Repercussions of Foreclosure

[Flasch186]

understood.

youre approaching 15K posts. wow

[Subby]

Not paying one's debts seems dishonorable to me. That was my initial reaction when reading your first post (haven't read the rest of the thread yet so maybe I am missing something.)

Just my opinion completely independent of who is involved in the situation. *shurg*

[Flasch186]

BTW I spoke to my mom and where theyre priced now they would be selling it and losing all of their down payment and it would be even up for the bank. so theyre doing the best they can and giving up their investment in it (20% DP) but the umbrella is that theyre bleeding monthly and cannot do it forever. so it isnt like they were flipping houses with 0 down....theyre just stuck and trying to save themselves from crahsing and burning and "no" the banks wont work with them at all because they havnt missed payments thus far. That is the hidden gem of the banks "working with people" right now is that they dont work with you until youre close les pendins.

[digamma]

If they aren't upside down, then it seems like an easy decision.

Another easy decision would be to spend a few hundred (or thousand) on a sound financial planner, rather than a day arguing over several dozen message board posts.

[Vinatieri for Prez]

Originally Posted by Fidatelo

Am I the only one who finds it wrong to consider foreclosure in these circumstances? What happened to personal responsibility?

I think it's ok. As part of the deal they signed up for, they are legally entitled to stop paying and get foreclosed on. The contract says what will happen if they don't pay. As long as they are willing to live with the consequences, I have no problem with them choosing this option, especially when the party on the other end is a bank.

[Flasch186]

Originally Posted by digamma

If they aren't upside down, then it seems like an easy decision.

Another easy decision would be to spend a few hundred (or thousand) on a sound financial planner, rather than a day arguing over several dozen message board posts.

Just because your not upside down (due to your 20% DP) doesnt mean a home will sell. Welcome to Florida Real Estate.

[Flasch186]

Originally Posted by Vinatieri for Prez

I think it's ok. As part of the deal they signed up for, they are legally entitled to stop paying and get foreclosed on. The contract says what will happen if they don't pay. As long as they are willing to live with the consequences, I have no problem with them choosing this option, especially when the party on the other end is a bank.

that's how I feel too. It'd be different if they we're borrowing from you though to support their crack habit.

[digamma]

Originally Posted by Flasch186

Just because your not upside down (due to your 20% DP) doesnt mean a home will sell. Welcome to Florida Real Estate.

A home will always sell. It is just the price you are haggling over. I'm plenty familiar with the current state of the markets and their illiquidity (both on the micro and macro level).

I should have said that it would be an easy decision for me. But I don't know your parents situation and whether they could withstand a loss on a pure financial basis. I don't know how much they value their credit rating and the work they would have to do to improve it. I also don't know how much value they place on other things like the stigma of going through a foreclosure, any moral obligation in honoring their debt or macro concerns they may have about contributing in some small way to the real estate and credit crunch.

In other words, take it with a grain of salt...

[Flasch186]

Originally Posted by digamma

A home will always sell. It is just the price you are haggling over. I'm plenty familiar with the current state of the markets and their illiquidity (both on the micro and macro level).

I should have said that it would be an easy decision for me. But I don't know your parents situation and whether they could withstand a loss on a pure financial basis. I don't know how much they value their credit rating and the work they would have to do to improve it. I also don't know how much value they place on other things like the stigma of going through a foreclosure, any moral obligation in honoring their debt or macro concerns they may have about contributing in some small way to the real estate and credit crunch.

In other words, take it with a grain of salt...

however, in the resale market most banks, aside from what they advertise are not working out short sales with many of their borrowers, therefore after the sale you are left with a fat amount owed to the bank that they want paid off immediately. Like many people they cant afford to do that so they are "stuck". This is why the new construction market in some areas is fairing better than the resale market.

I'd say in general, all of us Americans and in some ways foreigners need to be more concerned about liquidity right now than our Fico scores. That will likely reverse in a few years but right now, cash is king. (well gold is really)

[Fidatelo]

Originally Posted by Flasch186

I'd say in general, all of us Americans and in some ways foreigners need to be more concerned about liquidity right now than our Fico scores. That will likely reverse in a few years but right now, cash is king. (well gold is really)

I'd say that if more people lived with less debt to begin with the U.S. wouldn't be in this mess in the first place.

