Why a Strategic Mortgage Default May Be Your Best Option

Wednesday, February 24, 2010
Posted in category Economics, housing bubble

 

Here is an interview that I did in early February 2010.

 

Many entities, from the White House to various mortgage banking leaders to self-professed pundits, are trying to put a shame element to borrowers who find themselves with acute negative equity in their homes. Is it possible to successfully shame these people into staying in their mortgage loans and not walk away from their homes?

DeCoster: Federal officials like former Treasury Secretary Hank Paulson, along with powerful special interests that profit from central planning policies, have an interest in keeping people hogtied to the sinking housing market. They are trying to depict struggling Americans as irresponsible scoundrels who are recklessly walking away from their commitments. In fact, the multi-millionaire Hank Paulson, who was one of the architects of the Wall Street bailout, told the Wall Street Journal that borrowers “have a responsibility to keep paying.” That’s a pretty broad statement to make that: 1) ignores the default option on the typical mortgage contract, and 2) disregards each homeowner’s unique options and financial situation.

The broad statement was intentional. The overall scheme calls for treating each individual debtor as one piece of a collective pool of citizens who shall be enslaved by the collapsing economy. The people who insisted, for years, that there was no housing bubble, no debt dilemma, and no recession on the horizon are the same people who are now telling us that everything is fixed, the recession is over, and therefore we should go back to our old habits – buy more stuff we don’t need, take out more loans, and buy houses and cars. The government has subsidized the purchase of both cars and houses, in spite of the fact that an abundance of Americans are still saddled with debt and holding underwater mortgages.

The Obama administration, in its massive campaign to socially engineer America, is pressuring banks into renegotiating mortgage payments in order to keep people captive in their mortgages. The goal of the elites in power is to keep up the appearance of prosperity and keep folks in debt to the big banks. Mass defaults will injure Wall Street – Washington D.C’s favorite constituency. Additionally, there’s John Courson, an FOB (Friend of Banksters) who runs all over the country trying to spread the moral message to middle-class people who are pawns in this Bankster mess. Courson is the Chief Executive of the Mortgage Banker’s Association, so whose interests do you think he is representing? Courson advising homeowners on their moral and financial strategies is like a crocodile telling the neighborhood children they should take a shortcut home through the swamp. These so-called “leaders,” unfortunately, have the necessary wealth, political power, and media access that enable them to introduce their disingenuous platform and influence the masses. For those who aren’t empowered by the political establishment, there’s no equal opportunity for commanding the public stage.

The schemers know they don’t have to deal with a level playing field, so yes, it is possible to shame people into debt subservience. In fact, the masses are already succumbing to the morality message. The elites don’t give a damn about the plight of average people who have little to no financial knowledge, feel trapped, and have nowhere to turn. That’s why those folks need to reach out to a local CPA or other financial advisor they can trust. Furthermore, they need to tune out the moralizing that flows from the fat cats and special interests that get wealthy by keeping them equity deficient.

Why is it that strategic defaulting at a corporate level is not actively challenged, but it is being challenged at a consumer level?

DeCoster: The notion of approving business defaults while flogging one’s neighbor for walking away from his mortgage is entirely irrational. One snag is that the general masses have no understanding of financial matters. No matter how “educated” they may be in the college sense, they are financially ignorant and cannot conduct basic analyses of their own financial matters, let alone weigh the costs and benefits of a complicated situation that is unique to another individual. There are plenty of talented and smart people who don’t have the skills to sort out budgets, expenses, debt, and investments. That is not a criticism – it is just a fact.

The condemnation of homeowner defaults is brought on by a knee-jerk, emotive response. People feel – they don’t think. You can thank public schools for teaching self-esteem and groupthink as opposed to business and analytical/critical thinking skills. The public schools are churning out a nation of drones, or trained monkeys, as I like to say it. Welcome to the Oprahized nation where logic and reason are abandoned in favor of emotionalizing hot-button issues for the purpose of “feeling better.”

