Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Homeowners in Foreclosure Find a Rent-Free Approach

nytimes.com

Post reply on HN
Print view View original

11–20 of 64 posts

Re: Homeowners in Foreclosure Find a Rent-Free Approach

#11

Post by MichaelSalib »

tptacek wrote: post #8
MichaelSalib wrote: post #7

Earlier quoted context omitted.

The article I linked to is not fiction. Do you have reason to believe that the attorney who wrote it was lying? And yes, I think the homeowners there pretty awful. But the banks didn't determine that they were awful before they acted in bad faith; they acted in bad faith from the get-go, for everyone, whether or not their actions merited such treatment. And from where I sit, it seems like the banks and servicers are…

It's not fiction. But it's McSweeney's. It wasn't edited for accuracy or logic or fact-checking or bias; it was edited to make it read well. I like McSweeney's probably almost as much as you do, but would hesitate to cite it in an argument about economics! Your other two grafs don't actually rebut anything I said. Yes. Banks bad. Very bad! Also: require Thomas to sit on hold to wait to talk to someone in Bangalore ab…

It wasn't edited for accuracy or logic or fact-checking or bias

In general, I do not expect main stream publications to be able to edit articles regarding economics. Journalists and editors are astonishingly ignorant of basic economics, to say nothing of statistics or law. There's a reason that economics professor Dean Baker keeps an entire blog devoted to correcting the idiocies and distortions found in traditional reporting (see http://www.cepr.net/index.php/beat-the-press/ ); it is the same reason that economics professor Brad Delong regularly lambastes major newspapers on his blog by chanting "why, oh why can't we have a better press corps?" (see http://delong.typepad.com/sdj/better_press_corps/ ). So the fact that this article didn't appear in the Washington Post (where I've read "fact-checked" articles which presumed that inflation does not exist) doesn't really trouble me. It is written by an attorney and officers of the court are generally subject to sanction if they misrepresent cases.

I like McSweeney's probably almost as much as you do

Um, I don't read McSweeny's; I read this article because it was linked from an economics/policy blog I respect.

Unfortunately: still not OK to defraud them.

I don't believe the behavior in question falls under fraud statutes.

This is surprising: generally we expect corporations to act in their best interest taking full advantage of their rights under the law, even if doing so violates the spirit of the law. How odd that we apply such different standards to individuals.

Re: Homeowners in Foreclosure Find a Rent-Free Approach

#12

Post by MichaelSalib »

MichaelSalib wrote: post #4
tjmaxal wrote: post #2

Didn't these people learn in grammar school that two wrongs don't make a right?

In economic terms, two wrongs can certainly make a right. In many cases, having these people move out would serve no purpose other than to destroy the houses' values as well as the values of the surrounding homes. People who stay in their homes prevent squatters from moving in and perform some maintenance. Banks often make economically foolish decisions regarding foreclosure for a whole host of reasons. Plus, after r…

I forgot that many people on HN can't distinguish between normative and positive claims, so let me clarify: I don't think this behavior is terribly ethical, but I do think it can produce more efficient economic outcomes. There are many of unethical acts that improve economic efficiency.

Re: Homeowners in Foreclosure Find a Rent-Free Approach

#13

Post by sethg »

icefox wrote: post #5

“We could pay the mortgage company way more than the house is worth and starve to death,” This implies that if the house was worth what they were paying that they would still starve to death and really they made a bad choice in buying the house in the first place. "But the couple also refinanced at the height of the market, taking out cash to buy a truck..." sigh...

For every unwise borrower there is an unwise lender. My sympathies are more with the borrower, since the lender, as the side that supposedly hired people with financial acumen, bears a majority of the responsibility for assessing risk.

Re: Homeowners in Foreclosure Find a Rent-Free Approach

#15

Post by gsmaverick »

sethg wrote: post #13
icefox wrote: post #5

“We could pay the mortgage company way more than the house is worth and starve to death,” This implies that if the house was worth what they were paying that they would still starve to death and really they made a bad choice in buying the house in the first place. "But the couple also refinanced at the height of the market, taking out cash to buy a truck..." sigh...

For every unwise borrower there is an unwise lender. My sympathies are more with the borrower, since the lender, as the side that supposedly hired people with financial acumen, bears a majority of the responsibility for assessing risk.

In this case the problem lies with the political pressure applied by both Bush and Clinton on Fannie Mae and Freddie Mac to continue giving out more mortgages.

Re: Homeowners in Foreclosure Find a Rent-Free Approach

#16

Post by [deleted] »

MichaelSalib wrote: post #11
tptacek wrote: post #8

Earlier quoted context omitted.

