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"And let me emphasize, any homeowner who can afford his mortgage payment but chooses to walk away from an underwater property is simply a speculator -- and one

by lucifer 17y ago

"And let me emphasize, 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 obligations." - Paulson Every time these GoldmanSachs critters open their mouth is yet another oblique reminder that the masses are brain dead.

chrisgoodrich 17y ago
"Do as I say, not as I do." comes to mind.
- simon_ 17y ago
  Has Goldman Sachs ever missed an interest payment or otherwise failed to met a financial obligation? The ire in Paulson's quote is directed not against speculators generally, but speculators who don't live up to their agreements when things move against them. That's not really something Goldman is guilty of. ...As much as people would like them and everyone ever associated with them to be guilty of everything.
  - steveplace 17y ago
    Has Goldman Sachs ever missed an interest payment or otherwise failed to met a financial obligation? I'd give Goldman a pass. They really are the best at what they do. But if we expand it further to the rest of the financial industry, what can we see? Back in November, 33 companies skipped their TARP payments. Just recently, Blackrock walked away from a Manhattan building as they couldn't refinance the debt. And that's the problem-- banks and homeowners get into financial, not moral contracts. If the loss off default is smaller than the loss of staying in the contract, you stop paying. Companies do it all the time, and homeowners should view it as an out.
    - yummyfajitas 17y ago
      "...any homeowner who can afford his mortgage payment but chooses to walk away..." "Just recently, Blackrock walked away from a Manhattan building as they couldn't refinance the debt." Were the companies which skipped their TARP payments capable of paying? There is a difference between being unable and unwilling to pay.
      - timmaah 17y ago
        "As of 30 September 2009, BlackRock's assets under management totaled US$3.2 trillion across equity, fixed income, cash management, alternative investment and real estate strategies" Sounds like unwilling to me. Just because they couldn't refinance that debt doesn't mean they are unable to pay it.
        yummyfajitas 17y ago
        I'm not sure why you believe Blackrock can divert assets from one use to another. For instance, if Blackrock manages two pension funds (e.g., Target Retirement 2050 and 2040), they can't raid TR2050 to pay for obligations owed by TR2040.
  - DenisM 17y ago
    They do live up to their agreement. The non-recourse loan agreement spells: the loan is secured by the property the loan it taken against, and if the borrower defaults the property is repossessed by the bank. The recourse-loan agreement spells: the loan is secured by the property the loan it taken against and all borrower's assets (except secured protected assets such as 410k or IRA). If the borrower defaults the property and assets are repossessed by the bank via bankruptcy proceedings. The Paulson's quote is exactly an attempt to guilt people into taking more responsibility than their contract requires. Something GS would never do.
  - daniel-cussen 17y ago
    Morgan Stanley (a different firm, granted), strategically defaulted on some buildings in San Francisco because they were underwater on the mortgages. They stopped paying and gave the buildings back to the loaner.
  - kls 17y ago
    >Has Goldman Sachs ever missed an interest payment or otherwise failed to met a financial obligation? No they got bailed out before they had to. A luxury that no homeowner who defaults has yet seen.
johnrob 17y ago
Didn't he short the housing industry? You'd think he'd want people to walk from their mortgages.
- steveplace 17y ago
  Different Paulson.
GabrielBen 17y ago
With finances you always have to sit down and do the math, which could be already a fair ammount of work. I think that this situation happens in part for the "moral"restrictions, in part for the credit rating, but also because of the effect that once that you invested a certain ammount of money in something, you keep pouring money on it even when its not good for you.( the famous throwing good money after bad money) "i have already commited to buying this house, and pay this much already, so i might as well put more". Im sure many of the readers here have put money into fixing their computer several times before acknowledging that to buy a new one would be cheaper :).
- wjy 17y ago
  Also, the financial aspect is just one part of the total consideration. I've been in my house for ten years, and we've made a life here. We have quite a bit of stuff in this house. It would be a huge pain in the ass to move, as well as disruptive to my family, my son's school life, etc. Being underwater today doesn't imply being underwater next year. A home's value may return, so long as you didn't buy at some idiotically high price.