Challenging other people on this issue, when you know nothing about their state of affairs, is something that is fired off from the gut level. The morality element is a great focal point for drawing out emotional energy. Focusing on other peoples’ behavior that you deem evil, while you avoid the objective aspects of the issue, is pathetic.

An individual’s financial options can be objectively assessed and the most favorable course of action can generally be determined. Businesses entrepreneurs and managers are constatntly analyzing and estimating various strategies, and that is how businesses become enduring and profitable. Individuals and households are no different in terms of planning best course scenarios and minimizing waste and losses. Except individuals and households suffer personally and emotionally by bearing an unfavorable financial condition. For that reason, they must take actions to alleviate uncertainty and keep their financial house in order.

Do you expect to see more strategic defaults in the coming year?

DeCoster: The majority of American homeowners are delusional about the nature of the housing bubble and the ensuing bust. They think the post-bubble housing crash is the aberration, and the housing market will return to “normal” at some point in the (near) future. They don’t understand that the bubble was the aberration, and those days are over and dead. They thought the bubble prices were the new norm. And the strange thing is that they liked it. They delighted in receiving a high price for their home, and never seemed to be able to grasp the fact that they would also pay a higher price for another home.

Moreover, new homeowners start off their purchase with a faulty – and dangerous – assumption. The word often used is “investment.” People have been sold on the erroneous view that their home is an investment. This defines the home as an appreciating asset. Real estate professionals and mortgage industry hacks help to sell that idea to prospective buyers who don’t know any better.

This notion began when central planners and social engineers misappropriated the term “the American dream” and put it into use as a slogan to convey a sense of entitlement and equality as they began to shape and subsidize the home ownership nation that got started with the creation of Fannie Mae in 1938. James Truslow Adams coined the term “American dream” in his 1931 book, The Epic of America, to describe his ideal social order based on one’s capabilities and merit. Post-WWII the term “American Dream” came to be a synonym for home ownership. During the bubble-boom years, the term “American dream” came to be defined as a McMansion for everyone with promises of perpetually rising values. This turns every homeowner into an instant entrepreneur, as opposed to a sap who gets ripped off by overpaying for a durable good he can’t afford.

A home is not an investment – it is a durable consumer good. If it were an investment it wouldn’t be the primary family shelter. This is a dangerous perception that has been hammered into the American culture, and this way of thinking will end in disillusionment. Why do folks want to see housing prices go up when that means they pay more for housing? Because of the “investment” mentality – they want to see their “investment” rise in value, even while they pay higher prices for someone else’s “investment.” Make sense? No, but it makes homeowners feel more prosperous in the end. In general, the masses have bought into a system that makes them house poor and turns them into slaves to perpetual debt.

It’s important to remember that for each individual there is an objective financial analysis that can calculate the costs of various alternatives. That analysis determines whether a homeowner is better off staying in the home or leaving the home and becoming a renter. Furthermore, there are qualitative factors to consider that are subjective to the homeowner. I think the attachment to home ownership will have people putting a heavy emphasis on those qualitative factors. Since walking away from a home is a huge lifestyle change, staying in the current home will be the most uncomplicated choice for many people. Consequently, many homeowners will remain in their homes unless they can no longer make the payment. They will dig in their heels and ride out what they think is a temporary storm while claiming the moral high ground. There is also the perception that it is somehow “superior” to own a home as opposed to renting something similar, even if ownership keeps in you in a financially inferior condition.

Henry Blodget has been discussing consumer defaults in the media, and he takes the proper position: don’t take the strategic default route just to stick it to the banks and Wall Street in a fit of anger. Don’t default to get back at the banksters, but only resort to that strategy when it’s the right business decision. All the same, the banksters, with much assistance from the banking-congressional-corporate state complex, had a major role in creating the housing bubble, engaged in reckless lending practices, defrauded scores of borrowers, and later spent a ton of loot lobbying their favorite Washington D.C. politicians and agencies for multi-billion dollar bailouts. So why should Mom and Pop on Main Street care if the bank gets the rotten end of a mortgage deal that it agreed to after assessing its potential risk?

