In this miserable business of falling prices on homes last year, the crisis that set off the entire economic recession, the papers wrote constantly about how the banks had made home loans to people who could not afford the payments. People who had tried hard and paid off their monthly home payment obligations, lost everything they had put into it when they had to default because of the economic climate, and a number of other reasons. In general, the sense the media tried to bring off was that defaulting on payment and losing your home was about the worst possible that could happen to anyone. But there is a new trend here. People are actually making it their plan to stop paying for their homes, and are planning on losing them. They do this when they could well afford to retain their homes by continuing to pay. Why, there have been nearly a million homes that people have lost this year alone, in a way they're not sorry for. There are scholars out there now blogging about how this kind of responsibility puts the very American way in jeopardy. How could people in good conscience just enjoy their money going shopping or going on vacations now and not mind losing their homes?
Well you could say, that they take their example from all the big-time financial companies out there that default in just the same kind of planned strategic way. The financial major Morgan Stanley for example, just announced a couple of months ago that it had proper healthy capital worth something in excess of $200 billion. When its managers discovered they were paying a lot of money each month on the loans they held for a bunch of overpriced offices they bought in California a couple of years ago at the top of the market, they thought they would just call it a bad investment, and give up the property, rather than continue to pay back good money for an overpriced asset. It doesn't happen just for home loans on real estate loans either; large companies like Morgan Stanley, easily, almost casually, default on bonds they sell. If they happened to sell a bond at a high interest rate at one time, because that was the going rate then, and if the rates fall later on, they don't want to be saddled with that kind of burden. Why not just send people home disappointed and broken, they wonder.
Walking away from paying the loan on an overpriced home is nothing surprising. This is how it should be done in a cutthroat capitalist economy such as this. The only thing that keeps more people from doing the same is that no one who grew up in the sensible and responsible 50s and 60s can quite believe that it could be right to do this - to default on home loans. The true American way today, as it has been for a quarter century now, as to not think of what is good for society; it is only to do what is good for the most profit. This is the American way that has forced the ordinary Joes and Janes of the country over a financial barrel. It certainly is time they began fighting back, giving as good as they got.
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