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Author Topic: how is the economy effecting you?  (Read 23300 times)

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Fordman

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Re: how is the economy effecting you?
« Reply #40 on: August 10, 2010, 11:42:59 pm »
Picking up and moving isnt always the answer and not really the easiest either. Moving to another city and leaving behind your home isnt a 1 day thought process and poof its done.

I have to drive almost 300 miles from Cincinnati, Ohio to Dearborn, Michigan to work each week. It was the only work Ford had for me at the time. In Cincy, I have my home, where the market is really depressed right now, and no sale of my home is imminent. Several homes in my neighborhood are up for sale and at 40% less than market value and no one is buying and not so much a look-see.

As for those that complain about those on unemployment benefits, does it make sense to drive 75 miles for a minimum wage job, just to eat any wages up with fuel cost, wear and tear on your vehicle? After you put the time in for driving and fuel cost, you may have enough left over to maybe but groceries but where is the rent going to come from? I know, work 2-3 jobs if need be, but 75 miles one way to work, then 75 miles back home, then maybe 20 miles to the next job, your killing yourself with miles and fuel. Cheaper to stay home!

Fordman

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Re: how is the economy effecting you?
« Reply #41 on: August 11, 2010, 04:16:28 am »
it might not be the politically correct respond that pleases everyone...
but the topic is how is the economy effecting "YOU"...
so, he is saying how it is affecting him, and how he wants things...

I still have a job, but no raise this year....
I have no debt, so my life style is not that much affected.
But budget is tighter, as salary stays the same, but spending on all directions goes up...

also, my stock portfolio is whacked hard... cos I hold the bad stocks...
although that has no immediate effect...
but it does hurt mentally, and my retirement savings are impacted....
well, you can say "luckily".... I still have time...
or from another point of view... I still have to work many many years....
dont really see the light at the end of the tunnel yet....
lol...


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Re: how is the economy effecting you?
« Reply #42 on: August 11, 2010, 04:17:30 am »
Sell all your hard assets like vehicles and land and invest in something with no intrinsic value? (gold) 

That's the worst financial advice I've read on these forums.


 :dizzy:



He suggests that because gold (but especially silver) is supposed to be set to increase dramatically in value in the coming years...


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Re: how is the economy effecting you?
« Reply #43 on: August 11, 2010, 05:02:28 am »
Wow...
There's two guys here
who should take all their bragging money
and buy a soul.

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Re: how is the economy effecting you?
« Reply #44 on: August 11, 2010, 10:29:59 am »

There are two guys here
who should take bragging money
and go buy a soul.

Fixt.
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Re: how is the economy effecting you?
« Reply #45 on: August 11, 2010, 10:37:50 am »
The wife has been taking our assets out of stocks and bonds and buying rental real estate. We picked up three properties at the end of '08/start of '09. We're closing on another property tomorrow and we hope to get a couple more soon.

The wife has never, ever made a mistake choosing real estate, and we've both made plenty of mistakes in the stock market, so I trust her completely and I think this asset shift is the smart thing to do. We've got one kid in college and one going next year, so we'll need the cash flow.

Although real estate in Texas did go down over the past couple of years, it didn't go down nearly as bad as most states. So there are bargains to be had, but we still have to look carefully.
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Re: how is the economy effecting you?
« Reply #46 on: August 11, 2010, 11:26:21 am »
He suggests that because gold (but especially silver) is supposed to be set to increase dramatically in value in the coming years...
Again??   It was under $900 usd just over a year ago. Now its around $1200.

NO MORE!!

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Re: how is the economy effecting you?
« Reply #47 on: August 11, 2010, 11:37:25 am »
When I started my current job I was enjoying 10-12% raises each and every year until the last two years when the raises have been right around 6%.  So I cant really complain too much but I would prefer to back around the 10-12% raise range  ;D.

My wife and I are currently selling our home as well.....all for the sake of a better school district.  We have a contingency contract on our house currently in which we stand to make about $4K after paying realtor fees.  So assuming we actually sell our house under this current contract we feel fortunate we get what we had in it with a small bit of padding.  We will be doing our part to stimulate the economy by building another larger, more expensive home.