[Flasch186]

here here

[digamma]

Originally Posted by Flasch186

however, in the resale market most banks, aside from what they advertise are not working out short sales with many of their borrowers, therefore after the sale you are left with a fat amount owed to the bank that they want paid off immediately. Like many people they cant afford to do that so they are "stuck". This is why the new construction market in some areas is fairing better than the resale market.

I was going off of your statement above where you said this would not be the case. I can only deal with the facts and statements given.

I'd say in general, all of us Americans and in some ways foreigners need to be more concerned about liquidity right now than our Fico scores. That will likely reverse in a few years but right now, cash is king. (well gold is really)

You pretty much completely missed my point here, which is fine.

It seems like you had your mind made up here from the beginning and there was no repercussion that could be presented to you (other than maybe being sent off to debtor's prison in the Outback) that would have changed your mind. That's fine too.

[Flasch186]

They spoke with an attorney today to look into this avenue.

Di - Had someone said that getting foreclosed on had some sort of judgments or something that could be had after, or a crushing credit score for 10 years then I wouldve obviously been swayed. If it wouldve been directly insured by taxpayers or the debit could be held against them until paid for 25 years, that wouldve also brought to different reactions. I was referring more to Fid in talking about cash vs. debt.

[Vinatieri for Prez]

Originally Posted by Flasch186

They spoke with an attorney today to look into this avenue.

Di - Had someone said that getting foreclosed on had some sort of judgments or something that could be had after, or a crushing credit score for 10 years then I wouldve obviously been swayed. If it wouldve been directly insured by taxpayers or the debit could be held against them until paid for 25 years, that wouldve also brought to different reactions. I was referring more to Fid in talking about cash vs. debt.

Not sure what the laws are like there in Florida, but banks usually can seek a deficiency judgment against the debtor if they go the judicial foreclosure route.

[Flasch186]

something that is on their radar when talking to the attorney. They are going to try slashing their price first figuring the value of credit score vs. cost. At some point though the scale turns over.

[CU Tiger]

To me credit score does not enter into the equation.
I've said it here numerous times, but when I was in an industry that lived and died on credit scores as a pre-req. of our customers, our credit manager had a huge sign on his office wall that said
"A credit score is a measure of integrity, or THE WILLINGNESS OF AN INDIVIDUAL TO NOT PAY THEIR DEBTS. It is not a measure of their ability to pay one."

If you look at it from that perspective you may see my thoughts.

Regardless of the financial implications, morally it is the wrong decision to foreclose, regardless of the implications. If you have any means necessary to settle a debt, you owe it (at least I do) to do so, even if it means wasting your life savings and causing untold financial hardship. The fact that the terms are pre-arranged as to what happens IF you foreclose does not grant you permission to foreclose, simply because it is the more attractive financial option.


I can only judge from a position of what I would do, and I can go back to what I did when our first business folded. My first electrical company
I was young and dumb and eventually seated all my eggs in one customer's basket. I soon found myself in a situation where I had $450,000 outstanding in receivables, and $210,000 outstanding in payables. When my AR numbers reached 160 days, every suply house in town cut me off, I couldnt make payroll, I was forced to declare bankruptcy to avoid legal troubles. I sold my house, mine and my wife's cars, we lost EVERYTHING. 5 months later I found myself paid and holding quite a ssum of cash. Legally my attorney told me I could pocket it and ride away. I did not. I settled every debt, every supplier and every former employee. Even the 20k that I was told was written off, I went to the company's headquarters to have the write off reversed. Three years later I need character witnesses and a state board appeal to be re licensed as a contractor, due to my previous bankruptcy. I had 31 people show up to give sworn statements on my actions.


Call it karma, fate, call it morality but if I make a pledge to pay you a sum I hold it as a duty to fulfill that regardless. I agree your parents are 100% within their legal right to allow it to be forceclosed upon, I disagree that they should.

[Fidatelo]

CU Tiger is good in my books. That is a great story to tell your kids as they grow up.

