Strategic default in the news

Strategic default is not funny.

But the video below from “The Daily Show” talks about how the Mortgage Bankers Association strategically defaulted on its own building, yet instructs everyone else to stay put.

Also interesting in today’s Wall Street Journal is “The Great Mortgage Mystery” that starts with this rather eye-opening lead:

The big question from the mortgage meltdown isn’t why so many distressed homeowners are defaulting on their loans. It’s why any of them are still making payments.”

The story also uses the term “zombie homeowners,” that is  borrowed from the Japanese “zombie banks,” to define underwater homeowners.

Read or browse the 150 plus comments to the WSJ story.  Because strategic default is such a volatile topic, the comments are as good, if not better than than story.

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Mortgage Bankers Association Strategic Default
www.thedailyshow.com
Daily Show Full Episodes Political Humor Rally to Restore Sanity
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2 thoughts on “Strategic default in the news

  1. I have a question for you. My wife and I are both on the mortgage, but only my wife is on the note. If our house goes into foreclosure, will my credit be affected? Also, if I buy another home in my name only, can the bank put a lien on my new house? And can they garnish my wages? Please advise. Thanks!

  2. Philip,

    In answer to your questions:

    1. If you are not on the note, just the mortgage, your credit will not be affected if the mortgage is foreclosed.
    2. If you buy a new home in your name, the lender could not file a lien against the new home.
    3. They could not garnish your wages because the judgment would be against your wife, not you.

    Thanks.

    Tom

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