by lucifer 17y ago

chrisgoodrich 17y ago

"Do as I say, not as I do." comes to mind.

simon_ 17y ago
Has Goldman Sachs ever missed an interest payment or otherwise failed to met a financial obligation? The ire in Paulson's quote is directed not against speculators generally, but speculators who don't live up to their agreements when things move against them. That's not really something Goldman is guilty of. ...As much as people would like them and everyone ever associated with them to be guilty of everything.
- steveplace 17y ago
  Has Goldman Sachs ever missed an interest payment or otherwise failed to met a financial obligation? I'd give Goldman a pass. They really are the best at what they do. But if we expand it further to the rest of the financial industry, what can we see? Back in November, 33 companies skipped their TARP payments. Just recently, Blackrock walked away from a Manhattan building as they couldn't refinance the debt. And that's the problem-- banks and homeowners get into financial, not moral contracts. If the loss off default is smaller than the loss of staying in the contract, you stop paying. Companies do it all the time, and homeowners should view it as an out.
  - yummyfajitas 17y ago
    "...any homeowner who can afford his mortgage payment but chooses to walk away..." "Just recently, Blackrock walked away from a Manhattan building as they couldn't refinance the debt." Were the companies which skipped their TARP payments capable of paying? There is a difference between being unable and unwilling to pay.
    - timmaah 17y ago
      "As of 30 September 2009, BlackRock's assets under management totaled US$3.2 trillion across equity, fixed income, cash management, alternative investment and real estate strategies" Sounds like unwilling to me. Just because they couldn't refinance that debt doesn't mean they are unable to pay it.
      - yummyfajitas 17y ago
        I'm not sure why you believe Blackrock can divert assets from one use to another. For instance, if Blackrock manages two pension funds (e.g., Target Retirement 2050 and 2040), they can't raid TR2050 to pay for obligations owed by TR2040.
- DenisM 17y ago
  They do live up to their agreement. The non-recourse loan agreement spells: the loan is secured by the property the loan it taken against, and if the borrower defaults the property is repossessed by the bank. The recourse-loan agreement spells: the loan is secured by the property the loan it taken against and all borrower's assets (except secured protected assets such as 410k or IRA). If the borrower defaults the property and assets are repossessed by the bank via bankruptcy proceedings. The Paulson's quote is exactly an attempt to guilt people into taking more responsibility than their contract requires. Something GS would never do.
- daniel-cussen 17y ago
  Morgan Stanley (a different firm, granted), strategically defaulted on some buildings in San Francisco because they were underwater on the mortgages. They stopped paying and gave the buildings back to the loaner.
- kls 17y ago
  >Has Goldman Sachs ever missed an interest payment or otherwise failed to met a financial obligation? No they got bailed out before they had to. A luxury that no homeowner who defaults has yet seen.

johnrob 17y ago

Didn't he short the housing industry? You'd think he'd want people to walk from their mortgages.

steveplace 17y ago
Different Paulson.

GabrielBen 17y ago

With finances you always have to sit down and do the math, which could be already a fair ammount of work. I think that this situation happens in part for the "moral"restrictions, in part for the credit rating, but also because of the effect that once that you invested a certain ammount of money in something, you keep pouring money on it even when its not good for you.( the famous throwing good money after bad money) "i have already commited to buying this house, and pay this much already, so i might as well put more". Im sure many of the readers here have put money into fixing their computer several times before acknowledging that to buy a new one would be cheaper :).

wjy 17y ago
Also, the financial aspect is just one part of the total consideration. I've been in my house for ten years, and we've made a life here. We have quite a bit of stuff in this house. It would be a huge pain in the ass to move, as well as disruptive to my family, my son's school life, etc. Being underwater today doesn't imply being underwater next year. A home's value may return, so long as you didn't buy at some idiotically high price.