Saturday, October 16, 2010

A friend sent me a link to an article on a foreclosure in Maine that started the current examination of lender foreclosure practices--it provided an interesting review of the collateral issues ... you know, these are extraordinary times in the questioning of the basics of capitalism ... I mean that it works fine when everything is on the uptick, but the basic cohesion of society is called into question when there's a serious downturn ... if it was the best way, it should work well for the people whether things are trending up or down ... but we're seeing that it does not. GMAC is totally wrong in its practices, but it is fundamentally right that the debt hasn't been paid and there should be a penalty for that ... but then, who gave this person a 100% PLUS loan in the first place -- they did, and they did it because they made money off the deal even though the deal was rotten on the fundamentals ... under capitalism, the first principal was to make that money and devil take the hindmost (and anyway, there's money to be made in the foreclosure process also, so who cares about the human pain and social disruption that the whole thing results in.)

Obviously, this is a subject that comes up a lot at work, because growth management is focused on development which is supported by lending and depends on the overall economy ... and we're awash in people looking to make that dollar regardless of the social outcome ... there's no morality inherent in money, just in its generation and its collateral uses ... or, as the New Yorker's James Surowiecki says in the 9/27 column on inflation: "...the economy doesn't exist, in the end, to reward virtue and punish vice. It exists to maximize our well-being [as measured in dollars, obviously, not social cohesion], and currently, doing that may require helping the undeserving and irresponsible, if only because there are so many of them [and the undeserving means BOTH the banks and the debtors]."

There are people where I work, who make two or three times more than I do, who are walking away from their mortgages because they are under water ... or they are going into short sales (and, I suppose, looking to elude a deficiency judgment). I can remember when Jaron used to talk about us buying Mt. Mildew and I would point out that an asking price of $200,000 meant paying actually closer to $600,000 total over time, and how did he think non-career oriented ppl like us could make that kind of commitment and, oh by the way, did you realize that if you come up short at any point, you lose everything? I was having this same discussion with a friend a work, Matt, who is from PA where he owned a house that he sold in order to come down here to work ... we were talking about renting vs. owning, a conversation that is colored these days by the dimensions of the financial mess. You'd wonder why anyone would want to make that mortgage commitment now, when jobs are uncertain for so many people, even degreed professionals ... and you see how those considerations tear at the fabric of society.

Oh, and I have my absentee ballot in hand and will probably spend part of this day figuring out who / what to vote for ... Weird times.

Labels: , , , ,


Post a Comment

Subscribe to Post Comments [Atom]

<< Home