[Flasch186]

Originally Posted by Fidatelo

CU Tiger is good in my books. That is a great story to tell your kids as they grow up.

for the record you had a problem with the banks writing off their debts...I have my parents checking into that option too

I agree CU Tiger made good and I would hope anyone would pay off their employees that they owed money to. That falls under the same borrowed money from of a friend scenario Jon and I talked about. Regardless, that doesnt minimize CU's decency. I also see the top part regarding the "willingness" argument is skewed a bit by the current state of the mortgage industry, the flaws that have been exposed, the fraud, the misdeeds in underwriting, and greed. They were probably being somewhat greedy but they had a dream of dying in this home in this retirement 55 and over community where they could play Bingo on Wednesday nights. They were'nt flippers per se.

In my dad's defense he owned a car stereo / window tinting place for about 15 years and he was the greatest boss in the world to those guys. Those installers were a struggling group for the most part but my dad was there for them all the time bailing some of them out, helping some through rehab, lending them more money than you can count and constantly giving stuff away (which my mom says is why they went out of business but I argue it had more to do with the big box Sound Advice coming to town and on a smaller scale Best Buy/Circuit City) he even forgave a guy who broke in and stole from him by rehiring him, but this isn't a contest of who has better morals.

For me, this is fiscal and it is between him and the bank and unfortunately he doesnt have the option mentioned at first, write it off. He'll instead give them the collateral and the appraisal they paid for suffering the credit hit much like CFC's share price dropped when they wrote off debt.

Morals, IMO has nothing to do with it. Stigma may be there, embarassment perhaps, but like vin, I dont believe it is immoral to follow what is laid out in the contract. Friend's wouldnt draw up a contract IMO.

[Fidatelo]

Why do morals and obligations disappear when a contract or business becomes involved?

Anyways, clearly I have a different 'moral code' than you and no amount of arguing will change anyone's mind on that sort of thing. I'm just glad that I never have to be involved in any kind of business transaction with you, as I'm sure I would come out in an unfavorable, yet likely very much 'contractually fulfilled', position.

[Flasch186]

Originally Posted by Fidatelo

Why do morals and obligations disappear when a contract or business becomes involved?

Anyways, clearly I have a different 'moral code' than you and no amount of arguing will change anyone's mind on that sort of thing. I'm just glad that I never have to be involved in any kind of business transaction with you, as I'm sure I would come out in an unfavorable, yet likely very much 'contractually fulfilled', position.

They dont BUT youre only applying the morals and obligations to one of the parties involved you have to apply them equally to both sides, IMO youre not.

If the bank reached out to them in ANY WAY or was responsive to my parents inquiries I would suggest that they continue to reach out to the bank for help. This has been unsuccessful but apparently theyre not alone.

In my line of work I use contracts ALL the time however I do things all the time that are outside of the contract but I also expect people on the other side to act in the same manner. Many times a buyer will not miss one day of work or a lunch to meet with the superintendent for an important meeting yet if I dont come in on my day off to meet with them, Im the asshole so I go every single time (like tonight) thusly my "surveys" are the highest in the company nationally. I think this "intent" outside of "contract" comes from years of waiting tables and always going the extra mile for people.

BTW I dont view this as arguing but having a fun debate that you dont really get in person with people since their attention spans are generally much shorter than that which we're able to talk about on here.

[digamma]

Originally Posted by Flasch186

For me, this is fiscal and it is between him and the bank and unfortunately he doesnt have the option mentioned at first, write it off. He'll instead give them the collateral and the appraisal they paid for suffering the credit hit much like CFC's share price dropped when they wrote off debt.

Morals, IMO has nothing to do with it. Stigma may be there, embarassment perhaps, but like vin, I dont believe it is immoral to follow what is laid out in the contract. Friend's wouldnt draw up a contract IMO.

I can't remember...was one of your tips to increase your neighborhood's home values paying mortgages so there are not a bunch of foreclosure sales that add to the neighborhood's falling home prices?

That may be a bit snarky, but the point is, while you see this as a simple two party situation, there's actually a nice little ripple effect on a micro and macro level.

