5 ms·

Homeowners in Foreclosure Find a Rent-Free Approach

27 points by mahipal 16y ago

tjmaxal 16y ago
Didn't these people learn in grammar school that two wrongs don't make a right?
- MichaelSalib 16y ago
  In economic terms, two wrongs can certainly make a right. In many cases, having these people move out would serve no purpose other than to destroy the houses' values as well as the values of the surrounding homes. People who stay in their homes prevent squatters from moving in and perform some maintenance. Banks often make economically foolish decisions regarding foreclosure for a whole host of reasons. Plus, after reading articles like http://www.mcsweeneys.net/links/panoramaexcerpts/Ali.html http://www.mcsweeneys.net/links/panoramaexcerpts/Ali.html regarding how mortgage servicers and banks deal with foreclosure, I'm disinclined to believe that they are ever acting in good faith.
  - tptacek 16y ago
    Wait, you're saying you came by your principles on this issue through a McSweeny's article about a couple who knowingly stated an income 12x their real income to buy a house that they could only hope to afford if the housing market continued to appreciate stratospherically, and who then blamed the economy when their completely untenable loan blew up? You do realize that it's perfectly reasonable to be disgusted with the mortgage originators, the Wall Street financiers, the CDO managers, the CDO manager's clueless investors, and the feckless homeowners who got into bed with them, right?
    - MichaelSalib 16y ago
      The article I linked to is not fiction. Do you have reason to believe that the attorney who wrote it was lying? And yes, I think the homeowners there pretty awful. But the banks didn't determine that they were awful before they acted in bad faith; they acted in bad faith from the get-go, for everyone, whether or not their actions merited such treatment. And from where I sit, it seems like the banks and servicers are the ones who completely failed to do any due diligence and then blamed the economy when their unsustainable loans proved, well, unsustainable. The average person is functionally innumerate. They are going to make poor decisions regarding quantitative matters, especially quantitative matters couched in ways that are deliberately obfuscated. This is not true of the average bank. I expect better from them.
      - tptacek 16y ago
        It's not fiction. But it's McSweeney's. It wasn't edited for accuracy or logic or fact-checking or bias; it was edited to make it read well. I like McSweeney's probably almost as much as you do, but would hesitate to cite it in an argument about economics! Your other two grafs don't actually rebut anything I said. Yes. Banks bad. Very bad! Also: require Thomas to sit on hold to wait to talk to someone in Bangalore about mortgage. Ridiculous fees, too! Bad! Unfortunately: still not OK to defraud them. Contracts with bad evil banks? Still valid.
        MichaelSalib 16y ago
        It wasn't edited for accuracy or logic or fact-checking or bias In general, I do not expect main stream publications to be able to edit articles regarding economics. Journalists and editors are astonishingly ignorant of basic economics, to say nothing of statistics or law. There's a reason that economics professor Dean Baker keeps an entire blog devoted to correcting the idiocies and distortions found in traditional reporting (see http://www.cepr.net/index.php/beat-the-press/ http://www.cepr.net/index.php/beat-the-press/ ); it is the same reason that economics professor Brad Delong regularly lambastes major newspapers on his blog by chanting "why, oh why can't we have a better press corps?" (see http://delong.typepad.com/sdj/better_press_corps/ http://delong.typepad.com/sdj/better_press_corps/ ). So the fact that this article didn't appear in the Washington Post (where I've read "fact-checked" articles which presumed that inflation does not exist) doesn't really trouble me. It is written by an attorney and officers of the court are generally subject to sanction if they misrepresent cases. I like McSweeney's probably almost as much as you do Um, I don't read McSweeny's; I read this article because it was linked from an economics/policy blog I respect. Unfortunately: still not OK to defraud them. I don't believe the behavior in question falls under fraud statutes. This is surprising: generally we expect corporations to act in their best interest taking full advantage of their rights under the law, even if doing so violates the spirit of the law. How odd that we apply such different standards to individuals.
        deleted 16y ago
        [deleted]
  - yummyfajitas 16y ago
    People who stay in their homes prevent squatters from moving in... Squatters living in a home owned by a bank prevent squatters from moving in?
    - MichaelSalib 16y ago
      There are different varieties of squatters. Drug addicted transients are not equivalent to small business owners with roots in the local community who happen to have an emotional attachment to that particular house. Given the choice of squatters, I'd prefer to have squatters with a non-zero income.
      - yummyfajitas 16y ago
        I'm taking issue with your language. It's not "their house", it's the bank's house. They are squatters themselves, so they don't keep squatters out. If you said "people who squat in homes they used to own may perform maintenance and keep out a worse breed of squatters than themselves", I would have had no objection.
      - tullius 16y ago
