John Courson, president and C.E.O. of the Mortgage Bankers Association, recently told The Wall Street Journal that homeowners who default on their mortgages should think about the “message” they will send to “their family and their kids and their friends.” Courson was implying that homeowners — record numbers of whom continue to default — have a responsibility to make good. He wasn’t referring to the people who have no choice, who can’t afford their payments. He was speaking about the rising number of folks who are voluntarily choosing not to pay.
Human Empire
Such voluntary defaults are a new phenomenon. Time was, Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work. But the housing collapse left 10.7 million families owing more than their homes are worth. So some of them are making a calculated decision to hang onto their money and let their homes go. Is this irresponsible?
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Human Empire
Such voluntary defaults are a new phenomenon. Time was, Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work. But the housing collapse left 10.7 million families owing more than their homes are worth. So some of them are making a calculated decision to hang onto their money and let their homes go. Is this irresponsible?
Read more
6 comments:
This is a big joke. The US govt. and Wall Street have raped the US populace and are continuing to print money with gay abandon. But Joe Six Pack trying to protect himself?? Oh No!! That is ignominy and irresponsibility!!
how is this post related to Indian Housing bubble????
Venki please post some sensible articles related to Indian real estate
If you notice there are no new articles on Indian real estate for some time now. This includes the lack of soft marketing articles normally found in the times of india. The decoupling theory etc has been debunked and India is dependent on US funds for most of its development, including all bubbles. As of now the ability of the Indian buyer is out of line. I would think that 2010 will be slow year on Indian housing and also Indian housing related news.
The biggest news will be delayed projects and the real estate IPOs which will suck more investors into the market and drain them off their cash.
Good points Vik. Another thing you might want to mention is the impending interest rate raise that RBI will be forced to make. There is runaway inflation in India food prices and the easy liquidity is not helping. As monetary policy will be tightened, food prices will stabilize but homes that are already unaffordable will become out of reach.
The Builder mafia has a big political clout, but is it big enough to force RBI to keep the rates low?
Vik/Anon above:
Do not count on RBI to raise rates as the Finance Ministry would not let it happen easily unless there is massive inflation. They will keep blaming inflation to poor monsoon etc.
No one in ruling party wants hike in rates. It will be a killer to their perceived growth in short term. All they care about is short term growth for re-election.
So, this thing can go on and on for years. There is massive collusion between builders, bankers and politicians. It is not only in India like that but all world countries. US Govt. is being run by Wall Street.
Don't be too optimistic that monetary policy would be fixed. Even the fiscal policy needs work as the deficit will keep increasing. The whole idea of the rich is to crush the middle class and poor class so that they can maintain their stolen riches.
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