So, your parents stop paying their mortgage. They go on the bank's remittance report. The remittance report goes up a tick and the market reacts negatively sending stocks down. Also, it turns out that your bank packaged your parent's mortgage into an asset backed security. People running loss prediction models on that security add another to the loss column. That security is held by some structured investment vehicles, which rightly or wrongly, were rated AAA by the ratings agencies, and is held in a number of money market funds. The money market fund essentially guarantees a dollar NAV, but is hit with losses in these AAA securities, because the underlying ABS isn't paying, and now we're back to the bank sponsoring the money fund. They can top up the fund to make sure Joe American who invested some of his short term savings in it doesn't take a loss, but in doing so, they take a write down and their stock goes down hurting their own shareholders. And, oh yeah, the home values in your parent's neighborhood take a hit.

BTW, as a technical matter, by not paying, you are breaching the contract, not "following what is laid out" in the contract. The bank is then exercising the contractual remedies set forth in it.

[Vinatieri for Prez]

Originally Posted by CU Tiger

Regardless of the financial implications, morally it is the wrong decision to foreclose, regardless of the implications. If you have any means necessary to settle a debt, you owe it (at least I do) to do so, even if it means wasting your life savings and causing untold financial hardship. The fact that the terms are pre-arranged as to what happens IF you foreclose does not grant you permission to foreclose, simply because it is the more attractive financial option.

Couldn't disagree more with this statement in the context of a business relationship with a bank in which foreclosure is an explicitly legal option in the contract.

I could get into a discussion about how there are times when society and the marketplace are actually benefited by people who break contracts (perfect example is where the cost to compensate the wronged party is dwarfed by the ability of the contract breaker to put his resources to highest and best use) and which is the philosophical underpinning for why courts do not award non-pecuniary damages such as pain and suffering in a contract breach situation, but I won't because it's clear we live under a different set of beliefs in this one particular regard.

[BYU 14]

Originally Posted by Vinatieri for Prez

Couldn't disagree more with this statement in the context of a business relationship with a bank in which foreclosure is an explicitly legal option in the contract.

I could get into a discussion about how there are times when society and the marketplace are actually benefited by people who break contracts (perfect example is where the cost to compensate the wronged party is dwarfed by the ability of the contract breaker to put his resources to highest and best use) and which is the philosophical underpinning for why courts do not award non-pecuniary damages such as pain and suffering in a contract breach situation, but I won't because it's clear we live under a different set of beliefs in this one particular regard.

First off, like CU in that I would do everything possible to avoid a foreclosure if that was ever a possibility, just out of principal. But at the same time Vinatieri makes solid points, plus in regards to the "moral" card I don't feel bad for a lot the banks who knowingly cavorted with shady Mortgage brokers during the housing boom, for some of them karma is a bitch. I also know there are a lot of solid Mortgage brokers out there as well as solid lenders that do not deserve to be grouped with the others. Unfortunately, it was some of the shadier types along with overzealous investors that started, then encouraged the stampede here in Phoenix.

[Flasch186]

Originally Posted by digamma

I can't remember...was one of your tips to increase your neighborhood's home values paying mortgages so there are not a bunch of foreclosure sales that add to the neighborhood's falling home prices?

no it wasnt. If someone cant afford to pay their mortgage or see themselves digging themselves a hole they cant get out of I would be recommending that they look into ALL options to save themselves and their family including giving the bank back the collateral. However mowing your lawn was. It's important for them to take their financial future into their own hands now and not wait until bankruptcy to figure out something went wrong.

...and like pointed out earlier the bank uses every aspect of said contract if it's in their advantage so Im not sure why the double standard.

[digamma]

Only making two simple points.

1. There may be other factors to consider besides the simple bottom line on numbers. I even pointed out a while back that these may be of little value in your decision. Some have moral implications, some don't. For CUTiger, the moral implications mattered. For others less so. No double standard--the point about your memo was simply a way to point out that there may be other effects to not paying your mortgage, just like there are other effects to not cutting your lawn besides having an ugly lawn.

2. Yes, breaching a contract us usually a way to get out of the contract. As VfP points out, there may be times when a breach is advisable--I've certainly talked with clients in detail about what the consequences of the breach of a particular agreement are to let them make a business decision. Certainly, before you enter into a contract, you want to consider termination provisions or the ramifications of a breach. However, I think the point others are making is that even though you are not challenging the other parties use of contractual remedies (and in some sense then, following the contract), there is some value in honoring your contract or using specified termination provisions rather than breaching and walking away. Again your mileage may vary on what that value is.