Looking at the statistics on upside-down mortgages, there should be far more strategic defaults above and beyond what is occurring. According to Deutsche Bank Securities, about 21 million U.S. households will be underwater on their mortgages by the end of this year. Plus, between 2010 and 2012, more adjustable rate mortgage (ARM) resets will drive payments higher, making ownership even less desirable.

In reality, strategic defaults will help drive housing prices back down to market values. If the economic/monetary policy planners within the government would abandon their efforts to keep interest rates low, and if they stop pushing more debt onto American consumers by lying to them about the future of housing and the economy, then perhaps the correction will be able to occur, and the overpriced assets – houses – can be cleansed from the market. Shedding debt and overpriced housing will help clear the way for economic recovery. Talk about a real stimulus!

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I agreed to do an interview that was just published on mortgageorb.com: “Why is Karen DeCoster Advocating Strategic Defaults?” The interview is different than the one I gave, which is always a risk any time you defer to someone else’s judgment on matters of your writing. It was heavily edited, perhaps for length considerations, but also, questions were added to the interview that I did not receive, and therefore they are questions I did not answer. I understand the author was trying to lead in to some of the lengthy content I sent him, yet I still expect that I should have final approval over substantial changes to content. So much is missing from the edited version that I have chosen to publish the interview here, in full, as it was originally conducted. I prefer this version to the one I have up at mortgageorb.com. This interview was conducted shortly after I published this article on LewRockwell.com in January: “It May be Financially Irresponsible to Pay Your Mortgage.”

————————————–

Karen DeCoster, CPA, has a Master of Arts in Economics, and is an accounting/finance professional in Detroit. She recently published “It May Be Financially Irresponsible to Pay Your Mortgage.” Her website is at Karendecoster.com.

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23 Responses to Why a Strategic Mortgage Default May Be Your Best Option

  1. M. Terry says:

    February 25th, 2010 at 1:38 pm

    Good job, Karen. I guess in the world of high finance, all animals are created equal – but some animals are more equal than others.

  2. Vlad Popovic says:

    February 26th, 2010 at 7:49 am

    Hi Karen,

    I have a question for you: I never bought into the house as an investment bull, but what about as hedge? Right now you can borrow at ~5%, but inflation is probably in the 7-10% range. Anyone who is an Austrian (or even a monetarist) is expecting inflation to increase significantly in the near future. Don’t inflation expectations factor heavily in the rent vs. buy analysis?

    For example, my grandparents lived in a period of relatively mild inflation (with the exception of WWII) and rented their entire lives. They bought a lot of stock over that time and in spite of horrible health problems at the end of their lives, they never ran out of money. My parents and in-laws lived with a lot more inflation. They bought houses in the late 60′s and early 70′s (before stagflation) that I could never afford to buy now even though I have a better education and those houses have ~40 years more wear and tear. If they pull equity out of their houses and add that to their savings they will probably never run out of money either.

    So for those who bought at the top, strategic default may be the way to go, but if you kept your powder dry, is now the time to jump in?

  3. Strategic Default says:

    February 26th, 2010 at 8:02 am

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  5. Charles Lamm says:

    February 26th, 2010 at 9:21 am

    I have often wondered why people trying to manipulate you into emptying your 401(k) and ruining your retirement to save a house you will lose anyway claim the moral high ground. Slavery was once considered moral, now economic slavery is enjoying a good run.

  6. Karen De Coster says:

    February 26th, 2010 at 9:23 am

    Vlad — quick answer: No, inflation does not factor in (not in the way I am discussing this issue). Debt, especially of the underwater sort, has many ramifications, and some of them are qualitative and thus can’t be measured. Second, with such an unpredictable economic environment with such massive interventionist (government) campaigns being planned, the uncertainties and timing of inflation is _impossible_ to predict. Hedging could be financially suicidal. The risks are huge, and still, you have a decimated balance sheet.