        I don't know what the probability of "drug addicted transients" moving into a foreclosed suburban house is, but I do know that people aren't going to be strongly incentivized to keep up maintenance on a house they will be vacating soon.
        MichaelSalib 16y ago
        Judging by http://www.theatlantic.com/magazine/print/2008/03/the-next-slum/6653/ http://www.theatlantic.com/magazine/print/2008/03/the-next-s... I'd say the probability is nonzero. And I'm pretty sure the owners described in the article will perform some critical maintenance like making sure vermin don't infest the house and fixing leaks because no one, not even a renter, wants to live in a place water rains down on them in their living room or where they have to dodge raccoons. Again, there are degrees of maintenance. They won't be incentivized to put in a new deck or repaint the whole house, but a lot of the value destruction associated with foreclosure has to do with simpler things: animals taking residence, water damage, thieves stealing the wiring/plumbing and ruining the walls in the process, etc.
  - MichaelSalib 16y ago
    I forgot that many people on HN can't distinguish between normative and positive claims, so let me clarify: I don't think this behavior is terribly ethical, but I do think it can produce more efficient economic outcomes. There are many of unethical acts that improve economic efficiency.
    - tptacek 16y ago
      I agree with you that the likely effect of them turning in the keys to their houses is that those houses will be vacant probably for the better part of a year, which will damage other good-faith occupants of neighboring houses and produce no economic good for either the lender or the buyer. I think the only thing I could really wish for here is a system that captures some of the funds that these people are spending on trucks or business schemes and, in exchange for some long-term plan to keep them in their houses, get them to start paying back into their commitments. It is certainly true that the financial system shoulders some of the blame for this untenable situation. A pox on all their houses, then.
      - MichaelSalib 16y ago
        a system that captures some of the funds that these people are spending on trucks or business schemes and, in exchange for some long-term plan to keep them in their houses, get them to start paying back into their commitments There have been several proposals that would accomplish this, including Dean Baker's Own to Rent ( http://tpmcafe.talkingpointsmemo.com/2007/08/19/own_to_rent_the_way_to_save_su/ http://tpmcafe.talkingpointsmemo.com/2007/08/19/own_to_rent_... ); I believe all of these proposals have been vociferously opposed by the finance industry. One reason is that it would probably force banks to mark down the values of their assets to something more realistic. I believe these proposals would be very popular though with the general public....
tptacek 16y ago
What these people are doing is exactly equivalent to what tendentious tenants do to avoid eviction. We almost uniformly hold those tenants in contempt; they're perpetrating a fraud. The only difference here is that it's banks holding the loans, not independent landlords. I see how you could sympathize with a ruthless defaulting homeowner; after all, what else are they going to do? Are we really asking them to vacate early solely to make the bank's job easier? On the other hand: what they're doing is morally indefensible, and any costs to the bank their behavior incurs is largely going to be borne by good-faith mortgageholders and new prospective good-faith home buyers. Maybe they shouldn't be bragging about this. Here's to hoping it catches up with them sooner than later.
- stellar678 16y ago
  I find it interesting that debt is always couched in moral terms for individuals, but business terms for corporations. Somehow it's immoral for individuals to work a system for their advantage, but it's standard operating procedure for a business.
  - tptacek 16y ago
    That's a straw man argument, isn't it? The fact that some pundit somewhere drew a line between Morgan Stanley's contracts and Joe Smith's contracts doesn't mean we have to be held to a different standard on Hacker News. Or, more directly: it's immmoral for businesses to violate contracts too. What's the rest of your argument?
    - MichaelSalib 16y ago
      The fact that some pundit somewhere drew a line between... As Felix Salmon points out ( http://blogs.reuters.com/felix-salmon/2009/11/30/the-worlds-largest-guilt-trip/ http://blogs.reuters.com/felix-salmon/2009/11/30/the-worlds-... ), we're not talking about some random pundit. We're talking about the President of the United States, the Secretary of the Treasury, and a long list of authoritative figures in civil life. Or, more directly: it's immmoral for businesses to violate contracts too. What's the rest of your argument? Given finite resources for law enforcement, we should prioritize investigation and prosecutions so that a small number of random losers who made a bad moral choice that probably harmed no one get investigated/prosecuted after the rich and powerful people who decided to abandon their own underwriting standards and helped destroy the economy.
icefox 16y ago
“We could pay the mortgage company way more than the house is worth and starve to death,” This implies that if the house was worth what they were paying that they would still starve to death and really they made a bad choice in buying the house in the first place. "But the couple also refinanced at the height of the market, taking out cash to buy a truck..." sigh...
