Forum Post: Stop Supporting the 1%-Don't pay your mortgage
Posted 12 years ago on Nov. 19, 2011, 12:56 p.m. EST by bboyNY98
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Any one who has a mortgage is helping support Wall Street and the 1% by continuing to make payments. We ALL have to stop paying the mortgage. http://dontpaythemortgage.weebly.com/index.html
When a (DECENT) grown man or woman gives their word, they must struggle to honor it.
Whether you're religious or not doesn't matter.
This is a simple truth.
YOU ARE SIMPLY WRONG.
Many people are honestly stuck in a toxic and terrible mortgage. They can never sell it, they can never pay it off. All they can do is continue to pay thousands of dollars in interest to the banks every month because somebody legally ripped them off. These are decent, hardworking, and honest people who should have been protected by the law. There is no shame in walking away from a bad mortgage.
I agree. These bankers knew the real estate bubble would burst. They knew but they continued to sell houses that they knew were going down in value.
Does that include a pact with the devil?
I disagree. The banks put together and sold these CDO's (Collateralized Debt Obligation) packages that were backed by subprime mortgages knowing that those taking out the mortgage would be unable to pay them. They sold these CDO's, knowing that eventually those investing in them would lose their shirts meanwhile earning billions selling them. And then these same banks created CDS's (Credit Default Swaps) in which they would make money when they CDO's (subprime mortgages) tanked. So they ended up making billions when people were unable to pay their mortgages. And they got the houses that the people lost too!
I do not believe that DECENT people are obligated to these INDECENT banks no matter what these DECENT people said or signed. These people had no idea what was going on behind the scenes and certainly no idea that their loss was the bank's gain.
Not a single one of these white collar criminals has been prosecutred for their fraud. It has been 4 years. OWS? You betcha!
All these things are true.
...and yet, they have nothing to do with YOU keeping YOUR WORD. These are problems/faults of others.
Should those struggling be helped? YES!
Should those who violated our trust be brought to justice? YES!
Should regulation and enforcement be changed to assure this does not happen again? YES!
NOW, what have you done to remedy these things?
NOTHING? I'm just guessing. I don't know you or anything about you, but really.... anyone reading knows the answer.
-PETITION YOUR REPRESENTATIVES -DEMAND ACTION -VOTE VOTE VOTE -MAKE KNOWN WHO YOU WILL OR WILL NOT VOTE FOR, and discuss with EVERYONE - as an educated voter
votesmart.org helps here, just one of many great resources
No one has any sort of legal or moral obligation to a criminal who scammed them.
The politicians are all in the pockets of the bankers. Not a one will do anything. You can vote them out of office and vote in the exact same type of politician. The system is rigged so only those with corporate dollars backing them can make it into office.
You should definitely SPEAK UP to your Representatives, and START WORKING with others to push forward Campaign Finance Reform.
I'm totally with you on that effort.
If someone was defrawded, there is legal recourse. Law is a messy thing though, it deals with FACTS, individual cases with individual FACTS.
These blanket statements, lumping all mortgage holders together are meaningless.
In my area, for the last 3 years of the housing bubble more than 60% of sales where as investor properties, not homes.
It's a mess, and people need help. They do NOT need to be encouraged to debace themselves, taking the UNCIVIL INACTION of withholding payment.
Hmmm... what you recommend sounds a lot like what DOES NOT happen in Washington. Are you an Aid? You sound like one.
Our politicians represent the corporations that put them in office. They are no longer responsive to the needs of the American people. The political system is broken. (A major issue of OWS.)
Not a single white collar criminal responsible for the real estate bubble fraud has been prosecuted. It has now been four years and many, many Americans are screaming for prosecutions and are ignored. (This is one of the main issues of OWS).
I sound like an attorney, because I am an attorney licensed to practice in New York State.
I don't believe you. You are not an attorney, maybe a legal aid... filing clerk.
I'm not saying that to be dismissive, just... well... an attorney would come up with something more empowering to advocate than what you propose. (an attorney who cares--they do exist, MANY EXIST)
John, attorneys do not necessarily or even generally advocate good things. Most work in jobs where they are little more than trained guns for hire. Behind most successful whilte collar criminals are law degrees -- either the criminal himself is an attorney or they has some very high paid attorneys enabling his crimes. The bankers that perpetrated the fraud on the American people have teams of very, very high paid attorneys working around the clock to protect their ill-gotten gains. Many politicians are attorneys as are many lobbyists. These people are working hand-in-hand against the American people who have had enough.
