Monthly Archives: March 2008

Mortgage Walkers

This entry was posted in Economics on by

Buried toward the bottom of a gloomy report on home foreclosures is this:

The threat of so-called “mortgage walkers,” or homeowners who can afford their payments but decide not to pay, also increases as home values depreciate and equity diminishes. Banks and credit-rating agencies already are seeing early evidence of this.

Banks should persue these folks aggressively!
Really, someone thinking of moving that is in this situation probably shouldn’t be moving unless their new employer has a great relocation package. Their creditors should make sure that the potential perps know that they will have to pay out lapsed payments and any shortfall in equity.
There were quite a few folks in this situation in the early to mid ’90s. During that time I was in a negative equity position for a number of years but time cures many ills and even in the current market I am substantially positive.

During that same period I spent a brief stint as a realtor and sold a neighbors house. As part of the transaction his corporate relocation folks had to pick up nearly $100,000 in negative equity. Those times were not pleasant and a lot of people simply had to stay put until market values turned up.

The obama Sunstein Knows

This entry was posted in Election 2008 obama on by

Some obama material contra to some of the stuff linked in this post.
Cass Sunstein, Professor of Law at the University of Chicago writes:

Not so long ago, the phone rang in my office. It was Barack Obama. For more than a decade, Obama was my colleague at the University of Chicago Law School.
He is also a friend. But since his election to the Senate, he does not exactly call every day.
On this occasion, he had an important topic to discuss: the controversy over President George W. Bush’s warrantless surveillance of international telephone calls between Americans and suspected terrorists. I had written a short essay suggesting that the surveillance might be lawful. Before taking a public position, Obama wanted to talk the problem through.
In the space of about 20 minutes, he and I investigated the legal details. He asked me to explore all sorts of issues: the President’s power as commander-in-chief, the Constitution’s protection against unreasonable searches and seizures, the Foreign Intelligence Surveillance Act, the Authorization for Use of Military Force and more.
Obama wanted to consider the best possible defence of what Bush had done. To every argument I made, he listened and offered a counter-argument. After the issue had been exhausted, Obama said that he thought the programme was illegal, but now had a better understanding of both sides. He thanked me for my time.
This was a pretty amazing conversation, not only because of Obama’s mastery of the legal details, but also because many prominent Democratic leaders had already blasted the Bush initiative as blatantly illegal. He did not want to take a public position until he had listened to, and explored, what might be said on the other side.

Sunstein has more to say…go read the rest…and, for my part, I find this a very positive recommendation.

It makes it clear to me that I’d much rather have a beer with obama than the mccain depicted here. It also makes clear to me that even though I’m likely to disagree with both of these guys on many issues with obama there is a small chance, remember he is a politician, that I might get a reasoned depiction of why he has taken a particular position.

But obama is still a liar.

WAMU: Never Mind the Losses Give’m Their Bonus

This entry was posted in Economics on by

We sure wouldn’t want 3000 Washington Mutual execs to feel short-changed for screwing up:

WaMu has revised its bonus plan for nearly 3,000 top executives so continuing damage from the subprime lending collapse won’t crimp their annual awards.
The struggling Seattle-based lender said in a regulatory filing Monday it will exclude the cost of soured real-estate loans and foreclosure expenses when it calculates net operating profit, the biggest component of executives’ 2008 bonuses.

Not only will they be excluding those real expenses but they want to make up for the losses on the back of their retail banking customers by including this new criteria in the bonus calculation:

Fees from retail banking — a new factor, weighted at 25 percent. Many banks including WaMu have been increasing fees for services such as ATM withdrawals by non-customers to compensate for losses in other areas.

These fees also include over-draft charges that hammer those account holders with the fewest resources.