- sethg 16y ago
  For every unwise borrower there is an unwise lender. My sympathies are more with the borrower, since the lender, as the side that supposedly hired people with financial acumen, bears a majority of the responsibility for assessing risk.
  - gsmaverick 16y ago
    In this case the problem lies with the political pressure applied by both Bush and Clinton on Fannie Mae and Freddie Mac to continue giving out more mortgages.
    - MichaelSalib 16y ago
      A bigger problem is the homeowners mortgage interest deduction. In terms of its stated policy rational, it is a complete joke, but modification let alone elimination remains political suicide.
  - tptacek 16y ago
    This simplification presumes that there are only two parties with stakes in a residential mortgage. That's not at all true. There are tens of millions of residential mortgages taken out in good faith and held in good standing, and they will absolutely pay in one way or another for the abuse of the system by either lenders or homeowners.
edw519 16y ago
“They’re all crooks." Let me see if I got this right... You borrowed money. Now you choose not to make the monthly payment that you have already agreed to pay. And spend that money on other stuff. And you call them the crooks?
- MichaelSalib 16y ago
  Maybe both parties are crooks? This is not a zero sum game...they can both be crooks at the same time.
  - kqr2 16y ago
    And unfortunately, the real "victims" in this episode are people who act responsibly by paying their mortgages and taxes while receiving very little interest on their savings.
- rjett 16y ago
  Even if banks and courts did have the manpower to evict these people faster, the deeper problem, as you pointed out, is this backwards logic and gross rationalizing. To try to address this, I think a campaign of linking fiscal responsibility to patriotism might be helpful. I suspect that many of these people would identify with being patriotic. Each mortgage payment these people make or at least each step these people take to work with the bank is a step in the right direction for our country. The actions of these people will inevitably hurt the rest of us in the long run.
  - MichaelSalib 16y ago
    I think a campaign of linking fiscal responsibility to patriotism might be helpful. Can you think of any cases where a campaign of linking something to patriotism has actually worked? I cannot. My sense is that many people would respond to such a campaign with rage: they'd point out that financial institutions and their shareholders made out like bandits with the various emergency programs and that no one ever said anything about BoA or GS being "unpatriotic". The double standard would appall many people I think. The actions of these people will inevitably hurt the rest of us in the long run. Are you certain that's true? Maybe the only way to convince banks that they should not completely abandon their own underwriting standards would be for them to suffer some more agony by having a few borrowers dick them around. Certainly, if they just moved out today, the homes they lived in as well as their neighbors would lose value, which would in turn hurt "the rest of us in the long run".
patrickgzill 16y ago
The banks don't want to foreclose, because they do better with "extend and pretend" ... until the day before the foreclosure they can still carry the worthless loan as an asset at 100% of its original value (if I understand this part of the process correctly). Who is the greater criminal? Some old lady living in a crappy $125K house in Florida--or bank execs who in concert with corrupt regulators are hiding billions in bad loans and meanwhile paying themselves 100K bonuses or more?
- tptacek 16y ago
  If you remove the word "criminal", which doesn't apply, and replace it with "bad actor", I'm going to go with: "they are both bad actors". Squatting in a $125k house you promised to pay for but now refuse to pay for is still bad. This is the same lazy argument that runs though any discussion of any abuse of any service anywhere. "Sure, I stole 10,000 credit card numbers --- but the credit card companies are evil organizations that prey on low-income people, and they're the ones that are going to end up paying!"
tjmaxal 16y ago
Imagine I decided to move into a foreclosed home and live there rent free until the banks could legally force me out? What is that called? It's stealing. Every month these people live in these houses they are stealing from the banks. Yes, the banks are at fault for creating the opportunity to get robbed but that doesn't justify the actions of these squatters. Would you say that a rapist is justified in raping someone because they acted in a sexually lewd manner? The "they had it coming" argument just doesn't hold water.
istari 16y ago
The Chinese sees the housing crisis from a different point of view: The US cheated China out of billions by selling them bonds backed up by inflated real estate, money saved up by hardworking Chinese. It's a completely different take on the situation. Someone had to provide the money in the first place. That someone sure as hell wasn't the banks, the banks were intermediaries. Often times that someone was a Chinese or German institution chasing higher interest rates with no clear understanding of what was being sold to them. Who benefited from the transaction? Whoever sold the home. A lot of foreign money came into the US and stayed in the US.

