Walk Away From Your Mortgage! - By Roger Lowenstein
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.
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?
- States Steal Federal Foreclosure Funds At Their Own Peril
Found via the Corner of Berkshire & Fairfax. The U.S. housing market is showing tentative signs of life as demand for new homes and housing prices begin to rise in some areas. Yet pitfalls remain, including about 12 million borrowers who still...
- Reforming A Broken Mortgage System - By George Soros
Found via Simoleon Sense. With the private sector largely incapacitated, the GSEs and FHA became virtually the only source of mortgage financing. This is a paradoxical situation in which a fundamentally unsound business model holds a quasimonopolistic...
- Hussman Weekly Market Comment: The Second Wave Begins
I should also note some features of the resets we are now beginning to observe. It is tempting to think that with Treasury yields fairly low, mortgage resets might be fairly benign in terms of their impact. The problem is that these Option ARM and Alt-A...
- Wsj: First, Let's Stabilize Home Prices - By R. Glenn Hubbard And Chris Mayer
We are in a vicious cycle: falling housing values cause losses on securities, which reduce bank capital, thereby tightening lending and causing house prices to fall further. The cycle has spread beyond housing, but housing is the place to fix it. Housing...
- The Psychology Of The Housing Mess - By Richard H. Thaler And Cass R. Sunstein
With the housing collapse, human decisions — whether on Wall Street or on Main Street — played a critical role. So it's instructive and, indeed, essential that we understand the human decision-making of today's crisis so that we don't...