Tuesday, October 25, 2011

Default Isn't Greed

In response to the many who think defaulting on an underwater home is somehow immoral here's food for thought from the excellent Mark Stopa website (a Florida foreclosure attorney):

David Bornstein of the New York Times penned a nice article called When Lenders Won’t Listen. Here’s the part that really jumped off the page at me…

After describing the injustices experienced by several homeowners in their experiences with lenders, a competing view was presented:

There are those of us who were raised with the idea that if you make a bargain you keep it. If you say you will return something you have borrowed, whether it is a lawnmower from next door or a bank loan, then you do what you have said. … But then I was raised in a different America.

Unfortunately, I fear too many Americans, who remain unfamiliar with the foreclosure process, feel this way (presuming, of course, that position is from a homeowner and not a bank crony who is paid by the banks to sway public opinion by submitting such posts). Anyway, I loved the response of David Bornstein, the author of the article, who wrote:

Not all bargains are made in good faith, however. Borrowers and lenders, it turns out, did not share equal information in many cases. … It was predatory lending that decimated inner city neighborhoods — not anything that resembled fair deals. … [M]any homeowners across the nation did understand what they were signing even if they failed to appreciate the real risks. The difference was that the borrowers made their mistakes one house at a time, effectively as amateurs. The lenders made these mistakes as professionals, dealing with hundreds of thousands of borrowers, and they concealed the cumulative problem even as it was metastasizing. So now we have millions of homeowners who wouldn’t be in distress if not for the fact that they lost their jobs as a result of a recession that was precipitated by the very bankers who are now threatening to foreclose on them.

Wow. What a truly awesome way to describe the impetus for the problems we’re facing.

I urge all of you to forward that paragraph to your family, friends, and neighbors – unless, of course, you just want to forward this entire blog. ;) From the words of a New York Times columnist, let’s make everyone realize the banks are the bad actors in the foreclosure crisis. After all, the first step to a solution is recognizing the problem – and clearly the greed of the Wall Street Fat Cats was and is the problem.

Mark Stopa

www.stayinmyhome.com

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