27 points by mahipal 16y ago

tjmaxal 16y ago

Didn't these people learn in grammar school that two wrongs don't make a right?

MichaelSalib 16y ago
In economic terms, two wrongs can certainly make a right. In many cases, having these people move out would serve no purpose other than to destroy the houses' values as well as the values of the surrounding homes. People who stay in their homes prevent squatters from moving in and perform some maintenance. Banks often make economically foolish decisions regarding foreclosure for a whole host of reasons. Plus, after reading articles like http://www.mcsweeneys.net/links/panoramaexcerpts/Ali.html http://www.mcsweeneys.net/links/panoramaexcerpts/Ali.html regarding how mortgage servicers and banks deal with foreclosure, I'm disinclined to believe that they are ever acting in good faith.
- tptacek 16y ago
  Wait, you're saying you came by your principles on this issue through a McSweeny's article about a couple who knowingly stated an income 12x their real income to buy a house that they could only hope to afford if the housing market continued to appreciate stratospherically, and who then blamed the economy when their completely untenable loan blew up? You do realize that it's perfectly reasonable to be disgusted with the mortgage originators, the Wall Street financiers, the CDO managers, the CDO manager's clueless investors, and the feckless homeowners who got into bed with them, right?
  - MichaelSalib 16y ago
    The article I linked to is not fiction. Do you have reason to believe that the attorney who wrote it was lying? And yes, I think the homeowners there pretty awful. But the banks didn't determine that they were awful before they acted in bad faith; they acted in bad faith from the get-go, for everyone, whether or not their actions merited such treatment. And from where I sit, it seems like the banks and servicers are the ones who completely failed to do any due diligence and then blamed the economy when their unsustainable loans proved, well, unsustainable. The average person is functionally innumerate. They are going to make poor decisions regarding quantitative matters, especially quantitative matters couched in ways that are deliberately obfuscated. This is not true of the average bank. I expect better from them.
    - tptacek 16y ago
      It's not fiction. But it's McSweeney's. It wasn't edited for accuracy or logic or fact-checking or bias; it was edited to make it read well. I like McSweeney's probably almost as much as you do, but would hesitate to cite it in an argument about economics! Your other two grafs don't actually rebut anything I said. Yes. Banks bad. Very bad! Also: require Thomas to sit on hold to wait to talk to someone in Bangalore about mortgage. Ridiculous fees, too! Bad! Unfortunately: still not OK to defraud them. Contracts with bad evil banks? Still valid.
      - MichaelSalib 16y ago
        It wasn't edited for accuracy or logic or fact-checking or bias In general, I do not expect main stream publications to be able to edit articles regarding economics. Journalists and editors are astonishingly ignorant of basic economics, to say nothing of statistics or law. There's a reason that economics professor Dean Baker keeps an entire blog devoted to correcting the idiocies and distortions found in traditional reporting (see http://www.cepr.net/index.php/beat-the-press/ http://www.cepr.net/index.php/beat-the-press/ ); it is the same reason that economics professor Brad Delong regularly lambastes major newspapers on his blog by chanting "why, oh why can't we have a better press corps?" (see http://delong.typepad.com/sdj/better_press_corps/ http://delong.typepad.com/sdj/better_press_corps/ ). So the fact that this article didn't appear in the Washington Post (where I've read "fact-checked" articles which presumed that inflation does not exist) doesn't really trouble me. It is written by an attorney and officers of the court are generally subject to sanction if they misrepresent cases. I like McSweeney's probably almost as much as you do Um, I don't read McSweeny's; I read this article because it was linked from an economics/policy blog I respect. Unfortunately: still not OK to defraud them. I don't believe the behavior in question falls under fraud statutes. This is surprising: generally we expect corporations to act in their best interest taking full advantage of their rights under the law, even if doing so violates the spirit of the law. How odd that we apply such different standards to individuals.
