Comments on: Do not EVER use the words “Strategic Default” in my presence http://www.puredoxyk.com/index.php/2010/02/04/maybe-homeowners-wouldnt-strategically-default-if-lenders-cooperated-the-consumerist/ Polyphasic Sleep and Better Thinking Sun, 05 Feb 2012 22:49:17 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: puredoxyk http://www.puredoxyk.com/index.php/2010/02/04/maybe-homeowners-wouldnt-strategically-default-if-lenders-cooperated-the-consumerist/comment-page-1/#comment-39771 puredoxyk Thu, 11 Feb 2010 15:34:29 +0000 http://www.puredoxyk.com/?p=2001#comment-39771 Michael, I'll be really interested to see how it actually shakes out in the long-run, when it stops being advantageous to banks to let loans sit and rack up the defaults; maybe when the reality of the fact that home sales AND rentals are down (this never happens, and economists are boggling but still somehow haven't figured out that the answer to "how" is in the massively-overcrowded homeless shelters) kicks some public-sector suits into action (not that suits ever turn on each other except in the most dire zero-sum circumstances)...yes, it'll be interesting. I'm probably exiting my own homeownership soon -- thankfully I have family who's taking over the home for me -- but looking ahead, zow am I glad to be out, even on a deal as conservative and solid as the home I bought three years ago, knowing full well how things were. I just think my life is much improved by not owing shit to these devils, and the worse they get, the less benefit I can see to owning anyway. Thanks! Michael,

I’ll be really interested to see how it actually shakes out in the long-run, when it stops being advantageous to banks to let loans sit and rack up the defaults; maybe when the reality of the fact that home sales AND rentals are down (this never happens, and economists are boggling but still somehow haven’t figured out that the answer to “how” is in the massively-overcrowded homeless shelters) kicks some public-sector suits into action (not that suits ever turn on each other except in the most dire zero-sum circumstances)…yes, it’ll be interesting. I’m probably exiting my own homeownership soon — thankfully I have family who’s taking over the home for me — but looking ahead, zow am I glad to be out, even on a deal as conservative and solid as the home I bought three years ago, knowing full well how things were. I just think my life is much improved by not owing shit to these devils, and the worse they get, the less benefit I can see to owning anyway.

Thanks!

]]> By: Michael Turner http://www.puredoxyk.com/index.php/2010/02/04/maybe-homeowners-wouldnt-strategically-default-if-lenders-cooperated-the-consumerist/comment-page-1/#comment-39756 Michael Turner Sun, 07 Feb 2010 12:09:10 +0000 http://www.puredoxyk.com/?p=2001#comment-39756 Then there are those who'd prefer foreclosure just so they could get on with their lives, but NO: <a href="http://rortybomb.wordpress.com/2010/02/05/email-from-a-reader-on-not-being-foreclosed-on/" rel="nofollow">http://rortybomb.wordpress.com/2010/02/05/email-from-a-reader-on-not-being-foreclosed-on/</a> That story, plus your final bullet point above, make me thing that many banks now have some kind of accounting-fiction incentive to make their non-performing assets look better than they are.  The bailouts gave them cash, so that source of blood loss has been (temporarily) stanched.  Now they need to look as if their mortgage portfolios aren't any worse for them than the worst (actually softballed) "stress tests" they were put through by Treasury.  That's my guess, anyway.  Let's not forget: that whole process you describe above is labor-intensive *for the banks.*  Once the full measure of the debacle is confirmed -- that the decline in home prices will continue, that foreclosures can only go higher, that prices won't go up again for a long, long time -- they'll streamline their process around that reality, and that means they'll be letting a lot of people go. Then there are those who'd prefer foreclosure just so they could get on with their lives, but NO:
http://rortybomb.wordpress.com/2010/02/05/email-from-a-reader-on-not-being-foreclosed-on/
That story, plus your final bullet point above, make me thing that many banks now have some kind of accounting-fiction incentive to make their non-performing assets look better than they are.  The bailouts gave them cash, so that source of blood loss has been (temporarily) stanched.  Now they need to look as if their mortgage portfolios aren't any worse for them than the worst (actually softballed) "stress tests" they were put through by Treasury.  That's my guess, anyway.  Let's not forget: that whole process you describe above is labor-intensive *for the banks.*  Once the full measure of the debacle is confirmed — that the decline in home prices will continue, that foreclosures can only go higher, that prices won't go up again for a long, long time — they'll streamline their process around that reality, and that means they'll be letting a lot of people go.

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