Yet another NYT mortgage-victim story

ba294, for the ninetieth time, i'm not talking about her. i'm talking about people in general.

If there's a lesson in this for the next generation, I would say to give your children a financial education. I knew by the time I was 12 what my parents made, what our house cost, what the mortgage was, what my tuition was and why they had to make the decisions they did. I also had an idea as to what their retirement planning & where my college tuition was going to come from. I also helped them find our new house at age 14...

Just because the equity rose, it DOES NOT mask these problems.
Your monthly payments go up while your income remains the same. SIMPLE!
If she withdrew that 90k and placed in a high savings account, yielding enough interest to pay for those extra payments, then the answer is yes.

She saw her equity go up, she spent it as she felt comfortable knowing she has equity. This is probably the reason why she is 63y/o without any savings and soon to be her home.

evnyc, please take out your calculator because your statement does not add up.
"$452 is pretty parsimonious to cover food, health care co-pays or premiums, ..."

the money that you mention is coming just from SS, there's still the pension. if she had any brains at all, she would have had a retirement account as well.

a person with modest means, $2K per month, with a small housing costs, $600 + tiny tax + tiny other bills (unless she was running the AC while she was at work), should be able to SAVE. yes i said the S word, sorry. this was has been missing from people's vocabulary for most of 2000's until last year.

i come from a very modest (extremely lower middle class) home and my parents were able to afford paying for everything. we didn't have much, but we didn't get ourselves into this hole. based on percentages, she should have been perfectly fine.

she decided to do a reverse mortgage early, and it bit her in her behind.

aboutread,
I wasn't pointing any comments at you.

EV: in flush times, sure. But can colleges force mandatory retirements if their finances dictate? I'm curious. I know that at my alma mater, they "retired" a few professors before it became illegal.

We don't know what that other money will be, and since she is trying to get it with no guarantee that she will, we cannot calculate it, now can we? So my calculator is working just fine, thanks.

A financial education is the best gift one can give. It is, unfortunately, not particularly easy.

Ab, are you ba's doppelganger, by chance?

could it be that we were caught in a vicious price spiral due to our housing policies => increase in home-ownership => more people able to HELOC => Roof goes => Roofer can charge more (b/c more homeowners w/ more $) => doctors /dentists charging more (due to many more people going into Banking / RE brokerage of medicine = > and on and on ....

tiny bubbles... tiny bubbles....

http://www.npr.org/blogs/money/

Go to 21:50 or so: "Everyone thought everyone else was doing their homework." From a RE person who is "not apologetic." "If you can't understand and you can't get a straight answer" you probably shouldn't have invested.

w67th,
yes and this gov't needs to change those policies.
People get cosmetic surgeries in my office with their HELOC (10-30k per procedure). I am more than happy to take their money but I think their bunch of fools.

W67. Sorta. Except that "dumb" people shouldn't be deprived of home ownership just because they can't do calculus. Just channel Micawber. Output less than input, output less than input.

ev please read....
"With so many people out of work, and with her doctor counseling rest for a stress-related illness, she did not pursue another paycheck, negotiating to have her university pension begin earlier."

i checked the article before making a statement, i would advise you to do the same.

i hope that her children and grandchildren will learn a lesson. "My (gradma/ma) adds 2 and 2 and keeps getting 5.... Hmmmmmmmmmmmmmmm"

Shhh. That's one of my $making schemes. I am freakishly good at not eating all the icecream in the house. If I could only teach that or get people to take my courses teaching food discipline. I could have my own Anthony Robbins empire stat.

I have to say, this is where 3rd World immigrants clean up. That grandma would be out networking getting cash babysitting jobs PRONTO.

she was also stupid and blind in paying $20K for a roof of a $70K condo..... enough said.

tiny bubble, in the swine.

10023, i could not agree more. our daughter knows our income, and is irritated by the fact that i don't release more of it for general consumption. we have a rule here about windfalls, extra bonuses, and in one case a moderate inhertitance, but one that i did not expect. we can spend 10% of any such extraordinary gains (unless they are hugely extraordinary, which they haven't been thus far), and the kid gets something fab also. it's a family thing, but she knows what ppsf were two years ago, and what they are now, and she said to me recently that she had had her doubts, because all her schoolmates were telling her i was wrong (and i didn't hear that at the time, interesting), but now i suspect she's a bit obnoxious in her "accuracy." i've explained the stock market, the bond market, and emerging markets to her. and she doesn't seem bored.

