In the vast urban wasteland that is America there is a quiet little battle being waged between the forces of high finance and common everyday citizens. After years of usury and abuse, the tables have turned in this economic turmoil, giving homeowners the upper hand for the first time in decades.
As many as 2 million homeowners may exercise an option called default in the coming months. They are taking stock of their portfolios and weighing the pros and cons and calling it quits, leaving the banks with excess inventory, which is essentially worthless, further driving down prices and forcing other homeowners to walk away when the underwater homes have no hope of ever regaining value.
While there are some who say that it is imoral to walk away from debt, a growing number of once responsible borrowers are finding the hidden joy of being a dead beat. The Wall Street bailouts and IRS winfalls for banks like Citicorp have raised tempers and the growing resentment of fat cats is creating a tea party of tsunami proportions. Although this rebellion is a quite one, taking place in living rooms across the nation, it is still no less potent.
If corporations are allowed to walk away from obligations like pensions, why shouldn’t we walk away from our useless debt? Hand over the keys and bid a fond farewell to your home so underwater it feels like you’re living at the bottom of the Marianas Trench. It is neither immoral nor wrong. It is business.
In the coming years banks holding vast real estate portfolios will be faced with be some very painful math. They could wait the fifty years or more it will take to get a return on the investment, or they could raze entire neighborhoods, reducing inventory, and thereby raising home prices.
But until then, there are many people in this country who will reap the benefits of the collective anger at those who got us into this mess.
If you still have good credit, you could play a shell game, which is so deliciously melevolent, you will feel like the financial equivalent of the Marquis de Sade. If you are single but in a long term relationship, you can take advantage of scheme. Even if you are not, you could use friends and family to accomplish this economic hat trick.
First, stop paying your mortgage. Then inform the bank you cannot and will not pay any longer. Put the bank on notice, so they wake up and realize the danger they face.
Second, “reluctantly” agree to a short sale. Tell them you will try to locate a buyer, but you are hesitant.
Third, have your cohort in this war make an offer on your distressed property. Feel free to lowball. Banks will take what they can at this point.
Fourth, complete the sale, pay in cash.
Fifth, agree to pay “rent” to your partner. As part of your “lease” agree that all “rent” paid to the “homeowner” will go toward the purchase of the home.
After a few years of paying rent, have your partner sign over the deed to you. You get your home back, and you never had to move. Plus all that useless debt is gone, and if and when prices recover, you will have made a profit.
Is it illegal? How the hell should I know? Is collapsing a global economy and then holding elected officials hostage to get a tax-payer-funded bailout legal? Oddly enough, it seems it is. So I think this scheme is on the up and up.
And here’s the sweetest and most delicious part. For all of you gay couples out there who can’t get married because the good folks of states like Michigan, Ohio, Florida, and Texas said you couldn’t, you can full advantage of this little scheme. Since your relationship is not recognized by the state, your partner might as well be a perfect stranger. In this case, after a couple of years no transfer of deed is required. You just put your partner’s name on the title. It’s like a giant middle finger to those who would deny you your rights.
So there it is. Do what you will with it. But like Tiger Woods, just do it.
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Huh, almost makes me wish I still had good credit… or maybe a gay lover. The only problem I can see with your scheme is that the banks will simply start to cry a little and the government will rush over to see what’s the matter. Once they explain what is wrong, it’ll only be a matter of days before the government enacts some crazy bill to make the banks’ lives easier once again! Ah, if we could all just be a bank, we’d actually be treated like human beings!
Damn if that 14th Amendment don’t cut both ways.