Stop Me Before I Vote Again

Well, haven't you hit upon the main vein of "middle class" insane?

We renters know we're broke, in terms of wealth. If we had wealth, we'd buy our way out. But we don't have wealth.

And, after all the dogma, neither do the "home owners."

http://blogs.wsj.com/economics/2009/06/26/when-is-it-cheaper-to-ditch-a-home-than-pay/tab/article/

"Foreclosures aren’t only due to homeowners facing a cash crunch. One out of four defaults on mortgage loans is “strategic,” a new study says, due to a mortgage’s value exceeding the value of a house even if the homeowner can afford to pay.

Strategic default is most likely when home values have fallen by more than 15%, according to the study by authors of the Financial Trust Index, a joint project of the University of Chicago’s Booth School of Business and Northwestern University’s Kellogg School of Management. ( Read the paper here by authors Northwestern’s Paola Sapienza, Chicago’s Luigi Zingales and Luigi Guiso of the European University Institute.)

The researchers found that homeowners start to default once their negative equity passes 10% of the home’s value. After that, they “walk away massively” after decreases of 15%. About 17% of households would default — even if they could pay the mortgage — when the equity shortfall hits 50% of the house’s value, they found.

“Housing policy under the current administration has focused on reducing households’ cash flow problems in response to the housing crisis, but no one has addressed the negative equity issue as part of public policy regarding housing,” Sapienza said.

The research is based on homeowner surveys, which also considered moral and social factors involved. People who said it was immoral to default were 77% less likely to declare their intention to do so, the authors write, while those who know someone who defaulted were 82% more likely to say they would default themselves.

“Our research showed there is a multiplication effect, where the social pressure not to default is weakened when homeowners live in areas of high frequency of foreclosures or know others who defaulted strategically,” Zingales said. “The predisposition to default increases with the number of foreclosures in the same ZIP code.”

Among the other findings:

People under 35 years and over 65 said were less likely to say it was morally wrong to default, compared to middle-aged respondents.
People with a higher education and African-Americans are less likely to think it’s morally wrong to default, while respondents with higher incomes were more likely to think it’s morally wrong.
Republicans and Democrats showed little difference in moral views of strategic default, while independents were less likely to say defaulting is immoral.
People who supported government intervention to help homeowners were 12 percentage points less likely to say strategic default is immoral, the authors found. "

http://www.financialtrustindex.org/

http://alaskakid.files.wordpress.com/2009/05/sapienza_08_new.jpg

researcher

m sapienza

consults available ???

“I think of trust as the subjective belief each one of us attributes to the possibility of being cheated,”
http://www.kellogg.northwestern.edu/News_Articles/2010/smith_breeden_prize.aspx

P Sapienza:
fraud dominatrix
corn flakes school of mangement

our girl seems to have found evidence
social capital
ie civic virtues et al
leading to ...."growth"
it ain't calvinistic thrift and industry
it's kantian
categorical imperative worship

http://www.financialtrustindex.org/images/Guiso_Sapienza_Zingales_StrategicDefault.pdf

THE paper

"Moral and Social Constraints to Strategic Default on Mortgages"

"The Personalized Plan

How we help you:

1. We provide a personalized cease and desist letter addressed to your lender to stop harassing phone calls.

2. We will provide you with the amount of days you have to live in your house payment free. We stay on top of your walk away plan and keep you up to date with weekly progress emails. We also will notify you if the lender is taking longer than expected subsequently giving you more time in your home payment free.

3. You get a personal consultation with a highly experienced real estate attorney in your state, making sure that you know your rights and that you are protected by the law.

4. You will have an experienced strategic default advocate available to answer any questions you may have during the entire process.

5. You will get a personal consultation with a CPA to go over any tax questions related to your strategic default.

6. You get access to our attorney network to answer questions via email about strategic default and foreclosure laws throughout the entire process.