Negotiating to have her university pension begin suggests that negotiations are still in progress, and in any event, figures are not given. So we're picking on an older woman with health problems for having problems finding work in during a severe recession? What exactly does this accomplish?

You haven't exactly provided any better figures, Ab.

"Dumb" is just too easy a slight. I prefer complex criticisms.

AR, wonderful philosophy. It's amazing how your approach to windfalls works, no matter what your income. Can we do a book on "The Ten Percent Solution" together?

Your kid is set, AR.

Dumb in quot. marks, ev. I have no issues with people who can't do financial math buying homes. In this case, it was a very smart decision by accident or design because her monthly costs were very low.

She fell down in upping her monthly costs so close to retirement and I'm pretty sure that admins can be forced out easily. The bank would be very stupid not to let her stay there for some reduced cost as I've said that the condo is worth much less in their hands.

It's possible that she may be better off getting foreclosed on and saving the money marked for the mortgage, short sale income imputed to her notwithstanding.

No, Nyc10023, please take it from someone who has spent over a decade in academia, outside of education: there's no political will to force out anyone, including admin. It's a huge problem; I don't think it is a good thing in any way, but it is a reality of the academic market. There's no particular reason that she would not have counted on working indefinitely barring health problems.

Again - foreclosures generally cost everyone more money. There's good data on this. Since we the taxpayers are now responsible for those costs, it behooves us to find cheaper options.

Sorry, my first sentence was really unclear: "outside of education" I mean outside of being educated myself. Two masters degrees = a lot of schooling, but I'm just talking about being employed.

Was her firing an extremely unusual event then? Wouldn't she have gotten a very good severance package? Or offered another job somewhere?

Yes, very unusual. Layoffs in academia are rare; it sounds like the university has a lot of problems. She probably had a decent severance package and used it to pay her mortgage. Let me address jobs elsewhere in my next post, since it is off-topic.

That's a VERY different spin on the situation, EV.

RE: older workers in academia, there is a lot of accommodation made for people who do not have marketable skills. There are a surprising number of people with high school diplomas and no higher education in academic support positions. If you are 63 years old and have, let's say a college degree for the sake of argument, and you're up against hungry 21-year-old new graduates who will bring new skills to a job for the same amount of money, what do you think your chances of finding a job are?

evnyc, they WERE rare. the numbers are frightful these days, as i'm sure you know. but it might be a good thread, because i don't think people have any clue what the implications are going forward in terms of state and local deficits.

EV: as you may know, I didn't go to college here, only grad school. Where I'm from, academia layoffs/buyouts were very common in the early 90s. OTOH, the social safety net was much better.

Even now, most places that can afford it are doing furloughs rather than layoffs. That said, Columbia just did layoffs. I spoke to some of the people involved in that today, and they were very stressed out. Layoffs really are rare in academia. Stability is supposed to make up for the crappy wages. When you get neither, you sort of have to question what you're doing there (as I am).

so we're back to her receiving a good severance package and having to use it to pay her mortgage because she didn't know what saving is...

let's not use "dumb"/"stupid"/"idiotic" on her. irrational/uneducated/unrealistic = delusional!!!!

you have to be Delusional to think that while your income stays the same and your bills are going up, you will be able to pay your bills. Ohhhhhh, sorry again, i forgot that she was going to tap her NEW equity to pay off the mortgage for her OLD equity.

ASU is a state school - has that historically made any diff. in layoffs/job stab.?

Apparently the term "vicious twit" has multiple applications. Who knew?

Well, state schools are more likely to be unionized. They basically take it out on adjuncts rather than admin. Adjuncts have zero rights.

sorry for living in a real world. she was definitely not.

ab/ba - I'm not in academia. But if what EV says it's true - then it was/is as close to lifelong employment as you can come. A little diff. when you take that into account. It's very true what you say about admin not having any paper qualifications whatsoever. None of the admins/secretaries had college degrees in my ugrad. dept - though quite a few took advantage of the tuition waiver and got one eventually.

A very close friend of mine just got laid off at Bard.

Mass industry-wide layoff are also rare in the law. it's so pervasive. i put up a chart on another thread of the spread between jobs created and unemployment. and it doesn't capture new graduates or other measures of the U6. and the numbers i am hearing, although not for nyc, of layoffs of people in public roles makes me truly ill.