    For astute people, it *could* be a gainful game to play if you have the money and time to play it. For the average Joe who just needs to get his financial house in order and maintain a good place to live, it would be like throwing darts at a board while blindfolded. You need not have bought “at the top” to be underwater. Some neighborhoods are ruined by loss of value in the 60-80% range due to the amount of foreclosures and auctions _and_ local economic factors.

    Also, why pull equity out of your house to put into savings that’ll be destroyed by spiraling inflation?

  7. Vlad Popovic says:

    February 26th, 2010 at 11:28 am

    Hi Karen,

    Thanks for your answer. I agree that the interventions create a very difficult environment to make decisions in; I’ve pretty much been unable to make any. It seems to me that since massive inflation has already occurred, massive price inflation is inevitable. Of course I thought a housing crash was inevitable in 2004 too so I’m obviously just as bad at predicting timing as anybody else.

    The reason I asked is that a lot of Austrians have been recommending gold as a hedge, and I could make similar arguments against gold or any asset or investment. Housing is a hedge you can live in, and as long as the cost is less than or equal to rent, it seems like a hedge that could work for the average Joe.

    I did not mean that they (the parents) should pull out equity now, only that their homes are an store of value they could tap if a major health event were to overwhelm their other savings, which are always at risk of destruction by inflation, in the future.

  8. MarcAnthony says:

    February 26th, 2010 at 11:56 am

    Karen, great article. Back in 07, I my business failed I had to file CH 7 (longer story). I asked to reaffirm my home mortgage, as I went back to working for others and could afford it. The bank never replied to my attorneys request. When the 7 cleared, they tossed out the mortgage too! I tried in vain to renegotiate but to no avail. It’s been 3 years living in a house I don’t pay for, while the banksters foreclosed. The game our parents played in with homes, has had the rules vastly re-written. Housing will continue to be a bad “investment” for a few more years (3-5 in my point of view). When they finally toss me out, I’ll rent. I’ve saved 3 years of payments, and similar homes in my area few which have sold have been sold at 1/2 the value of my old mortgage. I was lucky. After 2 years out of Ch 7, you become re-qualified for a VHA mortgage, but the bottom isn’t in yet. I had no big credit card debt and today have none. I wouldn’t recommend this course of action for someone who’s remaining mortgage balance is well below even lower prices. In my smallish suburb there are 1100 vacant homes, bank owned, but not on the market. They can’t kick the can down the road too much longer, which is why values will continue to go south. But, no one looks out for you but you. The game is rigged, so “know when to hold them, know when to fold them.” Bankruptcy if necessary, and Jingle Mail are ways out of a rigged game. Taking any equity out to invest and try to beat inflation is a huge gamble. You may have to beat double digit inflation in a few years. Even gold and silver may not be good. The market, at 30X earnings is the Titanic in the iceberg field.
    I enjoy your articles. Thanks for providing another point of view.

  9. Michael G says:

    February 26th, 2010 at 12:09 pm

    I’ve often wondered why people consider homes an investment. Typically this mantra (in my experience) comes from those who own no formal investments (such as stocks and bonds). After all the interest and origination fees, millions of people just assume the price of their homes will inevitably go up. Talk about speculation. I still know people that are still speculating on these low (read: still inflated) home prices. What makes people so confident about the values of homes going back up? The residential real estate market is a ‘growth sector’ not a ‘value sector’ IMO.

  10. Marius Z says:

    February 26th, 2010 at 3:54 pm

    Vlad,

    While interest rates may be low, and the market is depressed, it may seem attractive to get in. Aside from timing inflation, you also have to (in the mid term) contend with possibility of housing prices taking another prolonged nosedive, in which case you will be STUCK with an underwater loan, but an affordable one. Again, the specter of capricious politicians throwing their weight around is having a paralyzing effect. Everywhere you turn you have to take into account where and when the hammer may drop next.

