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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: What if everyone stopped paying their mortgage? Posted by JK (the other JK) on May 31, 2010 at 7:41 PM In Reply to: Re: What if everyone stopped paying their mortgage? posted by Bob on May 31, 2010 at 2:22 PM : : Three of my recent clients: : : #1. Recently divorced female that is living in a "foremorely valued at" $1M house. She is not paying the mortgage, is collecting $1800 a month in unemployment, $2K a month in rent for the guest house and is doing contract under the table work for the movie industry to make another $3K a month. That's almost $8K a month in disposable income. What a country. : : #2. Single male purchased a "foremorely valued at" $500K home in Moreno Valley with a $450,000 mortgage. The property is now worth $150K. His mortgage including taxes, insurance and a ridiculously high interest rate of over 9% on the first and 13% on second, comes out to over $4K a month. If he chose to simply save the money he would spend on the mortgage, he'd have enough to buy the house cash within 4 years. : : #3. Guy has a $3.5M mortgage on an Ocean View home is having business problems. His mortgage is $20K a month. He hasn't paid in over 2.5years (is now >$500K in the hole). : : Now I'm starting to think, why the hell I'm I paying my mortgages?. What if everyone decides to take a holiday from the mortgage. We could all drive a Lambo and take trips to Fiji. : : Am I getting a warped view of the world because of our business or are you starting to see more and more people say "F it, I'm not paying the mortgage anymore"? : They might win a small battle but they will not win the war. With this mentality, true WEALTH will be much harder to obtain. I'm talking about large passive income streams and assets without debt. They should be trying to think about how to pay off their mortgages faster and own RE free and clear not how to avoid paying a generally small mortgage payment and thus ruining credit. The financial window to build critical mass is short and it is difficult to get there if you have to keep starting over. The mass of defaulting homeowners are thinking short term and are now not in position to take advantage of the bargain prices and other investments available to solid individuals with solid credit/financials. Why isn't there more focus on building finacial security for ones self anf their family not just a short term reduction in monthly payments. A different way for a underwater homeowner would be, negotiate a lower rate if possible, pay it down, pay it off. Solid general advice, but what about these three specific examples? None of them are in a position to pay their mortgage down. If they could go 3 - 5 years without paying the mortgage OR rent and truly saved the difference would they not be in a better financial position five years from now? Forget about the moral argument, I'm talking purely from a financial standpoint. Follow Ups: Re: What if everyone stopped paying their mortgage? LCH 1:22 PM, 06/01/10 (0) Post a Followup: Name : E-Mail : Subject : Comments: : : : Three of my recent clients: : : : #1. Recently divorced female that is living in a "foremorely valued at" $1M house. She is not paying the mortgage, is collecting $1800 a month in unemployment, $2K a month in rent for the guest house and is doing contract under the table work for the movie industry to make another $3K a month. That's almost $8K a month in disposable income. What a country. : : : #2. Single male purchased a "foremorely valued at" $500K home in Moreno Valley with a $450,000 mortgage. The property is now worth $150K. His mortgage including taxes, insurance and a ridiculously high interest rate of over 9% on the first and 13% on second, comes out to over $4K a month. If he chose to simply save the money he would spend on the mortgage, he'd have enough to buy the house cash within 4 years. : : : #3. Guy has a $3.5M mortgage on an Ocean View home is having business problems. His mortgage is $20K a month. He hasn't paid in over 2.5years (is now >$500K in the hole). : : : Now I'm starting to think, why the hell I'm I paying my mortgages?. What if everyone decides to take a holiday from the mortgage. We could all drive a Lambo and take trips to Fiji. : : : Am I getting a warped view of the world because of our business or are you starting to see more and more people say "F it, I'm not paying the mortgage anymore"? : : They might win a small battle but they will not win the war. With this mentality, true WEALTH will be much harder to obtain. I'm talking about large passive income streams and assets without debt. They should be trying to think about how to pay off their mortgages faster and own RE free and clear not how to avoid paying a generally small mortgage payment and thus ruining credit. The financial window to build critical mass is short and it is difficult to get there if you have to keep starting over. The mass of defaulting homeowners are thinking short term and are now not in position to take advantage of the bargain prices and other investments available to solid individuals with solid credit/financials. Why isn't there more focus on building finacial security for ones self anf their family not just a short term reduction in monthly payments. A different way for a underwater homeowner would be, negotiate a lower rate if possible, pay it down, pay it off. : Solid general advice, but what about these three specific examples? None of them are in a position to pay their mortgage down. If they could go 3 - 5 years without paying the mortgage OR rent and truly saved the difference would they not be in a better financial position five years from now? Forget about the moral argument, I'm talking purely from a financial standpoint. [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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