Every people in every country have their own way, to deal a blow to capitalism. Corporations, banks shenanigans will not go un-punished. The whole scenario of strategic foreclosures proves that everybody gets its comeuppance.
In 'I won't pay' movement spreads across Greece, the following comment was made ..
"taciturn-2970886
The movement will get here..It's already begun with strategic defaults on mortgages,
As our citizens become more informed on the corrupt, egregious conduct by our banks, brokers, and Goldman Sachs in particular, our citizenry will seriously revolt.
The capitalist scammers will get their just dessert from us hard working patriotic Americans..The scammers will be bashed..Wall Street has destroyed America.
The day will come when the miscreants in high finance will be hung out to dry.
9 votes
Reply#10 - Tue Feb 22, 2011 7:09 PM EST"
Expressed as a movement, that has already begun in USA. Strategic defaults as this article "Are Strategic Defaults Immoral? " informs.
"Strategic mortgage default is in the real estate news these days. Since many homes have lost a lot of market value since they were purchased and the amount owed on the property is much more than the home would currently sell for, some people are deliberately letting the home go into foreclosure so the homeowner can get out of the debt."
Existing mortgages, exceeding current market values, that drive homeowners to stop paying the mortgages to the lending banks, leading to foreclosure of the property so the homeowner could get out of debt. And who chooses to act in such a way?
In article "An Example of Deliberate Default of a Mortgage"
"Why would a person with a good job who can afford to make his house payments just stop doing so and let the property fall into foreclosure? The answer is that in places like Phoenix, Arizona or Las Vegas, Nevada, where prices increased the most during the bubble, home values have in turn dropped by large amounts. The average in those areas is in the 50-60% range and is sometimes higher than that. So the home owner now owes substantially more on his mortgage than the property is worth."
Persons that have good jobs and can afford to make house payments but decides not to, and they have been doing it since 2009, as Wikipedia mentions.
"A study in September 2009 from the credit reporting agency Experian and consulting outfit Oliver Wyman estimated that close to a fifth of troubled mortgages in the U.S. involved borrowers who were strategically defaulting."
A fifth of troubled mortgages in September 2009, involved borrowers strategically defaulting, with the banks taking the losses
"So this begs the question about the morality of sticking someone else with one’s mortgage debt. To be honest this practice does feel a bit slimy. If their bank gets stuck and has to eat most of the loan amount and take the loss, the costs will eventually be borne by others in the community through higher prices and more difficult loan terms for other people. On top of that, the borrowers are adults. They signed a valid contract, so why should’t they pay their debts, especially if they have the money?"
Losses which the banks, as their aged-old practice is, expect to roll the costs to others in the community through higher prices, difficult loan terms. As if they can. In an already stagnant housing market, which means they will bear a devastating blow in their finances, a loss that is not recoverable.
And therefore the morality issue. Moral consequences split between the banks and prospective new mortgage borrowers who are expected to suffer from such acts of deliberate defaulting. But since, the state of the housing market is such, it is doubtful whether the banks will be able to pass the costs to new mortgage buyers, and the banks themselves would suffer the bulk of the blow out of the deliberate acts of defaulting.
Banks experiencing the other end of the stick, for the first time, and the issue of morality goes solely towards them. Would someone feel remorse about the blow they are about to suffer?
"Then again one might ask how bad do banks feel when they foreclose on a homeowner? The big Wall St. banks created dubious financial instruments with mortgages, and they approved loans for buyers who were not the least bit qualified. They did this to make quick paper profits and give themselves huge bonuses."
Morality? Such a flimsy excuse. What a laugh. Where did banks get their morals from? What kind of morals they abide to?
"Ethical issues
Some ethicists have questioned the morality of strategic default, arguing that one has a duty to make payments on debt if one is able.[4] Others argue that there is no such moral duty, a loan being a contract between consenting adults, and noting that financial investors routinely default on non-recourse loans that have negative equity.[3] Some argue further that there is a moral duty to strategically default,[4] and that one should make such decisions based on one's financial interest "unclouded by unnecessary guilt or shame", as lenders who do not modify mortgages do the same, "seek[ing] to maximize profits or minimize losses irrespective of concerns of morality or social responsibility,"[5] or more bluntly stating that "The economy is fundamentally amoral."[6] Further, obligations to honor a contract are balanced by obligations to oneself and one's family, the latter speaking in favor of strategic default, some arguing "You need to put yourself and your family's finances first,"[6] while one also has obligations to a community, which may be damaged by default.[4]"
After going to such great lengths, as to declare that one's financial decisions should be "unclouded by unnecessary guilt or shame" and by 'one' meaning any entity, that entity being either a physical person or a financial corporation, the entities entering this domain of financial activities, the lenders, the banks "seek to maximise profits or minimise losses irrespective of morality or social responsibility" .. and somebody ..or better an entity that does not have to be considerate towards the members of a society that is a part of, acting irresponsibly, is not merely amoral, but immoral.
These are the morals, banks abide to, a concoction to justify their deeds, properly termed misdeeds. And the banks do not deserve anything but, the very same immoral stick, they have been waving for time immemorial, against people.
As economy, beyond the maximising profits and minimising losses it is most and foremost and unequivocally about the lives of people.
As the obligations to oneself and one's family weigh a lot more than the obligations to honour a contract, since without individuals capable to sustain family and self they would not be a society at all. Obligations to contracts are only possible, if and only if, obligations to oneself and one's family are met, but not the other way around.
The quick paper profits, vehemently sought out by banks, the strategic foreclosures, expressed as a movement, the quick paper profits backfiring. Banks foreclosing to their heart's delight, assumed that all their paper profits would be realised in tangible solid assets but alas they created a trap in which they have fallen into, like helpless mice, the current value of the houses foreclosed do not reflect the paper values out of which their paper profits were based upon. Do not materialise.
The banks take the loss and as their current and usual practice to roll the costs to new clients with higher prices, higher prices of what? Of foreclosed houses? .. how can they? to such a slow weak market .. how can they push house values up .. who would buy them?
They will have to bear the full losses themselves, probably starting by cutting the bonuses to their CEOs, or firing a few of them. With all the repercussions in the housing market implied, as themselves certainly, as all other Americans have homes, paying mortgages which now they could no longer afford and judging by their bonuses (oh, you are transgressing .. drooling ..) their houses would be enormous .. defaulting on their loans .. the burden will passed on .. on some other banks, if not their own .. the whole affair spiraling .. out of their control.
.. banks will go bust .. new bailouts ahead?
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