Dow

[trendy]

Jess9...Yeah I read that article here - may have been in the WSJ.

Basically, folks with good credit are doing the numbers and saying I have so much negative equity in my home now due to the collapse in prices from the subprime fall out why should I keep paying the mortgage. They basically hand their home back to the bank and have no further debt obligation. Yes, they take a hit on their credit rating for a year or two but at least can start to build equity up again.

We are talking about white collar folks doing this, there is concern if this trend catches on the banks will be buried in foreclosures. Even now some folks haven't paid their mortgages in 12 months and the banks still haven't called them. The banks are now pushing out the period for declaring foreclosures from 120 to 180 days, anything so the bank doesn't have to recognize the bad debt on the books. It won't be long and 365 days of no payment will be OK.

There is discussion to change the foreclosure law so that the owner always has a future obligation of the debt if they go into foreclosure.

[peat]

amazing! America seems to have mastered the concept of gain with no risk. sweet I'll borrow against my equity in a rising market and walk away when it goes sour.

me scratches head
thinks - there must be a catch.

[AMR]

The person's credit rating is destroyed...but nothing that can't be restored in 6-7yrs time.

[zacman]

Trendy says :
There is discussion to change the foreclosure law so that the owner always has a future obligation of the debt if they go into foreclosure.[/QUOTE]


Trendy, are you saying that there is no personal covenant/liability attaching to US mortgages ?

zacman

[Jess9]

Dow certainly looking lofty - with little good news to support it. Perfect situation for a good drop, and a little punishment.

[Capybara]

Demand for oil drops off because the economy is faltering so the sharemarket rises... Am I missing something?

[Jess9]

Only if your not cashed up.

US housing slump discussed on RNZ at 6.55pm, about half way through and greater loss in value now expected. Freddy or Fanny have posted losses 3 times greater than analysts expectations.

[Capybara]

Good job I was short the dow then...