Leverage

Everyone has it.

The article below is about owners who have stopped paying their mortgages and are not worried about it. In other words they are engaging in another variety of strategic default.

Owners Stop Paying Mortgages, and Stop Fretting

Comments

Let me list the reasons why this is possible.

1. Banks are in the lending business not the real estate business. They are not landlords. The last thing a bank wants to do is take over a property because it costs too much to manage it and get rid of it.

2. The foreclosure process is not an immediate. Even before the meltdown, there were always a ton of hoops a lender had to go through to foreclose on a house.

3. Banks are overwhelmed by the copious amount of homeowners in default. They obviously did not have the proper system set up to deal with it.

4. The new regulations in foreclosure is making the process more difficult for lenders.

5. People are pissed as f**k.


There is a massive state of rage amongst the have nots about being screwed over. And a lot of them have been.

Blacks in Memphis Lose Decades of Economic Gains

Two years ago, his doorbell rang, and two men from Wells Fargo offered to consolidate his consumer loans into a low-cost mortgage.

“I thought, ‘This is great! ’ ” Mr. Banks says. “When you have four kids, college expenses, you look for any savings.”

What those men did not tell Mr. Banks, he says (and Ms. Thomas, who studied his case, confirms), is that his new mortgage had an adjustable rate. When it reset last year, his payment jumped to $1,700 from $1,200.

This is just one of millions of stories of people being taken of advantage of. And there are millions of stories of people making really bad life decisions.

Nobody gives a damn now. Who can blame them?