[Flasch186]

Originally Posted by digamma

Only making two simple points.

1. There may be other factors to consider besides the simple bottom line on numbers. I even pointed out a while back that these may be of little value in your decision. Some have moral implications, some don't. For CUTiger, the moral implications mattered. For others less so. No double standard--the point about your memo was simply a way to point out that there may be other effects to not paying your mortgage, just like there are other effects to not cutting your lawn besides having an ugly lawn.

2. Yes, breaching a contract us usually a way to get out of the contract. As VfP points out, there may be times when a breach is advisable--I've certainly talked with clients in detail about what the consequences of the breach of a particular agreement are to let them make a business decision. Certainly, before you enter into a contract, you want to consider termination provisions or the ramifications of a breach. However, I think the point others are making is that even though you are not challenging the other parties use of contractual remedies (and in some sense then, following the contract), there is some value in honoring your contract or using specified termination provisions rather than breaching and walking away. Again your mileage may vary on what that value is.

the bank will not discuss these.

Good points, I fall in the business agreement camp in this situation, others fall into the morality camp in this situation. Im not sure either one is right or wrong, it is what it is.

[Toddiec]

I figured I would chime in here as a spawn of Hades banker.

Just on the business side, if they walk away then more often than not the bank will sue and go after their assets for the outstanding balance after the banks sells the property. I can guarantee you that whatever possible amount your parents can sell the house for will be more than the bank can. When a buyer sees a bank as the seller, you can bet they will knock 10% at least off their offer because they know banks needs to sell it as soon as possible. Bad selling position to be in for the banks so the buyer will take advantage.

Now, the bank will take a look at the financials provided at the time of application along with pulling a credit bureau, etc. to try to discern what kind of shape the borrower is in. I have no idea what your parents are like financially, but if they have some savings, IRA's, a primary dwelling (which they do apparently) that is not the collateral on this note, then the bank will most likely see assets they can grab.

Then it comes down to how much is left over after the sale proceeds are applied to the outstanding balance. They look at the borrowers situation, potential legal costs, outstanding balance, and then decide how to proceed. More often than not, especially if they see liquid or semi-liquid assets (IRA's, savings, etc.) then they will do it. One bad factor that I see from above posts is that the bank is not talking (and I mean they may be talking, just not bargaining with them, so to speak) to the borrower, that usually leads me to believe (my opinion only) that they think if the property is walked away from the bank is in good position to come out acceptably to them. Now, as to if this is because they think the property will sell for enough, if they see assets they could sue for, or if they think the borrower is bluffing, there is no way to tell.

Now, the credit hit will be bad, make no illusions, but they will still be able to borrow money. Anyone can get a loan no matter what their credit score if they can find the right place, but be prepared to have to hunt for it and then be prepared to pay for it in fees, higher than average interest rate, or both to offset the risk. Now, just speaking from my bank's standpoint we wouldn't touch the borrower for any loans due to the precedent they had set (defaulting on the loan for whatever reason), but we are not the only banker out there. I would also be worried about the bank going after them for the difference. Just to hit the main point I want to make again, I guarantee that the bank won't get the same selling price that the owners could get on the owners worst day.

Just some thoughts on the business side. I am staying out of the moral discussion.

[Flasch186]

Burn hades banker offspring!!! A WITCH!

BTW, everyone who goes in threads and says "you should post that on a different forum, blah blah blah." I would point to the post above and say that this FOFC is the pinnacle of potpouri when it comes to knowledge and there is no better place to post a question looking for opinion, education, and insight.

[Flasch186]

210pm - NJ Gov. Corzine on CNBC pretty much said exactly what Ive been saying, that unless there is some ability for individuals who need to alleviate some of this pressure on them to be able to write off some of this debt or renegotiate with the lenders in a meaningful way that he expects people to walk away from their homes. He said that "not enough has been done" thus far and that the Laissez Faire attitude in the credit markets is what caused this and his expectation is that buyer's will walk away. He actually talked about the banks ability to write off debt while the "consumer" hasnt been able to.