I graduated from Forham University School of Law in 1999. I was sworn in on October 30, 2000. My specialty is toxic torts -- asbestos defense litigation -- defending corporations against asbestos claims made mainly by construction workers who were genuinely injured on the job while working with and around asbestos mostly in the pre OSHA era (before 1970).
I am not a bankrupcy attorney; however, if I were I would be doing a lot more than just talking about walking away from mortgages, I would be actively participating in the process. As I am sure you can well imagine, bankruptcy attorneys are very, very busy these days. During hard economic times, bankruptcy law firms do very, very well.
If the bank "knew" the person taking out the loan could not pay it back, how come the borrower did not? Stupidity or ignorant must be the answer, but that does not relieve them from paying back the loan.
Well this is the issue. Those writting mortgages made a higher percentage if they got a sub-prime person signed up. So they sought out poor uneducated people who were no match for their smooth talk.
They must be prosecuted and the mortgages rewritten. There won't be prosecutions though because our politicians make lots of money on these guys.
They made a higher percentage because they were riskier loans. You need to make more interest because they are more likely to default. What they did was shady, but by no means illegal. Like the poster above you said, stupidity or ignorance cannot relieve people of their responsibilities. Anyone with a 3rd grade education can make a budget and with the internet you don't even need to be that smart.
Not higher loan percentages. Those giving out the loans make money on each loan they give out. If they gave out a sub-prime, they made more money than if they gave out a regular mortgage. The big money was made in bundling up these subprime mortgages into CDOs which were sold as investments.
Which is completely legal.
You can make money off of these mortgages yourself. Look at a company like Annaly Capital Management (ticker NLY). It pays a dividend on the order of 15% via things like mortgage backed securities. Anyone can own it and it certainly has a place in a well diversified portfolio.
There will always be smarter people taking advantage of those who are not as smart. It has gone on since the beginning of civilization and it will continue until the end. Rather than fighting it, people should try to be in the smart group, and not the less intelligent group.
What they did is not legal. I am an attorney. I know what I am talking about. Part of the problem with getting to the point of prosecuting these people is that most Americans cannot wrap their arms around complex financial deals. What occurred was the biggest ponzi scheme in the history of the world. And the bankers are laughing all the way to the bank. They walked away with billions. Americans are sleeping in the streets as a result of their scams.
And if they are so lucky to have paid off their home, Guess what- these poor folks who have had their retirement funds looted are no longer unable to afford to stay in the homes they worked so hard for..But wait there's more! A long comes a nice company who will give them a reverse mortgage..and in the end the home goes back into the big bank pool.
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I prefer to honor my obligation and am greatful for the opportunity to live in a house that I could not have otherwise bought without the bank loaning me the money.
Joe, you probably have a traditional mortgage where there are 2 parties -- you and the bank. If you fail to pay your mortgage it is bad news for both of you. This is a good thing because you both have "skin in the game" -- a need to make things work. If you get into trouble, your bank will work with you.
In 1999, the repeal of the Glass Steagle Act (enacted in 1933 after the Great Depression) changed the mortgage holder / banker relationship because it removed the separation that previously existed between investment banking which issued securities and commercial banks which accepted deposits. The deregulation also removed conflict of interest prohibitions between investment bankers serving as officers of commercial banks.
What this all means is that banks could now create financial products which it sold to investors. One such product is the CDO that bundled together a bunch of subprime mortgages. So now you have an many investors as a mortgage holders once the bank sells the investment. The bank is out of the picture. When you don't pay your mortgage -- the investor, not the bank, loses. The bank no longer has any skin in the game.
Then the bank, knowing that the subprime mortgages will fail, created another financial product called the CSD which they sold and made billions on once the subprime market tanked. The skin in the game that the banks had was that the mortgage-holder would not be able to pay. Only if the mortgage holder did NOT pay would the bank make money. So of course they gave mortgages out to those who couldn't pay. It was very lucrative to do so.
-- It is counter intuitive to imagine banks making money when mortgage-holders fail to pay their mortgages. This is because it never worked that way in the past.
That has nothing to do with your obligation to pay the mortgage. You still signed a HUD form as required and the monthly payment was clearly displayed in a LARGE typeface just above your signature.
What the government did was relax the rules for a credit score qualifying and the down payment amount. That was due to changes in the 1990s to the Community Reinvestment Act of 1977. It was a push to allow more folks buy homes. People bought homes they should not have. HOWEVER, they saw the monthly payment on the HUD form and signed it anyway.
