High FICOs Hightailing It
Anton Chigur writes:
El Bee: Would appreciate your thoughts/comments relative to the scenario outlined in the below article.
http://www.latimes.com/classified/realestate/news/la-fi-harney20-2009sep20,0,2560658.story
Thanks Anton for sending this in. This article has been making the rounds and basically says owners with high FICO scores are walking away from properties in droves. No surprise. Those with good credit scores tend to be better with money and can spot a worthless investment when they see one. So they bounce when they see the writing on the wall.
As far as my opinion on the matter, lots of people have encapsulated my own thoughts pretty well. One such person is a reader of this very blog:
Wizard writes:
Anton Chigur.
Purely a business decision.
Nothing ethical or moral.
It's in the contract,house is collateral for loan. They made loan with said collateral.
Also to be considered: With so many walkers..
credit scores will adjust to suit.
That pretty much says it all. And Wizard's credit score point is especially important because ultimately, as long as there is no real penalty (I'm sure having busted credit is no Swedish massage, but in the context of being among MILLIONS of newly FICO-challenged ne'er-do-wells, it won't mean much. I mean, the banks have to lend to somebody, and if they excluded everyone with a foreclosure, short sale or bankruptcy, there'd hardly be anyone left to lend to!) or social stigma attached then there will be absolutely nothing to stop this rapidly growing trend.
And especially now that the mainstream media has caught onto what Dr. Housing Bubble and Calculated Risk have been talking about for ages, you better believe Joe Six-Pack will finally see the advantages of such a move and be all aboard the Hightail Express.
Is anybody out there ACTUALLY still using the "immorality" argument? Even if someone could make a compelling argument about the "unethical" nature of moonwalking away from a severely underwater, potentially life-ruining albatross, it's tantamount to moaning, "Hurricanes are doo-doo heads."
Well, yeah, maybe so, but that's not going to stop a Category 5 from wiping out trailer parks in Florida.
El Bee: Would appreciate your thoughts/comments relative to the scenario outlined in the below article.
http://www.latimes.com/classified/realestate/news/la-fi-harney20-2009sep20,0,2560658.story
Thanks Anton for sending this in. This article has been making the rounds and basically says owners with high FICO scores are walking away from properties in droves. No surprise. Those with good credit scores tend to be better with money and can spot a worthless investment when they see one. So they bounce when they see the writing on the wall.
As far as my opinion on the matter, lots of people have encapsulated my own thoughts pretty well. One such person is a reader of this very blog:
Wizard writes:
Anton Chigur.
Purely a business decision.
Nothing ethical or moral.
It's in the contract,house is collateral for loan. They made loan with said collateral.
Also to be considered: With so many walkers..
credit scores will adjust to suit.
That pretty much says it all. And Wizard's credit score point is especially important because ultimately, as long as there is no real penalty (I'm sure having busted credit is no Swedish massage, but in the context of being among MILLIONS of newly FICO-challenged ne'er-do-wells, it won't mean much. I mean, the banks have to lend to somebody, and if they excluded everyone with a foreclosure, short sale or bankruptcy, there'd hardly be anyone left to lend to!) or social stigma attached then there will be absolutely nothing to stop this rapidly growing trend.
And especially now that the mainstream media has caught onto what Dr. Housing Bubble and Calculated Risk have been talking about for ages, you better believe Joe Six-Pack will finally see the advantages of such a move and be all aboard the Hightail Express.
Is anybody out there ACTUALLY still using the "immorality" argument? Even if someone could make a compelling argument about the "unethical" nature of moonwalking away from a severely underwater, potentially life-ruining albatross, it's tantamount to moaning, "Hurricanes are doo-doo heads."
Well, yeah, maybe so, but that's not going to stop a Category 5 from wiping out trailer parks in Florida.
Comments
Post a Comment