Most of my wealth per se is in my home, I dont dabble in personal online trading because quite frankly I dont have the time to adquately study the markets and I dont know many people who really are making any money at it.  I contribute 10% of our income to retirement accounts, have an ample enough savings account to get us by for a short time in the case me or my wife loses our jobs (but in reality both are pretty secure) and we also fund a 529 plan for our daughters college tuition.

I also do my best to stimulate the local and online coin-op industry  :cheers:
« Last Edit: August 11, 2010, 11:42:01 am by Flake »

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Re: how is the economy effecting you?
« Reply #48 on: August 11, 2010, 02:13:24 pm »
I work in an industry that hasn't really been affected by the downturn and in a region that hasn't noticeably slowed down. My wife and I live well within our means and in the event that we both suddenly couldn't work, we've got enough socked away to meet our needs for a year or so.

A few of my friends went through periods of unemployment, though the duration was tied directly to their expectations. Those that realized work was work were back in a job within weeks; those that held out for an 'ideal position' went unemployed rather longer.

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Re: how is the economy effecting you?
« Reply #49 on: August 11, 2010, 02:23:53 pm »
OK so you cannot buy gold & silver, but you want to make some cash without getting hurt, right?

The US economy is looking to double dip.  A good bet it's going to dive into the shallow part of the abyss.

Just like when you are in Vegas and you see a lucky fellow raking the cash in on the craps table you just ride his coat tails.  Much to some amusement and get out.

Eh?  Still with me?  OK.

Buy Sterling.  As the UK government is shoring their economy up, the exchange rates are following suit.  Now I know you guys are not Warren Buffet, but you can still make out when the USD->GBP bottoms out at 2.10.  It has to get to that to take commission into consideration.  How do I know that?  History always repeats itself.  Not much, but it is a nice gain especially at 100K.

Just watch out for Uncle Sam and the ATF.  ;D

What was Warren Buffet doing prior to the bubble bursting?
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Re: how is the economy effecting you?
« Reply #50 on: August 11, 2010, 03:34:54 pm »
With the spare cash invested in commodities, I can make money by paying those around me less than they are worth.  Because I can do it.  Tradesmen, builders and even coders are all not exempt and have to bid on any work that I need to contract out.  I also pay 90 days.  I can do it,  as do many others.

Charming. If it's in your nature to behave like a --cream-filled twinkie-- then so be it. But do you really need to brag about it?
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Re: how is the economy effecting you?
« Reply #51 on: August 12, 2010, 06:42:52 am »
He suggests that because gold (but especially silver) is supposed to be set to increase dramatically in value in the coming years...
Again??   It was under $900 usd just over a year ago. Now its around $1200.



Silver especially. Word is, we are just about done with what we can easily get out of the ground. But silver is used a lot in industry. Therefore the value is set to soar. Of course that's not necessarily going to happen. For instance, maybe there'll be some huge new discoveries of silver reserves. Or maybe some other more common material will be discovered to be a viable alternative...


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javeryh

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Re: how is the economy effecting you?
« Reply #52 on: August 12, 2010, 09:47:13 am »
The depressing thing about all of this is that people are just going to get bailed out.  I save, spend responsibly and I have no debt other than my mortgage (which is pretty reasonable).  Everyone around me works less, spends more and just doesn't care.  I'll be the idiot paying full tuition for my kids to go to college while everyone else gets financial aid and BS scholarships.  A guy I know just walked away from his house.  It was underwater so he just moved and there will be barely any repercussions.  I get angry thinking about it.

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Re: how is the economy effecting you?
« Reply #53 on: August 12, 2010, 12:01:08 pm »
Everyone around me works less, spends more and just doesn't care.

The problem now is that people who have jobs are working more, so more people are out of work and the people with money are spending less, so the money that is out there isn't being spread around.

The depressing thing about all of this is that people are just going to get bailed out.  I save, spend responsibly and I have no debt other than my mortgage (which is pretty reasonable). 

