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Tag Archives: moral hazard
Why Pay the Mortgage or Rent when you can live 16 Months for Free?
Clearly it is imperative to speed up the foreclosure process. To not do so is inequitable and creates moral hazards.
However, some who do not like the current system pretend to be worried about the .0004% or whatever preposterously low number of homeowners who might be kicked out of their homes allegedly in error. Continue reading
Posted in Foreclosures, Fresh Perspectives, Home Economics
Tagged Foreclosures, moral hazard, Strategic Defaults
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ZIRP and the Imploding Speculative Economy
A slow-growth real economy has been replaced with a credit-based speculative financial economy dependent on low interest rates and systemic fraud to survive. It is now imploding on a global scale. Continue reading
Strategic Default Is Merely Collecting On Home Price Protection Insurance Sold By Lenders
There are many ways to view strategic default. Borrowers use mortgages like option contracts giving them a “put” from a lender. It can also be viewed as an insurance contract against downside price movements. Borrowers are merely collecting on their insurance policy. Continue reading
Posted in Best Of The Storm, Fresh Perspectives
Tagged Foreclosures, moral hazard, Strategic Defaults, The American Dream
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The Ethics and Morality of Borrowing and Lending During the Great Housing Bubble
Borrowers and lenders behaved badly during the bubble. Some were unethical and some were immoral. Today we examine these distinctions to see what we can learn from their mistakes. Continue reading
Posted in Best Of The Storm, Fresh Perspectives
Tagged Credit Scores, HELOCs, moral hazard
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Walking Away from a Mortgage to Secure Their Children’s Future
Like yelling “fire” in a crowded theater, borrowers will run to the exits when they realize their moral obligation to their family outweighs their false moral obligation to repay their mortgage debt. Lenders are praying this does not happen. Continue reading