Understanding how the world functions and how to survive and enjoy the ride begins at home. My father refused to get a credit card and died without using one. He just disliked the idea. He avoided debt like the plague. Taking risks, speculating with the future, was for businessmen, not for doctors. My kids are very aware of what is happening these days. Moments like this have a value in terms of real experience that is tangible, not learned in academia. Whenever I see a sign that can help them understanding the reality I point it to them. They find this engaging, unless they are totally in their own trip, which is a lot of the time...

AR: no excuse about poor little associates not knowing. The biggish layoffs post-Sept 11 should still be fresh in the minds of many. The offering of money not to show up to work IS without precedent in Biglaw.

The next big thing (demographics again!) is the collapse of public pension funds for city/state workers. This one might affect me personally as my parents' income stream is dependent on it. OTOH, they are welcome to stay with me any time free room and board and babysit for me. Their house is paid off and they do have some savings (though not enough for 30+ yrs).

"though quite a few took advantage of the tuition waiver and got one eventually."

Yes, that would be the biggest benefit these people could take advantage of. Unfortunately many didn't. I don't know way.

The sacrifice for working in public service or academia is supposed to be job stability and good benefits. When the institution can no longer do that, nor can they give wage increases, it makes the public sector look darn good, layoffs and all.

Way-why. Oops. PWD.

The younger ones did - the ones who probably would have gone to college had they just been 5 years younger.

ab_11218, not if you follow the logic of the banks. if home prices kept rising, no problem. if the banks were wrong, well they got bailed out, and maybe you entered the ranks of the homeless, or certainly had a hugely reduced standard of living. unlike certain people who made sure that the mortgage machine kept on going.

Mimi: this is the problem with affluence. Honestly, I learned so much in a very short time when my parents' backs were almost to the wall. They had to make some radical decisions when I was 13 to put themselves in an okay position for retirement & kids' college tuitions.

NYC, very true, but we're discussing a 63-year-old. For whatever reason, my observation that is that this segment did not take advantage of the opportunity. Maybe because they thought they had secure jobs.

My 4 year old is going to have a lemonade stand this summer and I hope to show her how hard it is to make even 2 bucks (she has to pay me back for ingredients, of course).

actually, 10023, i don't think there were massive layoffs after 9/11. bonus cuts to the bone, yes, but not layoff other than at a few firms.

but i shouldn't really have mentioned the law. i was just trying to remark on how the layoffs have entered areas relatively immune. today i'm seeing huge layoffs in the public sector, including both education and health care, usually immune (every institution during a downturn usually tries to limit wages, decrease employment through attrition, and very popular, reduce non-wage benefits, sometimes even while hiring).

evnyc, if you're at all serious, i'd love to collaborate.

That's a wonderful experience. I wish business was taught at the elementary/middle school level. I feel like it's really practical and has implications for the rest of one's life. I wish I'd learned it then, anyway. By the time I was in high school I was politically opposed and it took graduating as a starving college student to rediscover my interest in finance.

Not even in the early 90s? Maybe this is the diff - where I'm from, the early 90s recession was very severe. There were huge cutbacks in the public sector. This is when almost everyone in the public service started moonlighting and doing PT jobs.

Hmm, I never took a business or economics course ever. I thought they were too easy :) and for the yuppie-wanna-be kids who went around carrying briefcases in junior high.

I'm from the heavy-duty math/science crowd who were all CHEAP to the bone, even as kids.

I'm a little behind, sorry.

I can't speak to the nineties. I was in high school. I graduated from college in 2001, so all the half-assed training in web design I received were more of a liability on the job market than an asset. Wish that hadn't been the case. I've worked in four higher-ed places since then, and not one has ever done layoffs. Actually I don't know anyone who has ever contended with layoffs in academia, until the past year. Buyouts are different because they are targeted at profs who refuse to retire.

Heh, I'm from the hand-me-down segment. We knew no math beyond "I have X money to payday. If I run out early I'm screwed." Credit was introduced in high school. I had a $500 credit card for eight years, freshman year through three years out of college, paid in full every month.

Ah, okay. '95 to now have been pretty flush for everyone. I remember my HS teachers in the 80s talking quietly about how long they waited to be added to the union rolls and off the sub pool.

Yeah, they didn't start marketing cces to us in college until 2nd year. All of a sudden, these flyers magically appeared on our desks.