...

I get angry thinking about it.

You're just as guilty when it comes to being bailed out. 

You got your bail out when you bought your house at a good price and all the spending the government is doing to keep you employed.

Making/saving money is all about luck. 

You're lucky to have a job, you were lucky to buy a house at a good time.

Your friend and I are lucky that the economy is so in the toilet that laws are protecting us from our overpriced mortgages.



I might be able to sell my place and still make money, but if I can't I need to be behind 3 months before the bank will consider refinancing or allowing me to do a short sale.  My lawyer says it's better to stop paying now, because if I do have to do a short sale any money I pay the mortgage company now will just be lost.

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Re: how is the economy effecting you?
« Reply #54 on: August 12, 2010, 12:11:14 pm »
You're just as guilty when it comes to being bailed out. 

You got your bail out when you bought your house at a good price and all the spending the government is doing to keep you employed.

Making/saving money is all about luck. 

You're lucky to have a job, you were lucky to buy a house at a good time.

That is the most ridiculous nonsense I have ever heard and a complete abdication of personal responsibility.

I have the job that I do because I made that happen.

I bought my house and didn't end up underwater with my mortgage because I did the math.

I totally understand that the economy has had adverse effects and put people in unfortunate circumstances that they did not forsee and could not avoid, but that definitely doesn't mean that people who have been responsible and prepared and work hard are just lucky.

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Re: how is the economy effecting you?
« Reply #55 on: August 12, 2010, 12:33:32 pm »
I completely agree with CheffoJeffo.

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Re: how is the economy effecting you?
« Reply #56 on: August 12, 2010, 12:39:52 pm »
That's because, as saint says, I'm right.  >:D

FWIW, I have had my job yanked out from under me in the past, right when my wife was about to deliver twins and we were trying to close on a new house. I had expensive new responsibilities and had to secure a mortgage with no job and no income. I was fortunate to be able to make it work, but the only role luck played was in losing that job.

Chance, in either direction, favours the prepared.
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Re: how is the economy effecting you?
« Reply #57 on: August 12, 2010, 01:39:02 pm »
BTW you can't just walk away from a house and rely on the foreclosure to wash your hands of it.  You owe the bank a certain amount of money.  If the bank forecloses and sells your condo for less than you owe them you still haven't fulfilled your end of the contract and you are liable for any deficiency.  Bankruptcy can erase the debt, but the trustee can come after your assets (including your house in most states).
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Re: how is the economy effecting you?
« Reply #58 on: August 12, 2010, 01:52:02 pm »
No, if employers could pay whatever they wanted, most of us would be 'serfs' living from day to day.

Not sure if I agree.  I'd like to think there'd be a magic number where labor and management meet in the middle.
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Re: how is the economy effecting you?
« Reply #59 on: August 12, 2010, 01:53:30 pm »
No, if employers could pay whatever they wanted, most of us would be 'serfs' living from day to day.

Not sure if I agree.  I'd like to think there'd be a magic number where labor and management meet in the middle.

i don't think unions would exist if that were the case
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Re: how is the economy effecting you?
« Reply #60 on: August 12, 2010, 01:54:20 pm »
I'd like to think there'd be a magic number where labor and management meet in the middle.

I'd like to think that unicorns and Jesus are real.
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Re: how is the economy effecting you?
« Reply #61 on: August 12, 2010, 01:58:02 pm »
I'd like to think there'd be a magic number where labor and management meet in the middle.

I'd like to think that unicorns and Jesus are real.

The number may not be what you like, and it may not truly be in the middle, but its a number.  Enough people walk away, the number goes up.  Too many people in the field, the number goes down.

Now, go catch me a unicorn.  Their horns are worth real money.
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Re: how is the economy effecting you?
« Reply #62 on: August 12, 2010, 02:00:59 pm »
I'm probably naive, but look at the big picture.  Don't just worry about 'me.'

Everyone across the board in labor takes a 50% pay cut.  All of a sudden, people can't pay for things.  No one buys.  Prices come down.  People can afford things again.

