 We do not incarcerate U.S. citizens for debt with the exception of taxes. If so, can you site your sources please. We have no debtors prison in the U.S.
ReplyDeleteTaxes AND the exception of child support
Corruption breeds corruption.
ReplyDeleteOr you might call it "trickle down corruption".
Yes if the FED can print money out of thin air then why can't the rest of us do the same thing?
People are simply waking up to the SCAM that they are living in and the PONZI dominoes are falling.
The stories sound about average for the US sheeple. After all, the sheeple believe 911 was a bin ladin job, bullets make 90 degree turns inside a body ala the magic bullet theory, OK City was by a lone fertilizer bomber and those religious fanatics in Waco got was coming to them.
ReplyDeleteThe sheeple will do or say anything their tv's tell them to do. And what would that be? Spend, spend, spend, the sheeple need a new flat screen tv or a vacation in paradise, never mind the mortgage, car payment, fill in the blank.
For those of living in reality, we know how the sheeple behave, we have to see them in public, they all act as though they are zombies, and yes, they are. The sheeple are so dumbed down, they have become idiots.
We are screwed...
Damn it! Damn it! Damn it! And I paid my house off in 03. I wonder if I could get a new mortgage?
ReplyDeleteVagrancy is a crime punishable by up to 60 days in prison. Btw, you will be billed $10 a day for your stay in prison which means you owe us $600.
ReplyDeleteStaying in a home in default is not Vagrancy.
ReplyDeletePlease get your facts straight. You cannot go to prison for a debt, not even taxes (it is criminal not to properly FILE); the exception to the debt rule is the whore you knocked up on a one night stand and now are paying 18 years for your mistake.
"A vagrant is a person in a situation of poverty, who wanders from place to place without a home or regular employment or income. Many towns in the Developed World have shelters for vagrants. Common terminology is a tramp or a 'gentleman of the road'.
The story is correct at least in Cali...Plenty of friends walking away with the goodies they got on credit and not paying their mortgages...BUT...It will revolve they never modified their spending habits AND they no longer have ANY credit...I recently got a nice German car at 2% while a friend went and tried to get an average car, the best they offered him was 13% because of his bad credit.
ReplyDeleteSo one way way or anher they'll get those people back...Plus the things these people spend their money on is stupid...Boats they never use...RVs that have COBWEBS...Huge tvs that give out after 4 years etc etc.
I don't feel sorry for any of my friends...In fact many talk about getting back at the banks this way but the reality is they are doing it out of lack of character and greed.
I'm not talking the ones that have lived there 15 years or lost their jobs etc...I'm talking about the people that overbought on purpose and then were later shocked with the sticker price when it became due.
Sorry people we have a "Culling of the Herd" coming and we sorta/kinda need it.
Don't know what a "Culling" is? Look it up because it will be used in the future quite often.
1:07 said:
ReplyDelete"I recently got a nice German car at 2% while a friend went and tried to get an average car, the best they offered him was 13%"
Well aren't you just so SPECIAL!
You get to go to the front of the line.
You'll probably even get to become Lamb Chop instead of hamburg on the NWO's grille.
Lucky you... but be careful bending over when ya sign that bank contract...
You know what can happen to sheep.
If the banks can privatize profits but socialize their losses, then I feel no guilt or sympathy walking away from my property. Strictly a business decision. Good thing I live in a anti-deficiency / non-recourse state.
ReplyDeleteI wonder where these people learned these tricks? Could it have been from watching the banksters? I hope they all had fun on their flings. Ain't gonna be many more opportunities to do such things.
ReplyDeleteMichael
And here I am buying a house I can afford. I was approved for $400,000 (I dont know how), but bought a $160k house anyway. The realtor scammer was really pushing the 400k houses as an "investment" and I told her that the market will crash soon (in 2003). She laughed. I have a car thats paid for and I try to pay cash instead of credit cards. Im such a retard. I could be living like these jerkoffs right now.
ReplyDelete"but the reality is they are doing it out of lack of character and greed...
ReplyDeleteSorry people we have a "Culling of the Herd" coming and we sorta/kinda need it".
The story above appears to Come from a ‘gold bugs” website . Supporters of “Austrian Economics Theory“ are just like their first cousins the Neo-Cons and love all this type of hype justifying the need for population culls for the stupid sheeple as unavoidable but understandable, unavoidable and necessary.
The prophets of gold are crying in the wilderness of debt Your debt sins are all your own fault !
After all the bludgers have been rorting the system and the over population deserves to be culled for their stupidity in believing in fiat money and the temptations of the banksters.
But in the new reformed future capitalist heaven running on a gold currency ,the prudent ,the just and the clever , that own gold will have all they deserve as the surplus unemployed debt ridden sheeple are separated from the goats with gold .
The greedy goats are speculating on gold being properly "restored" to its true value ,and as gold value like diamond value is forever, they may never have to work again as new kings of the shithouse after the culling.
All in accordance with correct and moral Austrian Economic Theory of precious metal money valued in accordance to the guide lines for precious money embedded in the true restored American constitution .
7:38 We do not incarcerate U.S. citizens for debt with the exception of taxes. If so, can you site your sources please. We have no debtors prison in the U.S.”
ReplyDeleteOf course that is officialy current practice in the good times , but the laws are subject to change and America could easily go back to old laws and have fema camps for vagrants and the unemployed.
But they will not be called ‘debters prisons”or “workhouses” .
“The law in its majestic impartiality treats the rich and the poor alike for sleeping under bridges and stealing bread”
That’s why in America proportionaly more people are in Jail in the U.S. Than in Stalin’s Russia.
The top G.S . banksters will not be sent to “debtors prison” to pay back the billions they stole by fraud.They will pay a $50 million dollar fine out of the free money billion dollar handouts given to them by government.And “laugh all the way to the bank” as they say.
Now take that Milkin guy, he "paid his debts" to society for wholesale billion dollar bankster robbery and now is free , back leading the good life again .
But at least he wasn’t sent to a debtors prison ! .
Hey Jesus Freak, are you serious?
ReplyDeleteHow could they end up doing prison time?
Seems to me the worst that could happen is they could be haunted by a deficiency judgement.
This will probably be a unique depression, with severe inflations/deflations, depending on which commodity you are buying.
ReplyDelete