My mom was taught me a lot. When my dad left, she systematically paid down their marital debt. She hasn't had a credit card for years, but she knew it was important and got me one for college and made certain that I paid it every month - unless I called home and begged, which was humiliating.

if you bail her out, then you will have to bail out the wall street young who, at 26, decided that he could afford a $1M mortgage with only $20K down having a fixed rate of 3% for a period of 3 years. he thought that within 3 years of working 80 hr weeks, he'll get a $300K bonus and do a refi. there were plenty of those kind of articles back in 06/07 in NYT.

it was wrong for the bank to give them mortgages, it was wrong for the borrowers to take out the mortgages, it's wrong for the gov't to bail out the banks. this all comes down to one word "Greed". the banks wanted to make money, be borrowers wanted to get the houses/money/cars/etc.

AB: you're not reading the posts. I am not advocating a state bailout. The banks can most certainly modify loans on their own. And in this case, they would be stupid not to, as this condo is worth less to them as an asset than having this woman pay them 700, 800, 900 indefinitely until the end of time.

You have it backward, AB: if you *don't* bail her out to the tune of a couple hundred, you will be bailing out the banks to the tune of a couple hundred thousand.

The young wall street buck or doe making low down payments on manhattan property happens to be irrelevant to this particular discussion.

Contrast this to the Araya case. I think the bank should work out a deal with them, to do a short sale ASAP. The bank would actually recoup most of the loan (if I understand the BPC market) and not risk having the unit trashed. I think the AZ market has fallen more from this woman's last refi, so a short sale would lose the bank a lot more $ than keeping the woman (who has a good, fixed income) there paying 900 or whatever until the end of time.

No one has to bail anyone out (I don't think). The poor woman is a reliable income stream to the bank until she stops receiving her combined pension + state benefits.

I'm not familiar with the Araya case, but your point is well taken, 100023 - if we can keep people paying the majority of their mortgages and in their homes, we will collectively inflict less economic damage than we would through foreclosure. It is imperative that this point be made to banks. They do not get it. They're waiting for the next bailout.

Which I think was actually the point of the article.

so, you need to find a bank, really a gov't backed institution, to take her negative loan and give her another mortgage that she can afford. i would agree that this would be prudent. that institution would have to take all of her credit cards away to make sure she doesn't run them up like she did before.

better learning financial prudence later in life then never.

AB, it's potentially a win-win (better than now). She stays (immorally, according to you) and the bank gets 100k over 10 years (assume she lives to 73), and she won't have paid any equity and if the bank can sell for 100k+ - isn't that a better deal than what they could get today? Banks have people who can easily work the numbers out instead of blindly foreclosing.

In the Araya case, the loan on books is 850kish. Couple is now netting 4k/month. Mtge+cc+tax=6200?. Why would/should bank accept less than what they're due when they can arguable sell a 2bed2ba at 30West in BPC for at least 800k? It's only a 50k loss on a 850k loan.

loan mods are not bailouts. and your end result is fairly reasonable, even by nayysayers standards. but this loan doesn't look that bad for a mod program. the problem is 75% of the loans currently in default look worse than this.

who is going to make the banks deal with all of their excessive leverage? particularly with the current conforming mortgage process largely repeating the old?

maybe we should take all the excess leverage away from the banks, at the same time we remove the excess leverage from the consumers?

I don't know what the loans in aggregate look like. But it behooves the banks to go through each one and make those calculations. This can't be put off.

Okay, I just sliced two fingers making dinner and am signing off for the evening before blood saturates the keyboard. I think my point is made, so I'm going to nurse the rest of my wine and go to bed.

Evnyc,
you know what amazes me, you and your mom lived total opposite of this lady. Your mom paid down on her debt and did not carry a CC for a reason. You paid your CC in full every month and spent accordingly, not accumulating any debt. I just don't understand how you could even support this case.

With Araya's case,
They deserve a second chance (given that he was out blowing $200 per bottle)

"you're telling me that the bank committed fraud because it allowed her to borrow a portion of her home's value?!?"

I was actually at a foreclosure auction where a borrower stopped the auction by filing a suit alleging fraud because Citibank lent her too much money for the apartment.

"The current mortgage crisis is largely due to financial irresponsibility of the borrowers: "

It takes 2 to tango.

typo (given that he was NOT out blowing $200 per bottle)

take a look. medical bills/illness implicated in nearly 2/3rds of bankruptcy filings. normal middle class people.

http://www.eurekalert.org/pub_releases/2009-06/pfan-imb060309.php

I think the point of the article was look what the big bad banks did to this nice woman. All she did was pay her bills on time and now, due to job loss, she is having trouble making her mortgage payments. That is what has upset most of the people on this thread. The woman is not taking responsibility for her actions. She is 63 and lost her job. Don't most people realize that they may become incapacitated as they age and might not be able to continue working? Did she expect to work until she was 75? Would she have saved a dime during the next 12 years? Did she take advantage of the educational opportunities provided to university employees?

It is very easy for rich New Yorkers to sit here saying they feel sorry for her. The government should do something to help her. The banks were wrong to allow her to refinance and take money out of her house. Provide examples on how their fine young kids will never allow this to happen to them (how arrogant considering the wealth they are likely to be given). Bottom line was that this woman made some terrible financial decisions, lived beyond her modest means, and cannot afford her house. This has happened repeatedly over the last 50 years and will happen in the future. Simple.

I still don't see why someone who isn't even looking for work.....SHE IS NOT EVEN LOOKING!!!!!!!.....WAKE UP!!!!!! BOOOO HOOOOO HOOOOO. Why does this person deserve our sympathy.....why......she got herself into this mess............SHE IS NOT EVEN LOOKING FOR WORK!!!!!!.......

EVNY why is this situation even an issue......she took out the loan.....spent the money......and is not looking for work........and now she is crying........

THIS IS BS.......

gumby, would you agree that it looks like she's wearing a wig in the photo?

alanhart.. good day.... that's bc she's a DUDE.. .(just kidding)

aboutready... that's why I think this continual funding of Finance/RE industry must stop... get rid of the home loan tax deduction already and f'n fund a national health care plan.... then the rent/buy would not be such a hot topic here.... (hint, it's the policy decisions that favors "ownership" that I gotZ a problem with).....

Easier mobility and 2/3 or all bks eliminated ( wink, I'm excellent at statistics - inside joke on correlation and causality)..... eliminates one of the most blaring economic disparities between income brackets.... IMHO.... screw that... I know more than most people, iz not humble in the least ! :)

w67th, that's why i said implicated, you sly statistician you. although the article does make it quite clear that in a high percentage of the cases it was the straw that broke...

health care will get done, methinkz (just for you), because otherwise the gov't will have to deal with pitchforks. it is probably the only issue that could mobilize the peeps. and we couldn't have that happening.

Ah alan......alas I do not have the keen eye that you do........wig or no wig what's your point......she is not responsible for her actions.....ok......say that and we can agree to disagree......no one should be held accountable for their actions.....I don't feel like going to work today.........I think I'll just drink as many beers as possible and drive my car........I was high I didn't know what I was thinking........

No one wants to say I did this to myself and I have to face the music......instead it's the big corporation that did it to me or the guy next to me made me do it.......

This is what got us into this mess......I did not run up credit card bills when I had no money......my brother did not take out the full mortgage that the bank said he was qualified for........but now I have to pay for someone who did not save their money and took out a bigger mortgage than they could afford........

Just because the whole cake is in front of you does not mean you eat the whole thing......one knows how much one makes and can do simple math.......

Interesting people want her to get a job.
Reality is, employers won't be interested because of her age and weight and the potential for heathcare costs, etc. She's in a tough situation.
Here's the reality, she made mistakes in the past. Her bank didn't quite do her any favors either though.
But so she made mistakes in the past, and now she is in a pickle. So what does she do NOW? Concrete suggestions. Except from the person who suggested she stop eating.

The reality is she should have lied for the interview and said she was trying to get a job.......So what should she do now ....... concrete examples........???????.......WTF.......TRY TO GET A JOB!!!!!!!!!! HERE IS THE REALITY....SHE HAS TO TRY TO GET A FCKING JOB!!!!!!.......TRY TO GET A FCKING JOB.....NOT WHINE ABOUT HOW THE BANK DIDN'T OFFER HER A NEW LOAN..........WTF

Penier is quite correct. I don't dispute that she made mistakes. I only suggest that they are comprehensible mistakes, made within a larger macroeconomic context she could not have been reasonably expected to predict. She's in a tough situation. I'll never understand the pleasure people derive from kicking people when they're down. Concretely, it sounds as though she is pursuing the best options available to her: try to get a mortgage modification, negotiate to have her pension kick in early, presumably with reduced total benefits, and try to cut expenses. If it takes a newspaper article to help her get the loan mod, well, any port in a storm.