On a big enough scale, works, no?  It hurts, but it works.

I realize I'm not taking into account the high rollers.  Where do they fit in?
But wasn't it fun to think you won the lottery, just for a second there???

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Re: how is the economy effecting you?
« Reply #63 on: August 12, 2010, 02:21:42 pm »
Quote
No, if employers could pay whatever they wanted, most of us would be 'serfs' living...

Read "Economics in one Lesson" by Henry Hazlitt. It's from the 40s so it's completely devoid of any current political commentary.

Bear in mind too, a very small percentage of workers actually make minimum wage. It disproprtionally affects teens. Overall youth unemployment is currently at 25%, and a whopping 45% for black youths. Youth unemployment has been going down for years and has begun to rise since the increases in minimum wage since 2007. The market for labor works exactly like any other market; as costs go up, demand goes down. And as noted earlier, anyone who is not worth minimum wage to an employer simply won't get hired. [Stats taken from National Review, Aug 16th, 2010]

The same goes by the way for union wages; they guarantee anyone who isn't worth the required union wage won't be able to do that line of work.

I also have to add that I agree 100% with CheffoJeffo. Either you have the self-respect to make your own way in life or you should 'crouch down and lick the hands which feed you,' to quote Sam Adams. The whole 'woe is me' attitude is guaranteed to get you nowhere.

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« Last Edit: August 12, 2010, 02:28:25 pm by Endaar »

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Re: how is the economy effecting you?
« Reply #64 on: August 12, 2010, 02:23:53 pm »
Labor is a supply and demand market like anything else. Unfortunately for the workers, the supply of workers is larger than the demand. There would be a magic number where the meet, but it'd be pretty low.

I'd like to think there'd be a magic number where labor and management meet in the middle.

I'd like to think that unicorns and Jesus are real.
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Re: how is the economy effecting you?
« Reply #65 on: August 12, 2010, 04:54:08 pm »
If your job is making license plates.
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Re: how is the economy effecting you?
« Reply #66 on: August 12, 2010, 07:21:48 pm »
Or teaching kindergarten.

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Re: how is the economy effecting you?
« Reply #67 on: August 13, 2010, 09:53:23 am »
You're just as guilty when it comes to being bailed out. 

You got your bail out when you bought your house at a good price and all the spending the government is doing to keep you employed.

Making/saving money is all about luck. 

You're lucky to have a job, you were lucky to buy a house at a good time.

That is the most ridiculous nonsense I have ever heard and a complete abdication of personal responsibility.

I have the job that I do because I made that happen.

I bought my house and didn't end up underwater with my mortgage because I did the math.

I totally understand that the economy has had adverse effects and put people in unfortunate circumstances that they did not forsee and could not avoid, but that definitely doesn't mean that people who have been responsible and prepared and work hard are just lucky.



Amen.  I studied ---my bottom--- off to get a good job that I work VERY hard at.  When the bank offered us a $1,000,000 loan when we were house shopping we bought a house for less than 1/2 that amount.  I've got no debt because I don't buy things I can't afford.  I know my limits and I am prepared for the future in case I do lose my job.  There's really no luck involved. 

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Re: how is the economy effecting you?
« Reply #68 on: August 13, 2010, 10:29:06 am »
Until you find yourself in a horrible accident,
or get some debilitating disease.
There's luck in everything.
Even the super rich can only buy so many organs
before they have to take the dirt nap.

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Re: how is the economy effecting you?
« Reply #69 on: August 13, 2010, 10:55:16 am »
Until you find yourself in a horrible accident,
or get some debilitating disease.
There's luck in everything.
Even the super rich can only buy so many organs
before they have to take the dirt nap.


Well, yeah but that has nothing to do with the economy and how it is affecting me.

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Re: how is the economy effecting you?
« Reply #70 on: August 13, 2010, 11:10:11 am »
And it certainly wouldn't make you lucky if you had previously purchased life or critical illness insurance ...
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Re: how is the economy effecting you?
« Reply #71 on: August 13, 2010, 11:23:44 am »
BTW you can't just walk away from a house and rely on the foreclosure to wash your hands of it.  You owe the bank a certain amount of money. 

