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“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 pa

by 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".
  - ticktock 16y ago
    In both World Wars the US had nationwide "rationing" and volunteer recycling programs. This was all done in the name of patriotism. ~ Those unoccupied homes would simply burn down sooner rather than later and the neighborhood would be better off. Remove the blight and re-use the land for something else.
  - yummyfajitas 16y ago
    Why does increasing the supply of available homes (and thereby lowering prices) hurt the rest of us?
    - MichaelSalib 16y ago
      If the former owners in question leave the houses they're occupying, then they'll go live somewhere else. Which wouldn't change the supply of available homes. It might lower prices, but I'm not sure why you would consider that a problem in and of itself: at the margin, that helps renters and hurts owners. Our society goes to great lengths to transfer cash from renters to owners, so a tiny change in the opposite direction doesn't strike me as a huge problem. Given current rent to own ratios, such reductions are needed to bring the system into balance anyway. And leaving the current home they're in vacant will reduce its value. Specifically, vacant foreclosed properties suffer all sorts of problems that reduce their value: animals infest the properties, thieves steal the wiring and plumbing (which destroys the walls), leaks spring and since no one notices, water damage accumulates quickly, etc. Plus, neighboring homes will lose value as well: no one wants to live next to a vacant structure that has sustained major water damage or is being used as a base of operations by criminals or vagrants. Keeping people in those homes prevents most of these value-destroying problems from happening. When good assets are trashed, our whole society is made poorer.
      - yummyfajitas 16y ago
        If the former owner downsizes, moving from a large home to a small one, the supply of housing goes up. And I don't consider lowering prices to be a problem. Leaving immediately would encourage the bank to sell the house as quickly as possible to a new owner. The new owners would be more likely engage in maintenance of the home (why fix the roof of a house you are going to be kicked out of) and the new owners will be people of better moral standing. Further, leaving immediately would force the bank to mark their assets to market, thereby making it more difficult for them to fool regulators and the public about the state of their balance sheet. It's possible that the downsides to leaving outweigh the upsides, but it's by no means certain. There are both upsides and downsides, and it's very far from obvious which way the balance goes.

by edw519 16y ago

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".
- ticktock 16y ago
  In both World Wars the US had nationwide "rationing" and volunteer recycling programs. This was all done in the name of patriotism. ~ Those unoccupied homes would simply burn down sooner rather than later and the neighborhood would be better off. Remove the blight and re-use the land for something else.
- yummyfajitas 16y ago
  Why does increasing the supply of available homes (and thereby lowering prices) hurt the rest of us?
  - MichaelSalib 16y ago
    If the former owners in question leave the houses they're occupying, then they'll go live somewhere else. Which wouldn't change the supply of available homes. It might lower prices, but I'm not sure why you would consider that a problem in and of itself: at the margin, that helps renters and hurts owners. Our society goes to great lengths to transfer cash from renters to owners, so a tiny change in the opposite direction doesn't strike me as a huge problem. Given current rent to own ratios, such reductions are needed to bring the system into balance anyway. And leaving the current home they're in vacant will reduce its value. Specifically, vacant foreclosed properties suffer all sorts of problems that reduce their value: animals infest the properties, thieves steal the wiring and plumbing (which destroys the walls), leaks spring and since no one notices, water damage accumulates quickly, etc. Plus, neighboring homes will lose value as well: no one wants to live next to a vacant structure that has sustained major water damage or is being used as a base of operations by criminals or vagrants. Keeping people in those homes prevents most of these value-destroying problems from happening. When good assets are trashed, our whole society is made poorer.
    - yummyfajitas 16y ago
      If the former owner downsizes, moving from a large home to a small one, the supply of housing goes up. And I don't consider lowering prices to be a problem. Leaving immediately would encourage the bank to sell the house as quickly as possible to a new owner. The new owners would be more likely engage in maintenance of the home (why fix the roof of a house you are going to be kicked out of) and the new owners will be people of better moral standing. Further, leaving immediately would force the bank to mark their assets to market, thereby making it more difficult for them to fool regulators and the public about the state of their balance sheet. It's possible that the downsides to leaving outweigh the upsides, but it's by no means certain. There are both upsides and downsides, and it's very far from obvious which way the balance goes.