        deleted 16y ago
        [deleted]
- yummyfajitas 16y ago
  People who stay in their homes prevent squatters from moving in... Squatters living in a home owned by a bank prevent squatters from moving in?
  - MichaelSalib 16y ago
    There are different varieties of squatters. Drug addicted transients are not equivalent to small business owners with roots in the local community who happen to have an emotional attachment to that particular house. Given the choice of squatters, I'd prefer to have squatters with a non-zero income.
    - yummyfajitas 16y ago
      I'm taking issue with your language. It's not "their house", it's the bank's house. They are squatters themselves, so they don't keep squatters out. If you said "people who squat in homes they used to own may perform maintenance and keep out a worse breed of squatters than themselves", I would have had no objection.
    - tullius 16y ago
      I don't know what the probability of "drug addicted transients" moving into a foreclosed suburban house is, but I do know that people aren't going to be strongly incentivized to keep up maintenance on a house they will be vacating soon.
      - MichaelSalib 16y ago
        Judging by http://www.theatlantic.com/magazine/print/2008/03/the-next-slum/6653/ http://www.theatlantic.com/magazine/print/2008/03/the-next-s... I'd say the probability is nonzero. And I'm pretty sure the owners described in the article will perform some critical maintenance like making sure vermin don't infest the house and fixing leaks because no one, not even a renter, wants to live in a place water rains down on them in their living room or where they have to dodge raccoons. Again, there are degrees of maintenance. They won't be incentivized to put in a new deck or repaint the whole house, but a lot of the value destruction associated with foreclosure has to do with simpler things: animals taking residence, water damage, thieves stealing the wiring/plumbing and ruining the walls in the process, etc.
- MichaelSalib 16y ago
  I forgot that many people on HN can't distinguish between normative and positive claims, so let me clarify: I don't think this behavior is terribly ethical, but I do think it can produce more efficient economic outcomes. There are many of unethical acts that improve economic efficiency.
  - tptacek 16y ago
    I agree with you that the likely effect of them turning in the keys to their houses is that those houses will be vacant probably for the better part of a year, which will damage other good-faith occupants of neighboring houses and produce no economic good for either the lender or the buyer. I think the only thing I could really wish for here is a system that captures some of the funds that these people are spending on trucks or business schemes and, in exchange for some long-term plan to keep them in their houses, get them to start paying back into their commitments. It is certainly true that the financial system shoulders some of the blame for this untenable situation. A pox on all their houses, then.
    - MichaelSalib 16y ago
      a system that captures some of the funds that these people are spending on trucks or business schemes and, in exchange for some long-term plan to keep them in their houses, get them to start paying back into their commitments There have been several proposals that would accomplish this, including Dean Baker's Own to Rent ( http://tpmcafe.talkingpointsmemo.com/2007/08/19/own_to_rent_the_way_to_save_su/ http://tpmcafe.talkingpointsmemo.com/2007/08/19/own_to_rent_... ); I believe all of these proposals have been vociferously opposed by the finance industry. One reason is that it would probably force banks to mark down the values of their assets to something more realistic. I believe these proposals would be very popular though with the general public....