Yes the Glass Steagle Act rule changes allowed brokers to bundle these up causing a larger problem for the insurance companies and deriviatives market however the person signing the mortgage bears some responsibility.
The banks were able to rig the system after spending millions lobbying to repeal Glass Steagle. Some banks WANTED the real estate market bubble (that they created) to burst so they could make money. This is wrong.
That is exactly how it is supposed to work; however, for many it no longer works that way because the mortgage holders were scammed into getting the mortgage -- convinced by greedy banksters that they should get something they could not afford, just so the banksters could make money.
I was shown a house that was bigger and my wife and I agreed to buy a house that we could keep if one of us lost our job. We said no thanks.
When you buy a house there is a standard HUD from that you sign. It is very clear what your monthly payment will be. By signing you agree to pay the amount each month.
Telling everyone to stop paying a mortgage that they agreed to pay is just plain wrong. There is something called honor which somehow has been lost in all of this.
Is it honorable for a bank to intentionally give a loan to a person they KNOW will never be able to repay it? Is it honorable for a bank to spend millions of dollars on marketing campains targeted at people they KNOW will not be able to pay the loans back? Is it honorable for a bank to make money when the borrower who they KNEW would default defaults?
Did you think the banks were honorable last November when as soon as they got the tax payer bailout, they started handing out million dollar bonuses and throwing million dollar Christmas parties? Remember that? They had no idea that this was not an honorable way to act.
And, no, it is not necessarily clear what your mortgage would be. These subprime borrowers were given variable rate mortgages. They started with affordable payments. Then their payments ballooned.
In the old days it was clear cut what one's obligations were. In this case, the banks perpetrated a fraud on the American people yet not a single banker has been prosecuted. This is why Americans are so angry. If you robbed a bank of $50, you would go to jail. It is a double standard. The banks broke the law.
When is scammed, it is honorable to walk away from the scam.
Joe, you want to believe that the world did not go crazy, but it did. It did go crazy. A money hungry elite class took over during the last 30 years while the American people shopped and slept. It is time to wake up and smell the pepper spray.
Variable rates have gone down every year for the past ten years. HUD forms are very clear. They are designed by the Federal Government to be clear.
The shadow banking system bundled up the mortgages. Yes that was wrong an these institution went down. Bear Strens and Lehman Brothers are gone.
Aside from that the Federal Government has offered restructuring of loans and lower rates. Interest rates are the lowest they have been in 50 years.
The problem I have is that you want to take all responsibility off the borrower. The post is asking for everyone to stop paying their mortgage. That is just wrong.
I am going to bow out now although I will read your rebuttal should you post one. Thank you for the interesting, intelligent and stimulating discussion. I honestly have enjoyed it.
Why don't you not pay your mortgage and see how far it gets you
Not paying the mortgage gets many people very far. If you are under water (the value of the house is worth less than what is owed on the mortgage), it makes economic sense to walk away. Some of those who walk away, do not actually walk away literally. They squat in their own homes saving even more by not having to pay rent.
And in a few years it all comes off your record, because the banks want to lend to you again!!! You are still a viable potential revenue stream for them and actually not a bad risk at all. Very few people go bankrupt twice. They know this.
Then do it and see how long you live comfortably on the street for a couple of years
Not paying your mortgage will not put you in the street. If the mortgage holder is under water they can rent a similar house for half the price and pocket the remainder. (There are cases where the bank that takes the house then turns around and rents it to the former owner.)
This is what millions of Americans are doing. Walking away from their mortgages. In Nevada 60% of mortgages are under water. In Arizona, the rate is 50%.
Why pay for something that has no value especially when the bankers who gave out the mortgage knew full well the the real estate bubble would burst? They bet on that fact and made billions through financial products like CDS's (credit default swaps). Many of these mortgage holders were targeted by the banks based on the fact that they would not be able to pay.
Btw, I do not have a mortgage. I rent.
Well very good for you. I'm currently living in LaLa Land where I pay in marshmallows.
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make them show you the note, mine couldn't, because of dirty fraud they were trying to pull, and now I have my deed
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If you make an agreement to purchase a property and use a mortgage, you need to live up to your agreement. Purchasing a home is a big deal and demands lots of research. It is also a risk; if you can't deal with the risk of your investment declining, then DON'T BUY A HOME.
