Underwater mortgage?

I thought things on your credit report go away after 7 years.

 

I agree wiht your first point, only I don't think many people who are underwater and paying huge mortgage payments are overly concerned with credit . . . if they are, they should think of other alternatives.

I disagree with your second point. Banks don't treat these mortgages with any kind of moral basis. This is business, pure and simple and morals should not play into it. If it makes financial sense to breech a contract, then you do it. Contracts are part of business and should be handled that way . . . keep the emotions out it.

 

Show me in the contract where moral considerations are addressed in the contract. If a bank wants the loanee to use moral considerations when deciding to pay, put it in the contract (they have everything else in there) Better yet, show me a bank who factors in moral considerations when making decisions about foreclosing.

Doh . . . I'm talking to a banker, aren't I. Sorry but the public perception is banks do not operate by moral obligations. And banks, as much as any business, will breech a contract if it makes financial sense to do it.

 

I'll just say that if you borrow money and feel you have an out when it becomes inconvenient to repay it, then we have very little in common.

 

The moral consideration is in the good faith clause.

Would you consider it okay if inflation increased and a bank decided that a fixed rate needed to increase otherwise the loan would be called? Would you consider it okay if the property value went up and the bank decided to increase your loan balance to participate in the upside? Would you consider it okay if a bank saw that property values on a property massively increased and decided to foreclose on the loan? Just wondering.

 

If I borrow money from a bank charging me interest, and it makes financial sense to breech that contract, yes I'll do it . . . and we have always had very little in common, but don't even try to put yourself on some high moral platform.

Explain to me why individuals should have moral obligations about contracts with the banks yet banks don't factor in moral obligations when they decide to take action?

 

You don't see morality in violating a contract? Sorry, but in this case, I am more moral than you are if you belive it's okay to walk out on a contract. Not only is it immoral, but it's bad business. Do you think someone would ever do business with you if you walked out on a contract when times got tough? Once you sully your word in the world of finance, then you're toast.

Banks act in good faith. That's all you can expect from them on a moral basis. They lend the money and then service the loan. It's your responsibility and obligation to repay it. Their only security is the house. Frankly, I would like to see personal guarantees tied to mortgages so if you tried to walk away and the home wasn't enough to cover the loan, then they could come after you for the balance.

 

Because it says in the contract, fixed rate. If in the contract, the bank is allowed to increase the fixed rate or call the loan, then I have no doubt banks would do it if it was in their financial interest.

I can't believe I'm having a discussion about whether a bank will do what is best for them finacially. Banks, have to be at or near the top of the list of industries that analyze thing purely on a financial basis.

Banks utilize and in some cases abuse the contract system to their advantage. But with your high morals, I'm surprised you are calling for banks to automatically readjust the interests rates they nailed the consumers (albeit naive consumers). The only time a bank will readjust their interest rate is when they feel it makes financial sense to (some money is better than no money).

 

You can try to duck my questions, but they're no different than someone walking away when it becomes inconvenient. Personally, I despise these people because they're the ones who fucked up the banking system. If you're not a deadbeat, you should despise them too. These maggots are driving up rates and making it more difficult for honest people to obtain financing.

But you feel free siding with the cheats in this world. It speaks volumes about your character.

 

Bad business to breech a contract? What are you talking about? Some of the best business decisons made involve cutting bait and breeching a contract. Contracts are business, pure and simple.

I think you are taking these business contracts on a personal level. It not personal, it's business. I personally have breeched a contract with a business, went back to them with another proposal that would make them a lot of money and guess what . . we wrote up another contract and did business together. It's not personal, it's business.

If all you can expect from a bank is to lend money and service the loan . . . then all you should expect from the home owner is to either pay the loan or the consequenses as stated in the contract if they don't pay for the loan (that is why they put taht stuff in the loan contracts) Fuck the bank, there are no loyalties there . . . on either side.

 

Whatever deleted . .. I despise banks or bankers that claim morals come into play on bank contracts.

 

Ah, namecalling. The white flag of any forum discussion.

Clearly, you don't mind violating the "good faith" clause in any contract.

 

There's a difference between renegotiating and breaching a contract. You should learn that difference.

I won't comment on the kind of people with which you do business, but clearly we operate on different levels. Being honest is not just good for the soul it's good business. If I give my word I can deliver on a term in a contract, I honor it. If I can't, I offer to let them out of the deal. Anyone who retrades in my business finds themselves left out in the cold. In any kind of asset-backed financing deal, large sums of money are assigned with a handshake as it takes the lawyers a few days to prepare the paperwork. If you had lawyers every step of the way, nothing would get done.

If the bank operates in good faith, so should the borrower. It's in the contract.

 

I tend to agree with it's_GO_time. My mortgage was bundled in with a bunch of other loans by a bank that doesn't even exist anymore, and was sold as shares to a vast number of institutions and people who will never even know my name. If there's a moral obligation I should feel to somebody, I'm not sure how I'd even identify them.

It's kind of hard to equate that with a contract I might have with a landscaper to install a sprinkler system for me. I know Juan. His older kid spoke spanish with me. He's a nice guy, and he did a great job. I feel morally obligated to pay him what I promised.

I think that's really true for most people. maxiep wants to turn this into some sort of moral high ground issue, but if you asked most people why they aren't considering defaulting on their mortgages it's because:
1. Legal obligations (they don't want to have the police show up and kick them out)
2. Financial obligations (they don't want to destroy what's left of their credit rating, they don't want to lose equity)
3. Lethargy (the most trouble-free course for many is to just do what you've been doing)

I really doubt morality plays into it for hardly anyone. Except St. Maxiep.

 

its pretty simple. you default, you lose your home. that's how it should be.

 

St. maxiep? Ah, again with the namecalling. Do you teach your children it's okay to bail on their obligations when times get tough? Do you give them allowance when they don't do their chores? Do you let them stiff the lunch lady at school? It doesn't matter what the entity owed is, when you enter into an obligation, you should fulfill it. Do you plan to not fix a flaw in your cookbook software if a customer finds one? After all, they've already paid and it would be a real hassle to rewrite that code.

I'm not talking about when you have no other option, when workouts, refinancing and all other honest options have been exhausted. I'm talking about being upside down in a house and rather than trying to fulfill your obligation, you just walk away. The idea that you can act dishonorably is okay when you're dealing with an impersonal financial institution is just a way of lowering moral standards. It's sad that position is mocked.

 

I think it should be more. I think people have overextended themselves because there's not enough of a penalty for defaulting. Bankruptcy is an easy way out. I would love to see mortgages personally secured and any default permanently marked on your credit.

 

barfo, I don't mind him calling me an asshole. That's his opinion, one that is shared by most people on this board and sometimes even my wife's opinion.

 

BK is not an easy way out. 7 years is plenty of time, there should be some kind of way of redemption for people who make a mistake earlier in life.