"you know what amazes me, you and your mom lived total opposite of this lady. Your mom paid down on her debt and did not carry a CC for a reason. You paid your CC in full every month and spent accordingly, not accumulating any debt. I just don't understand how you could even support this case."

@ba, this happened AFTER my parents got themselves into credit card debt. Learned the lesson the hard way. That is how I understand and support this case.

Yes, but you're understating the first part of your post, evnyc. It's not just that the formula for most university jobs is a tradeoff between low salary and job stability (non-cyclical industry, unlike finance, big law, advertising, and many others, in which employees should assume layoffs).

It's the particular story of Arizona and ASU. For decades, both have experienced exponential population growth. Also for decades, there was a set-in-stone funding formula between the state and the universities that took into account that population growth, and allowed for planned growth of the universities. And indeed, in the past the population growth continued at a heady pace regardless of economic cycles, and with it steady funding for university growth. Not only did the student body of ASU rise from about 40,000 students to 65,000 students in less than 20 years, but they had a big problem retaining staff at all levels -- quite the opposite of a layoff environment. Not only did they keep building and building the campus, but they opened three new ASU campuses throughout Maricopa County.

As it happened, that all fell apart because the AZ legislature changed the funding formula a couple of years ago, causing dozens of academic programs to be closed, two of the new campuses expected to be shut down altogether next year (genius move), massive layoffs, freeze on new student admissions (in a still-growing-fast state, and at a time when it makes sense to keep people out of the job market).

So that's the background for her financial decisions. She made the right ones, although she could have been more debt-averse. She could have saved up to buy her condo in cash, as Germans and many other Europeans always did until very recently. By the way, for those of you who don't know what a condo is in sunbelt states, think papier-mache sprayed onto chicken wire and covered in cheap-wall-to-wall carpeting. Popcorn ceilings. Plastic shower/tubs and untiled bathrooms. Basically, the ownership step before a starter home. Hardly extravagant.

$20K roof? No $20K spent mostly on a roof. Let's say $12K roof. And I'd assume roofing materials are different in a place that has >120 degree days, wouldn't you?

We don't know whether she planned to retire anytime soon, but is it ridiculous to assume that she planned to sell her condo and retire to lower-cost Mexico, as many do? And that her costs in retirement would be lower than most people's, because another part of the university formula is a salary deferral in the form of retirement health insurance?

Is it also ridiculous to assume that after being laid off, she found out she had cancer and spent her severance pay dealing with that? Note the wig and the cortico-steroid bloated-looking arm. I don't know why she'd submit to an article of this sort -- maybe she thought the press would highlight the stupidity of banks' not trying to work with their clients, while receiving massive government bailouts -- but in our culture, health matters are usually kept even more private that financial problems.

She is indeed acting responsibly and pursuing the best options available to her now, except that she can get Three Buck Chuck instead of $6 screwtop wine.

gumby's not as stupid or callous as he sounds -- he's just a flamer.

evnyc: "I'll never understand the pleasure people derive from kicking people when they're down."

Not about kicking people at all. It's about people like her in this country that believe they are ENTITLED to something at someone else's expense. I don't owe her sh$t. And the U.S. government doesn't owe her something because SHE got herself into her financial predicament. And this type of ENTITLEMENT is f#&king up my country. We have excuses for everyone in America. "I would have been fine, BUT FOR ... [fill in your favorite scapegoat]." You know what? I would have been an astronaut BUT FOR my parents f#4ked up my genes and I had to get LASIK."

ManhattanKing, you're buying the banks' slight of hand. The banks got a bailout at someone else's expense, and ostensibly its purpose was precisely to help those who had always made mortgage payments and are likely to continue, but need a bridge in a down economy, frozen (or slushy) mortgage market, and housing prices that are down 55% or so, as is the case in AZ.

Alan, I didn't know all of that about AZ and ASU. I knew ASU was expanding hugely and experiencing some severe growing pains, but the other than that I clearly have not kept up with my professional reading! It sounds like it has been taking an enormous toll on employees.

Manhattanking, it absolutely is about kicking people when they're down. This is about you not having to cough up more money to banks when she defaults on her loan. We own the banks now, and we gain nothing by allowing more people to go into foreclosure. A lot of us are furious over the bailout, including me. This is about pragmatism, not ideology.

evnyc: "I'll never understand the pleasure people derive from kicking people when they're down."

the primitive hiding inside establishing pecking order.

evnyc: "A lot of us are furious over the bailout, including me. This is about pragmatism, not ideology."

As I have stated on this thread, I understand that we have to bail her ass out b/c it is less painful than foreclosing on these people. I may have to bail her out, but I don't have to feel sorry for her and I don't have to like it.

that primitive hiding inside is what allows us to exist at all. Maybe we should have all just stayed in the cave. How ridiculous. You don't have to like it, just respect it, say thank you, and be on your way.

Manhattan, there are plenty of worthy recipients of your anger. This is not one of them. Save it for those who made genuinely stupid choices that would not have worked under any but 100% optimal conditions. After all, we have a nice chunk of Alt-A and Option ARMs coming down the pipeline, and I wouldn't want all the curmudgeons to get tired out before round 2. ;)

Patient, our ability to empathize and approach problems rationally allows us to coexist. Maybe the cave approach worked when there weren't as many of us, but now there are. Short of genocide or total catastrophe, that's reality now and in the future. Indeed, without being able to suppress our schadenfreude there wouldn't be so many of us in the first place.

take a look at this ad from Chase, summer 2005. then tell me the banks weren't culpable.

http://www.businessinsider.com/chase-mortgage-ad-from-2005-is-funny-and-scary-2009-6

Oh. My. Effing. God.

sorry to bring it back to that level, when evnyc was doing such a good job with the article discussed, but that is priceless.

http://www.youtube.com/watch?v=Xasl4h1TPS8

Okay. I loathe Seth Green, but this is pretty hysterical.

No worries. I'm happy to pop back to that level any time, as long as isn't outright meanspirited!

I can empathize with her personal situation without opening my own wallet. Unfortunately, the gov't isn't letting me do that. What is happening is what happened last time with the S&L crises: there are little consequences (or less consequences than there was booty) so the people who took big risks, whether on purpose, but stupidly, on purpose knowing they were scamming, just plain blind dumb-ly, or whatever got to eat their cake and now those of us who didn't do that, didn't eat the cake, didn't even smell the cake are getting to pay for the cake. I feel it's akin to "your right to swing your arm ends at my nose".

There are many different groups who got the proceeds of what ended up really being a systematic, gov't supported (even gov't INDUCED) scam. From Wall Street bankers to individual homeowners, they are all, in the end, being rewarded (well, they already were rewarded) for taking unwise risks. But now everyone gets to pay for the risks they took. It's like some guy went riding around at 130MPH on a motorcycle with no helmet and took a major spill, and instead of having every bone in his body broken, the gov't decided to got break one bone in each of his neighbors bodies and let him walk away with a severely broken leg.

And you know what? The result of what we are doing is only going to make it worse next time. I know, how could it get worse? Well, that's what everyone said last time with the FDIC bailout and RTC, and look at how much worse it is this time around? people learned last time that if they do this same stuff and it blows up, the consequences to those who took the risks are greatly diminished than what the agreements they made going in. Can you imagine if in Las Vegas, there was a roulette table where you got paid off even money on a win, but when you lost, the casino "bailed you out" and gave you back half of your loss? Think about it.

REO, many on this board are not capable of empathizing at all. Again. I am not thrilled about the path we have taken. But having taken it, there's a lot of people deserving of scorn, and I repeat, this is not one of them. She was not scamming, she was not dumb, she was comparatively prudent and got blindsided by macroeconmic forces she could not reasonbly have been expected to predict. I am a renter. I have never owned. I smelled the cake and never tasted it. I get to pay for it too, and as I'm GenX I expect I'll be paying for this for my entire adult life, with no expectation of retirement. I have heaps and heaps of vitriol just waiting for appropriate targets. See my posts on Bozo the Econmist (aka Edmund Andrews) if you think I'm a softie twit.

And apart from the meanspirtitedness directed toward the lady in the NYT article, I completely agree with you. We are setting ourselves up for a world of pain in the future. We're kicking the can down the road, and your roulette tale analogy is completely apt.

http://www.youtube.com/watch?v=rFTZ3flsipE

Per your Vegas comment, REO, I thought you might appreciate this rather lengthy video. I really feel for people who get evicted with 10 minutes notice. That is something preventable. That we can do something about - and it would be the right thing to do.

a) That can never happen in NY (no notice evictions).
b) I think it was just yesterday I described that exact situation here on SE: owner takes rent payments, doesn't pay mortgage, gets foreclosed on, tenant gets evicted.

What are the eggs she has in the photo?