FWIW:

http://biz.yahoo.com/ap/080313/foreclosure_rates.html

AP
US Foreclosure Activity Rose in February
Thursday March 13, 7:41 am ET
By Alex Veiga, AP Business Writer
Number of US Homes Facing Foreclosure Jumps Nearly 60 Percent in February

LOS ANGELES (AP) -- Nearly 60 percent more U.S. homes faced foreclosure in February than in the same month last year, with Nevada, California and Florida showing the highest foreclosure rates, a research firm said.

ADVERTISEMENT
A total of 223,651 homes across the nation received at least one notice from lenders last month related to overdue payments, up 59.8 percent from 139,922 a year earlier, according to Irvine, Calif.-based RealtyTrac Inc.

Nearly half of the homes on the most recent list had slipped into default for the first time.

Nevada had the nation's highest foreclosure rate, with one in every 165 households receiving at least one foreclosure-related notice. It had 6,167 properties facing foreclosure, a 68 percent increase from a year earlier and up 1 percent from January, RealtyTrac said Wednesday.

Most of the troubled properties were located in California, Florida, Texas, Michigan and Ohio -- states where home prices have plunged as the housing boom went bust.

The overall U.S. foreclosure rate last month was one filing for every 557 homes.

February's total represents a 4 percent dip from January, but the decline was just a seasonal blip, said Rick Sharga, RealtyTrac's vice president of marketing.

"We seem to be settling in at a new plateau in terms of monthly activity, but it's a much higher plateau than we were at a year ago," he said.

February marked the 26th consecutive month with a national year-over-year increase in foreclosure-related filings.

Meanwhile, the number of foreclosed properties that didn't sell at auction and ended up going back to lenders soared more than 110 percent last month versus February 2007, RealtyTrac said.

Last month, some 46,508 properties were repossessed by lenders, up from 22,114 a year earlier.

In some areas such as Riverside County, east of Los Angeles, the trend was stark.

The county has seen home values plummet since the end of the speculator-driven demand that triggered a boom in home construction, sales and prices.

In February 2007, it had only 65 homes go unsold at auction and returned to a lender. Last month, the total was 1,346.

"You look at that kind of growth and it's just mind-numbing," Sharga said.

Los Angeles County saw a similar rate of growth. Some 215 homes went back to the banks in February 2007, compared with 1,670 last month, RealtyTrac said.

The company follows default notices, auction sale notices and bank repossessions. Lenders typically consider borrowers delinquent after they fall three months behind on mortgage payments.

In the 12-month period ended in February, 45 states saw an increase in the number of homes that had received at least one filing.

The latest data suggest many homeowners across the nation continue to struggle with mortgage payments, despite highly publicized efforts by government, financial institutions and consumer advocacy groups to modify loan terms or work out long-term repayment plans for troubled borrowers.

The number of homes facing foreclosure is still a small percentage of all U.S. homes. But the increases are further exacerbating a protracted housing downturn that some economists warn could tip the nation into a recession.

California had the second-highest foreclosure rate, with one in every 242 households receiving a foreclosure-related notice. The state had 53,629 properties on the foreclosure track, the most of any state. The total increased 131 percent from a year earlier but declined 6 percent from the previous month.

In Florida, 32,447 homes reporting at least one filing, up more than 69 percent from February last year and up more than 7 percent from January.

Rounding out the top 10 states with the highest foreclosure rates were Arizona, Colorado, Michigan, Ohio, Georgia, Indiana and Tennessee.

RealtyTrac Inc.: http://www.realtytrac.com

[CU Tiger]

Re-reading my post, I want to make sure I dont come off as too abrasive, nor unclear.

I am not a bank empathizer in ANY way. As an industry whole they have made their own grave and many will sleep in it. However that has no bearing on my feelings of obligation. To borrow from the friend analogy, if I borrowed money from my brother in law and then found out he was cheating on my sister I would consider him scum, but it would not relieve me of my duty to pay him back.


I think your view of credit also plays in to this discussion. Is credit a right to you? To me it is a curse, and not a priviledge. I choose to live my life debt free now becuase of my history. The reason that is releveent is simple, to me your parents have gained already. They have "owned" or at a minimum had access to a house they could not afford. This was afforded them by the trust extended to them by a bank. Its not as if they have no gain from this and have simply dutifully performed a required task. They CHOSE to borrow money and PROMISED to re pay it. If they now change their promise they lack integrity in my book. Actually it would be a friendship ending act if they were personal friends, that is howserious I view it.

