Quote:
Originally Posted by afc wimbledon
While I would agree it is a sensible question, it isn't the fault of a buyer if they choose to think they will get a job before the ballon payment comes up etc etc.
Not only that but for alot of the worst purchasers it was a good decision even if they defaulted, they had nothing to start out with, they got to live in a cheap house for a year or two and now have gone back to nothing, we are the ones that got screwed, not the broke assed schmoes that have defaulted.
If someone offered you several hundred thousand dollars to invest in the stock market that you don't have to pay back if you lose it all wouldn't you take it?
There is no difference between these mortgages and the many here that live paycheck to paycheck with a leased car they don't need and several maxed out Visa's, in the end it is the banks job to watch out for their money.
|
I understand that the banks need to do their due dilegence before they lend their money and they are responsible to whom they lend.
It is myth to think that if you had a pulse, you qualified for loan though. It was a relatively small percentage of buyers who fit within that category of obtaining a mortgage with little to no assets, little to no income and having nothing in the end either.
Of course, it necessarily isn't that simple as walking away and wiping the slate clean. Was the mortgage origination a recourse or non-recourse, or did the loan orginate in a state that even allows a recourse loan?
Even if you live in a non-recourse state and the money isn't a purchase money loan, then they come after all your other assets to make up the difference and you don't just lose the house you're walking a way from or just destroy your credit score, you have a deficency judgment to contend with.
Try walking away from your mortgage in BC and see what your creditors do about the house that goes down 30% that you walk away from (that is rhetorical).
Alberta is a little different in that respect. Growing up, I remember one of my parent's friends in Calgary during the NEP in the early 80s encouraged my parents to follow their example by walking away. My dad thought that was plain silly of course since they were gainfully employed.
The friends just dropped keys in the mailbox and left their home to the bank. They banged up their credit score but bought another house by the early 90s.