No matter how much research anyone did, they could not have known what the bankers knew -- that the economy was tanking and that when it did, the bankers were going to make billions. How did they know the economy was going to tank? They were doing everything they could to make it happen -- creating a huge real estate bubble that they profited off of. It was / is the perfect scam.
I would beg to differ...in 2003 I was in the Navy and stationed in central CA. Everybody in my command was buying a house because there were so many being built in the area and you could get a loan for monthly payments at pretty much the housing allowance the military gives an E-5.
Not only were my co-workers but also higher ups in my chain of command were suggesting to buy a house "real estate is a good investment"...and you can say "hey even they were fooled" But I rented a house and noticed that in 6 months were I once lived on a street with a few house I now lived in a neighborhood. That alone made me uncomfortable...
So I did simple google searches on loan rates, real estate practices and ended up finding many economists wondering if there was or is going to be a bubble...the fact that Greenspan had to RE-ASSURE the Joint Economic Committee that there wasn't, made me more uncomfortable...
There were other factors include on why I didn't buy one....but the whole thinking of "if it's too good to be true" weighed heavily on my decision. I was 23, no college education, and used simple google to figure out that I couldn't afford to own a house, nor was it going to be a solid investment.
It's the same when you buy a car...the dealer will try to sell you on the monthly payment "how much can you afford a month?" without mentioning insurance or maintenance costs...I applied the same thinking to houses...and why do we trust realtors more than car salesmen????
You are different. I am a high-school drop out who ended up graduating from law school. I am different. That doesn't mean that those who fall for smooth talking scammers in bankers suits deserve what they got.
No they didn't, but the responsibility is shared....along with the politicians along the way pushing for it too. Not to mention realtors which was basically the 99% preying on itself.
And just like the policies and deregulation that led to abuse and the housing bubble, absolving people of debt from a bad decision they made, whether they were fooled or not can set a dangerous precedent, Just like there's greedy corporations and banks that won't learn take advantage of the bail outs, there's greedy individuals who will do the same, might not be the majority but it's not a small enough that it won't have an impact.
So how come the banks got bailed out? They should have been allowed to fail just like everyone else. There was no shared responsibility. The people bailed out the banks.
I meant shared responsibility as in blame.
The bail out set a bad example and they should have been allowed to fail. And some didn't learn from it...there they were with their hands out for another . People will do the same thing. 2 wrongs don't make a right and I know a lot of people didn't deserve it or could have known that years later they were going to be upside down on their house. However how are you going to stop the people, banks, and realtors from taking advantage of a wide forgiveness of debt or payoff and repeating their mistake? I've seen people declare bankruptcy and 5 years later making the same horrible decisions...
And if enough people just start defaulting on their homes, stop paying their mortgages all the banks are going to do turn to the gov't again to bail em out...which it shouldn't, but it will.
No, the banks don't hold the mortgages. That's how it used to work. They bundled up the sub-prime mortgages and sold them as a financial product (CDOs) to investors. Many 401k investors bought these CDOs. So it turns out that if these people are unable or unwilling to pay, the one who will suffer are those with 401ks -- regular Americans.
We now live in a strange world. Those in power write the rules. They write them so they can take advantage of people. This is why the wealthy pay 15% on their income and the middle class pays 33%. The wealthy wrote the laws and they own Congress. Meanwhile Congress wrote a law allowing themselves to trade using insider information. They come out of Congress as very, very wealthy people.
It doesn't make any sense and it flies in the face of the sense of fairness we were all raised to believe existed.
The banks targeted (sought out) people who could not afford a mortgage and convinced them that they could pay one knowing full well that they would not be able to pay. At the same time the banks created SDS's so that when they defaulted on their payments, the banks made billions. It was a banking scam. The people lost their shirts and the CEO's laughed all the way to the bank.
many investors "shorted" mortgages and made lots of money. however most sold mortgages to the financially unsophisticted and lost lots of money. I am not going to pay for your inability to find what you think is a position suitable for you. Not everyone starts at the top. I continue to point out that there are finacial alternatives such as peer to peer lending, credit unions, co-ops, and your decision to not participate in what you think is a corrupt power. I am not going to give you my hard earned capital just so you sleep in a privately owned piece of property, and complain because you are not sucessful. Failure is a great learning tool. There are alternatives. Pardon my trite statement-when the going gets tough the tough get going. You can do it !
Would you give your hard-earned money to millionaire bankers who tanked the economy by betting on the crash of the real estate bubble? That is exactly what the American people did. This is not capitalism.