tptacek 16y ago

What these people are doing is exactly equivalent to what tendentious tenants do to avoid eviction. We almost uniformly hold those tenants in contempt; they're perpetrating a fraud. The only difference here is that it's banks holding the loans, not independent landlords. I see how you could sympathize with a ruthless defaulting homeowner; after all, what else are they going to do? Are we really asking them to vacate early solely to make the bank's job easier? On the other hand: what they're doing is morally indefensible, and any costs to the bank their behavior incurs is largely going to be borne by good-faith mortgageholders and new prospective good-faith home buyers. Maybe they shouldn't be bragging about this. Here's to hoping it catches up with them sooner than later.

stellar678 16y ago
I find it interesting that debt is always couched in moral terms for individuals, but business terms for corporations. Somehow it's immoral for individuals to work a system for their advantage, but it's standard operating procedure for a business.
- tptacek 16y ago
  That's a straw man argument, isn't it? The fact that some pundit somewhere drew a line between Morgan Stanley's contracts and Joe Smith's contracts doesn't mean we have to be held to a different standard on Hacker News. Or, more directly: it's immmoral for businesses to violate contracts too. What's the rest of your argument?
  - MichaelSalib 16y ago
    The fact that some pundit somewhere drew a line between... As Felix Salmon points out ( http://blogs.reuters.com/felix-salmon/2009/11/30/the-worlds-largest-guilt-trip/ http://blogs.reuters.com/felix-salmon/2009/11/30/the-worlds-... ), we're not talking about some random pundit. We're talking about the President of the United States, the Secretary of the Treasury, and a long list of authoritative figures in civil life. Or, more directly: it's immmoral for businesses to violate contracts too. What's the rest of your argument? Given finite resources for law enforcement, we should prioritize investigation and prosecutions so that a small number of random losers who made a bad moral choice that probably harmed no one get investigated/prosecuted after the rich and powerful people who decided to abandon their own underwriting standards and helped destroy the economy.

icefox 16y ago

“We could pay the mortgage company way more than the house is worth and starve to death,” This implies that if the house was worth what they were paying that they would still starve to death and really they made a bad choice in buying the house in the first place. "But the couple also refinanced at the height of the market, taking out cash to buy a truck..." sigh...

sethg 16y ago
For every unwise borrower there is an unwise lender. My sympathies are more with the borrower, since the lender, as the side that supposedly hired people with financial acumen, bears a majority of the responsibility for assessing risk.
- gsmaverick 16y ago
  In this case the problem lies with the political pressure applied by both Bush and Clinton on Fannie Mae and Freddie Mac to continue giving out more mortgages.
  - MichaelSalib 16y ago
    A bigger problem is the homeowners mortgage interest deduction. In terms of its stated policy rational, it is a complete joke, but modification let alone elimination remains political suicide.
- tptacek 16y ago
  This simplification presumes that there are only two parties with stakes in a residential mortgage. That's not at all true. There are tens of millions of residential mortgages taken out in good faith and held in good standing, and they will absolutely pay in one way or another for the abuse of the system by either lenders or homeowners.