7. You will be referred to a 3rd party BBB accredited law firm who has legally removed thousands of foreclosures.

The Customized Kit

You will also receive our complete Strategic Default Kit, which includes:

1. Copy of the letter we send to stop your lender from harassing you and your family.

2. A detailed and personalized time-line, showing all the steps that will transpire during the process so you don't have to worry about what will happen.

3. All the state laws pertaining to foreclosure assuring you that they will be barred by the law from coming after you for any money. (select states only)

4. How to make sure your lender follows the law. They have to follow a strict legal procedure. If they do not follow it perfectly, you may have a case against them.

5. A special tailored Credit Scenario report to help show you how to understand your credit score and offset the damage of a foreclosure.

6. Beneficial information regarding avoiding Bankruptcy.

7. Username and Password for our exclusive website where you will find other great tools to help you move beyond foreclosure and succeed financially "

.

i regret this entrepreneur

seems out ahead '
of

MPA
mortgage payers of america
a non prof
alinskyite outfit now self forming
in several pwog bellied brains
close to SMBIVA

"While moral attitudes toward default do not seem to be affected by the surrounding environment nor by the anger people exhibit vis-à-vis the current environment, the social pressure not to default is weakened when homeowners live in areas with high frequency of foreclosures or know other people who defaulted strategically. Our results suggest that these contagion effects should be seriously considered in public policy regarding housing"

the paper

"great tools to help you move beyond foreclosure and succeed financially "

note the frontal assault on morality here
by use of careful counter pose

when your future
" financial success "
MEANS
walk away NOW !!!!

The entrepreneurial outfit, gawd bless 'em, has a weather eye for profit. For $995.00, the skulking, shame-ridden deadbeat is once again a savvy investor. Hello blue skies. Farewell sunk costs.

The target demographic they're after is good for another completely legal fleecing. After extensive experience with that demographic, and its natural predators, I can't wish any of them well. But this does have its own aesthetic appeal—like news of the senator who likes to be diapered and bullied into soiling himself by his dominatrix. It just works.

Give me your money. Don't give it to the mortgage bank.

Personified Greed is always there, ready for the kill.

MPA(A) can afford to let the walkaway profiteers get ahead of the game. All they're offering is legal advice anyway.

What you really want is balance of power.

The Mortgage Payers Association of America signs initial membership through door-to-door operatives. Only the truly desperate sign on first, of course, but as critical mass approaches the thing develops its own momentum. Like factory unions: Current members start pressuring neighbors, fellow churchgoers, whatever, to join as well, because otherwise they face default on their own (with only a $1,000 wad of printouts from YouWalkAway(tm) in their corner). Every drop in prices makes the MPAA more powerful.

The organizers should start out in severely squeezed neighborhoods, in states with no-recourse laws. It's important to win the first several battles. Afterwards, though, they should have enough clout to expand. By then the companies would be on guard too -- but what could they do? Short of violence anyway.

The MPAA has to be intensely local, eventually staffed mostly by member-volunteers, with separate chapters for each mortgage company at the neighborhood level. No central bureaucracy, no central control -- though it will be necessary to pool some resources (volunteer legal advice comes to mind). As the organization expands to various regions, neighborhood chapters opposing the same company will want to link up and resist collectively. In that case, each chapter/neighborhood appoints single-purpose delegates to hammer out terms.

Members stay members even after their mortgages are renegotiated. If they begin to feel the hurt of falling prices once again, if they think the increasing power of MPAA makes it possible to win even better terms, if they decide they don't like the color scheme of the mortgage company's letterhead -- they draw more blood.

greed now now oxy

ain't that a terribly unfair word
for an instances like this
of good old yankee get up and go for it

bureaucrats have entrepreneur envy
not us professional red heads ...right ??

the catabolic side of the free market system
is clio's best proximate agent these days

Yes, using "greed" was very unfair of me I know. Enlightened self-interest, that's the phrase I was really looking for. Clearly, the $1,000 fee is right in line with the work done. It's like those glass replacement policies that insurance regulators used to want to treat as insurance. Not quite risk assumption on par with insurance, but not really all that different either.