by The Berean 113 Replies latest jw friends
Banks are businesses. They have every right, in a capitalist society, which last time I checked, we still are, to make money.
Auto manufacturers are businesses. They have every right, in a capitalist society ... to make money by selling defective products. Unsuspecting consumers have no beef with them if they bought the car willingly. No one forced them....
PS, not everyone bought their home without documentation. My loan was a prime loan. Good credit score, full documentation. And I'm upside down. I'm not walking away but others in my situation are. Because through the fault of the financial disaster caused by the banks, their homes are now under water.
With your ethical model one can only guess you were an Elder.
As I noted above, if they are selling *defective products*, they should be held accountable by the very politicans who also got sweetheart deals. Why don't you call Senator Christopher Dodds office and ask when they will be do something about all the presumed fraud that has gone on?
Every news show from GMA to 60 Minutes has shown a down and out homeowner who we are to feel sorry for who admitted they took out a loan without documentation. But, they didn't understand that they didn't qualify for that $600,000 house!!! They, only making $30,000 as a janitor, just wanted to live like those people they see on TV. Why shouldn't they *Go for it*? So, when the loan officer presented them documents that showed their payment would be $500.00 a month they signed away. They, being unable to comprehend that the loan only would be $500.00 for 3 months, and would jump to $3000.00 wasn't covered at the closing. So they say. But, their signature is on the document showing it was covered at the closing.
These stories are rampant. Fraud? Obviously. There are numerous mortgage companies who made millions who are now under investigation and numerous people have gone to jail for mortgage fraud. As they should. Were banks involved? I'm sure their employees were.
The homeowner? They should be out of a home and their credit should be ruined simply for being stupid and greedy. Is that a crime? Of course not. But should there be a price for that stupidity? Yes. And they, and we, the taxpayers are paying it.
Are all bankers to be scorned for being bankers? I don't think so.
Bankers, and every employee that works at banks provide a necessary service and necessary product. If you don't like what they provide and don't like their service, shop somewhere else. Like the local pawn shop. You can get a loan from them. Or the local Pay Day service. I hear they have loans. For about 29%.
Auto manufacturers are businesses. They have every right, in a capitalist society ... to make money by selling defective products. Unsuspecting consumers have no beef with them if they bought the car willingly. No one forced them....
Ummm, correct. And, when they sell a defective product, the Consumer Product Safety commission is on their butt, as well as the Federal Trade Commission. As well as the NTSB.
Next thing you know, that manufacturer will be out of business. I would hazard a guess that Toyota's sales will be down. Big time.
When a new car is driven off the lot, it's value goes down, on average, 28%. Why don't people just walk away from those loans routinely? That question still stands.
Yet, they find it acceptable to walk away from a home loan.
PS, not everyone bought their home without documentation. My loan was a prime loan. Good credit score, full documentation. And I'm upside down. I'm not walking away but others in my situation are. Because through the fault of the financial disaster caused by the banks, their homes are now under water.
Most people bought their homes with documentation. Unscrupulous mortgage lenders and loan officers were able to get those through on a minority of loans, but enough that it caused a ripple.
Being upside down is because of prices being ran up. I saw it in my own area. People were bidding on homes. Bidding wars were going on for homes, new and used. When prices get artifically inflated because people believe the price is going to keep going up and someone else will pay more for it, this happens.
The banks took a calculated risk in giving out the mortgage. If you are willing to say "Yes, I'm willing to pay $3000.00 per month for my mortgage, yes, I'm willing to sign the house over to you if I don't pay, etc., etc.," the bank will take the risk and give you or anyone who is credit worthy a loan.
There is money to be made for them either way. Whether or not you pay they win.
Don't you all see that? They win. It is all business to them. Busniess. It is not ethics. It is not morals. It is M-O-N-E-Y.
If you held individual stock in those banks, you would want them to be making as much money as possible so you could be making as much money as possible. It is business. It is money.
Money really does make the world go around.
There is money to be made for them either way. Whether or not you pay they win.
Don't you all see that? They win. It is all business to them. Busniess. It is not ethics. It is not morals. It is M-O-N-E-Y.
If you held individual stock in those banks, you would want them to be making as much money as possible so you could be making as much money as possible. It is business. It is money
Okay, so according you you, only the consumer needs to have "ethics" and "morals" and not make a decision to walk away based solely as business? Like you said, the banks win anyway because they get to keep the homes. According to you banks don't need to have ethics or morals but consumers do!
Consumer (Human Being): I want to buy that house, but I don't have enough money.
Bank (Business): I have money that I can lend you so that you can buy that house. It will take 30 years for you to pay me back, but if you promise to pay me my money back, I will lend you that money. Now, if you cannot pay me back the money that I loaned you, and you said you would pay back, then I want to be able to sell that house to get my money back, or you can sell it and pay me back. Is this agreeable to you?
Consumer: Yes, that sounds great. Thank you.
Bank: Thank you. By the way, I don't want your house, I just want my money back, with interest.
Consumer: I understand. If for some reason I cannot pay you back, then I will get help to do so, or I will have to sell my house so that I can pay you back.
Bank: That works for me, as long as you know that if you can't pay me back the money I loaned you, you will have to give me your house.
Consumer: Yes, I understand.
Bank: Great, then, we have a deal.
Banking is business and so too is real estate. There is nothing immoral about backing out of a business deal if it doesn't work for you or if your profit isn't high enough - that's a lesson we've all learned over the past few years. The banks have had their losses socialized - since nobody has a clue about where the trillions have gone and who has paid any of the money back, as an investor in the banking industry, you, the taxpayer have every right to disengage from the investment if you need to.
The bank gave you money to buy a house and their collateral is the house and your credit rating. Not paying the debt or loan, means you forfeit the collateral or the house and ruin your rating. Contract obligation has been fulfilled in the case of default. Continuing to pay on a house that has devalued substantially, is good for the bank, not for the consumer. The issue is one of finance and legalities. Again, if a corporation is now a person under the law - the same moral applications should apply equally among both parties. It does not. Is it morally okay for a bank to foreclose on a home, toss the family out into the street and leave them sleeping in their car? Most people say yes..the family broke the contract, it's in the banks best interests. Flipped around - why would we believe it's immoral for the same family to walk away and break the contract if it's in their best interests? The bank looks at the numbers and recognizes only a transaction as business - people need to get smart and do the same. sammieswife.
The problem with the above thinking is that a real estate loan is a promise to pay the loan back with interest. The above viewpoint practically takes the notion that non-repayment (i.e. walking away in default) is a viable business option - which it is not. Repossesion is a penalty for breaking the contract - not an option as part of the contract.
A person who deliberately just decides to NOT pay it back because the home temporarily lost value is breaking a promise - how would they feel if a bank should decide to reposses their home even if they were making the payments because the bank thought it might be worth more than the repayment of the loan?
Another viable point is that when many people walk away from their loans, it extends the real estate value crises by putting too many properties on the market.
You know what else really pisses me off? Those commercials for getting out of paying all your back taxes. If people just paid them when they owed them instead of letting them stack up, they wouldn't be in such trouble
I feel exactly the same way. And for my 2 cents worth I am with the "if you can afford it keep it, if you are in serious financial trouble as in you lost your job or had to take a cut in pay and can no longer afford the payment. restructure or walk away" crowd.
