So much for personal responsibility!

http://news.bbc.co.uk/2/hi/business/7529277.stm

In May 2006, at the height of the housing boom, Karen Trainer bought a $500,000 apartment in California - with money borrowed from her bank.

By this year, Karen still owed $500,000 on her mortgage, but her apartment was worth $200,000 less.

So she was deep in negative equity and, to make matters worse, the interest rate on her loan was about to increase.

As a successful professional, Karen could comfortably have managed the higher mortgage payments her bank demanded.

Instead, she decided to stop her mortgage payments altogether and let her bank repossess her apartment.

The law needs to be changed. In any other case, if you make a bad investment, too damn bad, you still need to pay your debts. Not if the investment is real estate, apparently.

It was reported on Glenn Beck a couple weeks ago that a couple in Florida with 3 or 4 children, ……. a blonde white female and an African American male, ……. were given a “free n’ clear” title to a “makeover mansion dream home” … along with enough cash in escrow to pay all taxes and insurance for 25 years.

So what did they do?

Went to a bank and took out a $400,000 loan, ……. using their house as collateral.

They couldn’t make the payments …….. so the bank foreclosed and took their home.

But they are not worried, ……. the Bill that Congress just passed ….. will prevent them from losing their home.

cheers

But one has to add into the equation that homes were artificially inflated by the banks and mortgage backed securities. Their ponzi schemes were fueled by Wall Street and international investors.

With an $800K house now worth $600k, if I do the "right" thing I'll be the one paying for the "Wall Street got drunk" crowd, no?

Not only that, as the financial sector wrote the bankruptcy laws, those who are underwater are compelled to pay their credit card debt. This has CAUSED people to not pay their mortgages. Be careful what you wish for!

http://tpmcafe.talkingpointsmemo.com/2008/07/18/credit_cards_bankruptcy_laws_a/

Also, read about the "Global Pool of Money" here: http://www.thisamericanlife.org/extras/radio/355_transcript.pdf

Really is a fascinating read.