It's not fiction. But it's McSweeney's. It wasn't edited for accuracy or logic or fact-checking or bias; it was edited to make it read well. I like McSweeney's probably almost as much as you do, but would hesitate to cite it in an argument about economics! Your other two grafs don't actually rebut anything I said. Yes. Banks bad. Very bad! Also: require Thomas to sit on hold to wait to talk to someone in Bangalore ab…

It wasn't edited for accuracy or logic or fact-checking or bias In general, I do not expect main stream publications to be able to edit articles regarding economics. Journalists and editors are astonishingly ignorant of basic economics, to say nothing of statistics or law. There's a reason that economics professor Dean Baker keeps an entire blog devoted to correcting the idiocies and distortions found in traditional…

[deleted]

Re: Homeowners in Foreclosure Find a Rent-Free Approach

#17

Post by stellar678 »

tptacek wrote: post #3

What these people are doing is exactly equivalent to what tendentious tenants do to avoid eviction. We almost uniformly hold those tenants in contempt; they're perpetrating a fraud. The only difference here is that it's banks holding the loans, not independent landlords. I see how you could sympathize with a ruthless defaulting homeowner; after all, what else are they going to do? Are we really asking them to vacate…

I find it interesting that debt is always couched in moral terms for individuals, but business terms for corporations. Somehow it's immoral for individuals to work a system for their advantage, but it's standard operating procedure for a business.

Re: Homeowners in Foreclosure Find a Rent-Free Approach

#18

Post by MichaelSalib »

tptacek wrote: post #3

What these people are doing is exactly equivalent to what tendentious tenants do to avoid eviction. We almost uniformly hold those tenants in contempt; they're perpetrating a fraud. The only difference here is that it's banks holding the loans, not independent landlords. I see how you could sympathize with a ruthless defaulting homeowner; after all, what else are they going to do? Are we really asking them to vacate…

what they're doing is morally indefensible

I don't generally classify actions as morally indefensible or not; 1 bit of information seems awfully limiting. So while this seems somewhat immoral to me, it doesn't strike me as a major moral fault, which is what I think of when people bandy about the phrase "morally indefensible."

any costs to the bank their behavior incurs is largely going to be borne by good-faith mortgageholders and new prospective good-faith home buyers

I think we have to keep costs in perspective; there is no data to suggest that this is happening in significant numbers. So costs must be small. And since occupied homes retain more value (and vacant homes cause adjancent homes to lost value), economically, this might be better for everyone, including the banks.

Historically, real estate industry figures have often complained about strategic defaults with no real data to back them up. Furthermore, these costs pale in comparison to an industry simply abandoning its underwriting standards wholesale. When all the banks decide that they're not going to bother verifying income before loaning people hundreds of thousands of dollars, that's going to cause massive problems down the line, and those problems dwarf any caused by the defaulters described in this story.

Here's to hoping it catches up with them sooner than later.

Given that there are finite resources devoted to law enforcement, it seems bizarre to sic them on these people. Surely there are better targets for law enforcement attention? Like, maybe, every bank officer who decided to abandon their own underwriting standards?

Re: Homeowners in Foreclosure Find a Rent-Free Approach

#19

Post by tptacek »

stellar678 wrote: post #17
tptacek wrote: post #3

What these people are doing is exactly equivalent to what tendentious tenants do to avoid eviction. We almost uniformly hold those tenants in contempt; they're perpetrating a fraud. The only difference here is that it's banks holding the loans, not independent landlords. I see how you could sympathize with a ruthless defaulting homeowner; after all, what else are they going to do? Are we really asking them to vacate…

I find it interesting that debt is always couched in moral terms for individuals, but business terms for corporations. Somehow it's immoral for individuals to work a system for their advantage, but it's standard operating procedure for a business.

That's a straw man argument, isn't it? The fact that some pundit somewhere drew a line between Morgan Stanley's contracts and Joe Smith's contracts doesn't mean we have to be held to a different standard on Hacker News.

Or, more directly: it's immmoral for businesses to violate contracts too. What's the rest of your argument?

Re: Homeowners in Foreclosure Find a Rent-Free Approach

#20

Post by tptacek »

MichaelSalib wrote: post #11
tptacek wrote: post #8

Earlier quoted context omitted.

It's not fiction. But it's McSweeney's. It wasn't edited for accuracy or logic or fact-checking or bias; it was edited to make it read well. I like McSweeney's probably almost as much as you do, but would hesitate to cite it in an argument about economics! Your other two grafs don't actually rebut anything I said. Yes. Banks bad. Very bad! Also: require Thomas to sit on hold to wait to talk to someone in Bangalore ab…

It wasn't edited for accuracy or logic or fact-checking or bias In general, I do not expect main stream publications to be able to edit articles regarding economics. Journalists and editors are astonishingly ignorant of basic economics, to say nothing of statistics or law. There's a reason that economics professor Dean Baker keeps an entire blog devoted to correcting the idiocies and distortions found in traditional…

Your argument here seems to boil down to, "the Washington Post has inadequate editorial standards for business reporting, so we should be happy to cite outlets that have literally no editorial standards for business reporting." Sorry, I disagree.

But you should read McSweeney's. It often pretty excellent.

Post reply on HN