BTW: A mortgage isn’t like a credit card or tuition loan. Leaving a house for the bank is like leaving a watch at the pawn shop, the bank gets to keep the house.  All you owe the bank is your house.

If you walk away from a home you're still responsible for the utilities, tax and association fees(if it's a condo or town house).

...and in Illinois after a condo is bought the new owner of the condo is responsible for any past due association fees.  Which is why you need to know what you're doing before you buy a foreclosed condo/townhouse. The lawyer told me many people buy condos and days after the closing the association puts a lean on the new owners for the last owner's association fees.

I still hope to sell for a profit, but I need to be 3 months behind if I want to make a deal with the bank for a short sale.

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Re: how is the economy effecting you?
« Reply #72 on: August 13, 2010, 12:17:26 pm »
BTW you can't just walk away from a house and rely on the foreclosure to wash your hands of it.  You owe the bank a certain amount of money. 

BTW: A mortgage isn’t like a credit card or tuition loan. Leaving a house for the bank is like leaving a watch at the pawn shop, the bank gets to keep the house.  All you owe the bank is your house.

If you walk away from a home you're still responsible for the utilities, tax and association fees(if it's a condo or town house).
Yup, the collateral for your loan is the house, so if you can't pay the loan, then they take your house to settle your loan and you no longer owe the bank anything.  Of course once they re-sell the house, you will be responsible for paying the taxes on that sale, so you'll still owe the government money.

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Re: how is the economy effecting you?
« Reply #73 on: August 13, 2010, 01:00:53 pm »
You're wrong.  If you borrow $400,000 from the bank you owe them $400,000 plus interest.  Your loan is secured by your house (or any other security you give them), but that is just to reduce the bank's risk so they'll give you the loan.  You owe them $400,000 period, because that's the amount of money they gave you.  If the Bank forecloses and only gets $200k for the house (so long as they weren't negligent in conducting the sale) you still owe the bank the difference between what the house brought and what you owe them.  Think about it . . . of course this is the way it works.  People get mortgages all the time for way more than the house is worth so they can buy furniture and appliances or put in a swimming pool or renovate.  What would stop you from just walking away with the extra couple hundred thousand and say, "Sorry bank . . . sell the house."

Now . . . banks may frequently ignore the deficiency since it will cost them more money to pursue and since you've already shown that you can't pay for the mortgage they'd likely not get anything, but that doesn't mean that taking your house settles the loan.  It doesn't.  You owe the deficiency and if the house sells for more than your mortgage the bank owes you any surplus.
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Re: how is the economy effecting you?
« Reply #74 on: August 13, 2010, 01:07:36 pm »
Was just going to explain that but shmokes beat me to it. Same thing goes for an auto loan - a repo does not discharge the debt.

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Re: how is the economy effecting you?
« Reply #75 on: August 13, 2010, 01:24:34 pm »
+1 to shmokes.  I can't believe people actually think otherwise.

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Re: how is the economy effecting you?
« Reply #76 on: August 13, 2010, 01:27:22 pm »
You're wrong.  If you borrow $400,000 from the bank you owe them $400,000 plus interest.  Your loan is secured by your house (or any other security you give them), but that is just to reduce the bank's risk so they'll give you the loan.  You owe them $400,000 period, because that's the amount of money they gave you.  If the Bank forecloses and only gets $200k for the house (so long as they weren't negligent in conducting the sale) you still owe the bank the difference between what the house brought and what you owe them.  Think about it . . . of course this is the way it works.  People get mortgages all the time for way more than the house is worth so they can buy furniture and appliances or put in a swimming pool or renovate.  What would stop you from just walking away with the extra couple hundred thousand and say, "Sorry bank . . . sell the house."

