THE DRUNK REPORT

Welcome to February, Bar Flies! The first day of this month falls on a Martini Monday and one helluva rant is brewing! Recently, we’ve learned of the “move your money” phenomenon. Frankly, I approve. Move your money from the big banks to a credit union or local bank where walking into the lobby is akin to entering the Cheer’s bar.

The newest backlash against Wall Street and the big banks is in the form of “strategic default.”  Basically, it means that borrowers get to act like banks.  If you’re underwater on your mortgage, walk away.  Actually, run like your fucking feet are on fire in the opposite direction.

Millions, literally millions of Americans are “underwater” on their mortgages – meaning their homes are worth a fraction of what the borrower owes on the home.  And the banks aren’t working with the borrowers, especially if the borrower is current on their mortgage.

I thought the whole point of the stimulus and the bail outs and all that crap was to help homeowners get out from under these crazy mortgages that the lenders were more than happy to hand out left, right and center at the height of the housing craze.  Again and again, Wall Street and the banks are getting back on their feet while the average American is getting the shit end of the stick.

And there are plenty of “moralist” types out there telling you not to default on your mortgage just because you are “underwater.”  Ummm, ok…how about you tell the guys at Morgan Stanley and Tishman Speyer not to walk away because they are underwater?  Underwater to the tune of billions of dollars, not just a measly hundred thou or so.

Looking at the chart measuring performance by the major banks on helping borrowers stay out of foreclosure, you can see the banks are not that interested in helping anyone but themselves.  None of the banks have helped more than half of the borrowers eligible for loan modifications.  Not one single bank.

The New York Times is even sounding the battle cry to walk away from these insane mortgages.  Why shouldn’t borrowers have the same opportunity to fish or cut bait the banks do?  Borrowers are adhering to their contracts.  After all, if you can’t pay the monthly payments, you forfeit the property to the bank.  Ok, borrowers are doing that.

What’s the problem?  The banks don’t like it.  The banks, who were in the position to know that housing prices weren’t going to go up forever, want borrowers to keep throwing good money after bad.  The banks, who should know how much equity a house has, screwed the pooch and want the borrowers and the American tax payers to be stuck holding the bag.

If there is only one link you click on out of this entire article, let it be this one:  “Go Ahead, Walk Away:  There Is Nothing Immoral About Ditching Your Mortgage.”

If you need more convincing, here is Stephen Colbert’s take on this issue: