topic Some in trouble save credit card, lose home in Credit in the News

Some in trouble save credit card, lose home

Anonymous — Sun, 23 Sep 2007 21:21:01 GMT

http://www.billingsgazette.net/articles/2007/09/23/news/business/48-creditcard.txt

...

"There's a widely held view that people will bail out of their houses to save their credit cards. Their credit cards are more important to them, apparently," Patten said. "It is amazing, but it's a sign of our times."
...

Re: Some in trouble save credit card, lose home

Anonymous — Mon, 24 Sep 2007 12:47:27 GMT

Unfortunately-
We have set up the system to encourage this.
This may be a trend that will snowball.

If you owe 20K-100K more on a house than it is worth, the payment is going to double, no one will re-fi you, people are going to have few choices:

Re: Some in trouble save credit card, lose home

Anonymous — Mon, 24 Sep 2007 23:47:05 GMT

Actually sounds like people have a lot of choices. Call the bank, do a deed in lieu, and get another mortgage in a couple of years. No fuss, no muss.

For me, that likely ain't gonna work. Short of some kind of Second Depression with 25% unemployment, I don't foresee the Puget Sound housing market "collapsing". 5%, 10%, maybe a 15% drop, but that's about it. And I fully expect the reverse to continue for some time with periodic plateaus.

For me, in this market, I'll be so priced outta another house should such a thing ever befall me, I'll let the CCs go and keep the house.

Re: Some in trouble save credit card, lose home

Anonymous — Wed, 26 Sep 2007 22:26:34 GMT

The problem is that the government keeps making noises like its going to bail out the banks and homeowners.

The government needs to inform the mortgage industry and homeowners alike that this is a natural market correction and no federal bailout will occur. Banks would then realize that they are going to take a loss and they would have an incentive to work with borrowers rather than just throwing them out and waiting for Uncle Sam to make up the loss.