edw519 16y ago

“They’re all crooks." Let me see if I got this right... You borrowed money. Now you choose not to make the monthly payment that you have already agreed to pay. And spend that money on other stuff. And you call them the crooks?

MichaelSalib 16y ago
Maybe both parties are crooks? This is not a zero sum game...they can both be crooks at the same time.
- kqr2 16y ago
  And unfortunately, the real "victims" in this episode are people who act responsibly by paying their mortgages and taxes while receiving very little interest on their savings.
rjett 16y ago
Even if banks and courts did have the manpower to evict these people faster, the deeper problem, as you pointed out, is this backwards logic and gross rationalizing. To try to address this, I think a campaign of linking fiscal responsibility to patriotism might be helpful. I suspect that many of these people would identify with being patriotic. Each mortgage payment these people make or at least each step these people take to work with the bank is a step in the right direction for our country. The actions of these people will inevitably hurt the rest of us in the long run.
- MichaelSalib 16y ago
  I think a campaign of linking fiscal responsibility to patriotism might be helpful. Can you think of any cases where a campaign of linking something to patriotism has actually worked? I cannot. My sense is that many people would respond to such a campaign with rage: they'd point out that financial institutions and their shareholders made out like bandits with the various emergency programs and that no one ever said anything about BoA or GS being "unpatriotic". The double standard would appall many people I think. The actions of these people will inevitably hurt the rest of us in the long run. Are you certain that's true? Maybe the only way to convince banks that they should not completely abandon their own underwriting standards would be for them to suffer some more agony by having a few borrowers dick them around. Certainly, if they just moved out today, the homes they lived in as well as their neighbors would lose value, which would in turn hurt "the rest of us in the long run".

patrickgzill 16y ago

The banks don't want to foreclose, because they do better with "extend and pretend" ... until the day before the foreclosure they can still carry the worthless loan as an asset at 100% of its original value (if I understand this part of the process correctly). Who is the greater criminal? Some old lady living in a crappy $125K house in Florida--or bank execs who in concert with corrupt regulators are hiding billions in bad loans and meanwhile paying themselves 100K bonuses or more?

tptacek 16y ago
If you remove the word "criminal", which doesn't apply, and replace it with "bad actor", I'm going to go with: "they are both bad actors". Squatting in a $125k house you promised to pay for but now refuse to pay for is still bad. This is the same lazy argument that runs though any discussion of any abuse of any service anywhere. "Sure, I stole 10,000 credit card numbers --- but the credit card companies are evil organizations that prey on low-income people, and they're the ones that are going to end up paying!"

tjmaxal 16y ago

Imagine I decided to move into a foreclosed home and live there rent free until the banks could legally force me out? What is that called? It's stealing. Every month these people live in these houses they are stealing from the banks. Yes, the banks are at fault for creating the opportunity to get robbed but that doesn't justify the actions of these squatters. Would you say that a rapist is justified in raping someone because they acted in a sexually lewd manner? The "they had it coming" argument just doesn't hold water.

istari 16y ago

The Chinese sees the housing crisis from a different point of view: The US cheated China out of billions by selling them bonds backed up by inflated real estate, money saved up by hardworking Chinese. It's a completely different take on the situation. Someone had to provide the money in the first place. That someone sure as hell wasn't the banks, the banks were intermediaries. Often times that someone was a Chinese or German institution chasing higher interest rates with no clear understanding of what was being sold to them. Who benefited from the transaction? Whoever sold the home. A lot of foreign money came into the US and stayed in the US.