Mortgage payments goto more than just "millionaire bankers". They goto the people who clean their offices, manage their buildings, staff their Finance, HR, IT, Legal, Customer Service etc. departments. There is a long food chain who uses the money in my mortgage payment.
We don't need to live on crumbs that fraudsters throw us. We cannot afford to support those billionaire leeches. Toss them in jail.
The tough have gotten going. That is what OWS is all about. Tough people working hard to change America for the better. Not an easy task at all and one that is just beginning. The system is broken. Unbreaking it is a big, big job.
If the 99% figure you have repeated ad nauseaum is anywhere correct change should be real easy.
Change will be very, very difficult. The 1% who control the world are not going to let go of any of their power (and the wealth that comes with it) without a big fight.
The lobbyists are already submitting proposals for the class war. On 11/24, the American Bankers Association received a proposal from Washington lobbyists that they already employ -- CLG&C (Clark, Lytle, Geduldig and Cranford) -- to lobby for them to fight OWS. They want $850,000 to start work.
Think the banksters are going to pay it? I do. And they will pay a lot more.
(A copy of the memo was sent to MSNBC News.)
Unless I am mistaken, there is no mention of 99% anywhere in any of these posts by any one except in yours. Maybe you accidentally replied to the wrong thread. I have done that on facebook.
While that did happen in some cases, it did not happen in MANY other cases. My mortgage is fine as well as many, many, many of my friends and neighbors. People have to realize the gravity of the investment they are getting into. In general, mortgages are not banking scams. You are exaggerating. Yes, there were many people who were rooked, but there were also many who were not rooked.
All those with any kind of mortgages whose houses lost value were rooked. The bankers created a housing bubble intentionally. They knew this.
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The whole idea that people should be held responsible for their mortgages rests on the ethical conduct of the lender - Period. I think, if we could convice a substancial number of mortgage holders to coordinately not pay their mortgages, and also credit cards, based on the unethical practices of lenders, we would see those same lenders behind bars in no time flat.
We must not be afraid to excercize that kind of pressure. Indeed, if we aren't willing to excercize that kind of pressure non violent tactics are unlikely to bare fruit. Non violence does not imply cowardice or ineffectiveness. In order to work, it takes a radical commitment to resistance based on ethical principals, and the courage to make the decisions that are truely effective in non violent ways. I think this is a VERY good idea! It has the potential to produce sweeping reform, rapidly, and at very little cost in struggle and conflict.
This is getting comical. Lets not pay all our other bills, too! No wonder the economy sucks, people are STEALING. You dont pay your bills you STEAL OUR JOBS! Most people on this website do not understand basic economics.
The bankers created a housing bubble and because of the bubble, they created, the houses that people bought are no longer worth anything near what they were worth when they purchased them. It was a planned scam.
Yeah but be prepared to move.
You'll get foreclosed on and they'll just sell it to someone else.
There are many places in the U.S. where there are neighborhoods that consist of 50% vacant houses. There is such a glut of foreclosed homes, that the bank that foreclosed on them has little chance to sell one. No one is buying.
That's some twisted logic. Pay your debts liberal!
Interesting idea. I believe that many Americans should reconsider getting a mortgage to start with even if they can afford it. Renting is so much cheaper and owning a house knocks the owner out of so many government benefits including health insurance -- benefits that must be paid for with your own tax dollars.
i have health insurance and i own my house. Your statement is incorrect.
Are you saying that you have free health insurance because of low income? What state / city are you in?
Poor people who own their houses are not eligible for many governement benefits that the poor who rent are eligible for.
An example is the right to representation in a criminal court of law. If your income is less than $28,000 a free lawyer is provided. If you own a house and your income is $0, you are not entitled to an attorney.
So we can be homeless like you?? No, thanks.
I'm in. This is something I posted early on as well. Just make sure if you do it, that it is done en masse. If only a few people do it, they will lose their homes, but if everyone does it, what are they going to do? They can't get us all. I think it is truly a way to peacefully protest without any risk of anyone getting hurt, and everyone can be involved, whereas only some can be part of a physical protest. How do we move forward? How do we organize?
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I can only assume that you posted this because you don't have a mortgage.
I bought a house so that my family might escape the elements. And now you are telling me I am not entitled to that?
WTF are YOU?
PS: Get a job!
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Millions of Americans already started that a couple of years ago.
True. People who walked away once they were under water did just that.