Now . . . banks may frequently ignore the deficiency since it will cost them more money to pursue and since you've already shown that you can't pay for the mortgage they'd likely not get anything, but that doesn't mean that taking your house settles the loan.  It doesn't.  You owe the deficiency and if the house sells for more than your mortgage the bank owes you any surplus.
Strange, I guess it must be very frequent that they ignore the debt because I know a few people who have foreclosed (one foreclosed on three houses within one year (he was renting them before, not buying then foreclosing)) and all they had to worry about was the taxes.

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Re: how is the economy effecting you?
« Reply #77 on: August 13, 2010, 01:54:33 pm »
Terms on mortgages vary.  There exist both "recourse" and "non-recourse" loans.  This applies to loans other than mortgages, but it seems rare to see anything but a mortgage of the "non-recourse" type.  Note that these types are general descriptions, and these terms are not always used in the loan documentation.  The loan documentation will spell out specific terms that people then lump into one of these categories based upon the practical implications of the terms.

Older first mortgages were often of the "non-recourse" type.  In this case, the bank's sole remedy for you failing to pay is that they can either hassle you until you do or take the collateral (the property backing the loan).  The "non-recourse" part says that once they've exhausted that option of taking the property, they have no further recourse.  They get the property, but they're done.

"Recourse" loans allow further recourse beyond seizing the collateral that backed the loan.  2nd (and 3rd, etc.) mortgages, auto/boat/aircraft loans, and personal loans are generally of this type.  These types of terms allow the lender to take further action above and beyond that specified in the loan to satisfy the debt.  These actions could include seizing additional property, garnishment of wages, etc.  A court would have to approve such actions, but it's not too hard to get a wage garnishment order if you can demonstrate an outstanding debt whose terms permit such actions.  Lots of newer 1st mortgages these days, especially "work out" mortgages that are issued when people call behind on an existing one, are also of the "recourse" type.  Most "subprime" and "non-traditional" (e.g. ARM, interest only, balloon payment etc.) 1st mortgages issued in the past were also of this type.

I don't have the figure to say which are more common.  I'd suspect that most of the defaults and resulting foreclosures these days are from newer loans as well as non-traditional loans, so they're likely to permit recourse beyond seizing the collateral.  I think that some states also place regulations that are inconsistent with other states upon mortgages.  For example, in some states, 1st mortgages with recourse terms may be prohibited while, in other states, non-recourse terms may not be allowed.


On a semi-related subject, if you ever settle a debt for less than the amount owed, make sure you pay it by some means where you have a duplicate of the payment (e.g. carbon copy of a cashier's check), and write the words "PAID IN FULL WITHOUT FURTHER RECOURSE" on the payment.  Once that payment is accepted, the lender can no longer come after you.  If you just have some side agreement, they can easily accept your payment then deny the agreement exists (leaving you to attempt to prove it does - good luck) leaving you on the hook for the rest of the debt.  I also recommend using USPS registered mail with restricted delivery and return receipt.  That makes it REALLY hard for them to deny they got the payment, and it can also bring "mail fraud" up if they do something really dumb like cash the check but not credit you.  It'll cost you like $20 to mail it, but it's worth it for the protection.  You can save a few bucks with certified and get almost the same protection against denial of receipt, but registered offers greater protection against loss of the check.

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Re: how is the economy effecting you?
« Reply #78 on: August 13, 2010, 02:09:42 pm »
I've never bought a house, but I'm under the impression that a non-recourse loan is typically way overcollateralized where the property securing the debt is worth like twice as much as the loan.  There doesn't seem to be much business sense in handing out a non-recourse loan secured by property that is or likely will be worth significantly less than the amount owed.  I'm just going on gut here, but I'd be surprised to see many typical mortgages that were of the non-recourse variety.
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Re: how is the economy effecting you?
« Reply #79 on: August 13, 2010, 02:11:32 pm »
I've never bought a house, but I'm under the impression that a non-recourse loan is typically way overcollateralized where the property securing the debt is worth like twice as much as the loan.  There doesn't seem to be much business sense in handing out a non-recourse loan secured by property that is or likely will be worth significantly less than the amount owed.  I'm just going on gut here, but I'd be surprised to see many typical mortgages that were of the non-recourse variety.

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