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View Diary: 60 Minutes Gets It (212 comments)

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  •  For the last several years, banks and corporate (11+ / 0-)

    Property owners have walked away from their properties when they got upside-down and those "investments" no longer made sense. They just turned in the keys and walked away. But if a citizen does that, people are outraged. If people get help, others get bitter

    Why is it that moral hazard only applies to everyday folks? Moral hazard is a weapon wielded by the powerful to keep the rest of us in line. Ten years ago,we bought a reasonably priced modest home in a safe older working/middle class community,  put 20% down with a 30 year fixed. We were actually told we could afford twice that and we should , according to prevailing wisdom, "buy all the house you could afford." But we're folks of modest needs and the idea of a humongous mortgage terrified me, despite the promise that we would "grow into it." Needless to say,  we didn't upgrade as our peers did.

    There were 37 foreclosures in our small community as of this December.  Want to know who can't sell her house for what she bought it for? We can't compete with the foreclosures.

    Moral hazard? Please! The moral thing is to keep people in their homes, sending their kids to local schools, paying taxes, as permanent members of the community.

    What "stings" is knowing that we can't take a better job in another  part of the country because we're tied here by a house.

    If we were a corporation, we'd just walk away. Yes, I believe my word is my bond, and others should too. But there's this funny thing called life that happens. Corporations aren't bound by absolutist "morals" (a funny word we use for simple breach of contract).  Until they are, humans who are struggling shouldn't be either.

    It was the best of times, it was the worst of times... - C Dickens.

    by grover on Mon Apr 04, 2011 at 12:26:26 AM PDT

    [ Parent ]

    •  I bought the modest house. (4+ / 0-)
      Recommended by:
      AnnieR, bigrivergal, Linda Wood, grover

      Smallest on my street. It's worth, according to county, 14% less than I paid for it 4 years ago.. Lost $10.000 in value in 2010. I have a lot of sympathy for folks who tried to do the prudent thing and got screwed anyway.

      Let tyrants fear.-Queen Elizabeth I

      by Virginia mom on Mon Apr 04, 2011 at 04:51:35 AM PDT

      [ Parent ]

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