I liken the decision to theft, however I recognize that I am on one extreme of the situation and you are on the other. I will never make you realize my perspective and I will never appreciate yours.

A payday loan office placed directly across from a military base is perfectly legal, and their charging agreed upon interest of 300% APR is within their contractual right, it does not make the act moral. Yet I see no difference between this and your parents walking away from their obligation. They may have the legal right, they do not have the moral authority.

Finall, in my above recant, you singled in on the issue of past employees, do not discount the former creditors. These were major corporations who I could have easily dismissed, hell if they had not upheld their interest on late payment terms I could have probably avoided the pain and turmoil all together, yet I still had an obligation.

[Fidatelo]

CU Tiger is extremely adept at expressing many of my feelings in a much better manner.

[Wolfy]

Originally Posted by Flasch186

Burn hades banker offspring!!! A WITCH!

BTW, everyone who goes in threads and says "you should post that on a different forum, blah blah blah." I would point to the post above and say that this FOFC is the pinnacle of potpouri when it comes to knowledge and there is no better place to post a question looking for opinion, education, and insight.

Which part of Jacktown?

Also, can I borrow $100 bucks? I promise to pay it back !

[Flasch186]

Originally Posted by CU Tiger

Re-reading my post, I want to make sure I dont come off as too abrasive, nor unclear.

I am not a bank empathizer in ANY way. As an industry whole they have made their own grave and many will sleep in it. However that has no bearing on my feelings of obligation. To borrow from the friend analogy, if I borrowed money from my brother in law and then found out he was cheating on my sister I would consider him scum, but it would not relieve me of my duty to pay him back.


I think your view of credit also plays in to this discussion. Is credit a right to you? To me it is a curse, and not a priviledge. I choose to live my life debt free now becuase of my history. The reason that is releveent is simple, to me your parents have gained already. They have "owned" or at a minimum had access to a house they could not afford. This was afforded them by the trust extended to them by a bank. Its not as if they have no gain from this and have simply dutifully performed a required task. They CHOSE to borrow money and PROMISED to re pay it. If they now change their promise they lack integrity in my book. Actually it would be a friendship ending act if they were personal friends, that is howserious I view it.

I liken the decision to theft, however I recognize that I am on one extreme of the situation and you are on the other. I will never make you realize my perspective and I will never appreciate yours.

A payday loan office placed directly across from a military base is perfectly legal, and their charging agreed upon interest of 300% APR is within their contractual right, it does not make the act moral. Yet I see no difference between this and your parents walking away from their obligation. They may have the legal right, they do not have the moral authority.

Finall, in my above recant, you singled in on the issue of past employees, do not discount the former creditors. These were major corporations who I could have easily dismissed, hell if they had not upheld their interest on late payment terms I could have probably avoided the pain and turmoil all together, yet I still had an obligation.

I have to go to bed but very quickly:

our view on credit differ greatly, their importance, their uses, their catalysts, their rewards, etc.

The bank did not give them the loan based on trust at all. It was simply a risk v. reward decision for them and one in which moral code or trust played absolutely not one part. 100% of it was a money making decision by the bank however one in which our great countries treasury secretary pointed out that they became greedy, lost sight of their own guidelines, and created their own mess.

Many of those Payday places we're found to be acting unethically (i chose this word instead of immorally on purpose) and have lost a few court cases and now legislation is passing to effect their business hence all of the PSA style commercials you see now. I find the apparent double standard between business and individual striking but perhaps Im misinterpreting the lines drawn by those who view this as a moral issue. However in the case above involving your sister and her husband I would wait to find out if he owes her any money (child support, etc.) and balance that against paying him back. I guess I would look at his pseudo-credit score when it comes to paying my sister the things he owes her before giving him his money back but that's not fair because I would probably get very irate and emotional and Im not sure my reactions would be vanilla or rational.

I didnt point out the suppliers because I dont believe I have enough information to discern how I feel about that specifically.