  11. Alex Zoum says:

    February 26th, 2010 at 3:56 pm

    Miss / Mrs. DeCoster,

    If I understand you correctly you are saying that most of the general public has been misled by the powers that be and therefore can rationally and morally use ignorance as an excuse in order to renege on their contractual obligations.

    You make a strong argument. You mentioned how the powers want to treat individuals as a collective. This of course is the scourge of our civilization and not fair. But neither is walking away from obligations because it will benefit the walker. Most swords have two edges; what about the walky? Sure the lending institutes and their brokers may not have had their customers’ best interest in mind, but if you didn’t already know that you are a child or worse than ignorant.

    If you have the ability to live up to your agreements then you have the moral and (in the case of the addressed subject) the legal obligation to do so. Not reading or not understanding a contract that you signed does not alleviate you from your obligations.

    Alex Zoum

  12. Karen De Coster says:

    February 26th, 2010 at 6:36 pm

    “If I understand you correctly you are saying that most of the general public has been misled by the powers that be and therefore can rationally and morally use ignorance as an excuse in order to renege on their contractual obligations.”

    Me: You don’t understand me correctly at all. Where does this come from?

    “Sure the lending institutes and their brokers may not have had their customers’ best interest in mind, but if you didn’t already know that you are a child or worse than ignorant.”

    Me: This also has nothing to do with anything I said. ?!?!?!

    Alex, your reading skills are zero. Absolutely zilch. Re-read the article. There is no MORAL obligation in the contract. Returning the asset upon default IS a part of the contractual obligation. That IS fulfilling the legal obligation. “Not understanding the contract” has nothing to do with anything that I said. What does it take to get through your veil of ignorance? Are you too emotional to bother using critical thinking skills? You people are ignorant, ignorant, ignorant. Move on to something that you *do* understand, Alex. You don’t understand mortgage contracts and finance.

  13. R. McKamie says:

    February 26th, 2010 at 8:33 pm

    When you take out a mortgage, don’t you sign a “Promissory Note” and can’t the bank go after you for the remaining balance because of this.  I’ve heard they are checking credit histories and if it looks like you have the money, they will go after you years after the default.  Is this possible and how likely is it?  If this happens, what are your options?  Thanks

  14. Victor A says:

    February 26th, 2010 at 8:38 pm

    Karen, We live in california and have depleted 65000 in savings and down to a couple thousand to survive. We have been in the “loan modification” process for 9 months now and they “say” it is in underwriting with the final decsion maker. LTV is 336k to 290k and bought at 420k. Loan is 6.5% interest only. I thnk i’m the poster child for this! We don’t know how to go about strategically defaulting. do we stay in the house and not pay or move out and not pay? What are the steps or who can i talk to? Thanks

  15. Liberty says:

    February 27th, 2010 at 9:30 am

    Outside of the loan contract there is the “money” issue. The money you are loaned is pulled from thin air. Believe me, if you were loaned gold to purchase your home and you defaulted on that loan you would be hunted down, your remaining assets liquidated, and possibly be put in jail. All of this would have been in the contract since the loan was substantially different based on the value of the thing being loaned. When you borrow fiat dollars the loan contract is different and you indeed have options in the contract and in the law in general that you simply would not be given if the money was real.

    My ex-wife of years ago has run up several credit cards, stiffed the lender, waited 5 years & run up more cards, stiffed the lender, etc. Why do you think they keep loaning her the “money”? Because it’s not real money, it’s pulled from thin air. She does no jail time for theft because it’s not real money. The dynamic would be totally different if she borrowed tangible good or gold.

    Many of these loans were given to folks that the originator didn’t care about the ability to pay back. They just wanted the fee and then sold the loan off. You were marketed to and offered a better deal than in previous years to entice you to borrow. Part of that enticement was the ability to default. Smart borrowers saw this and saw the value that was being offered in this. It was an enticement offered above the table and thereby is considered a reasonable option to pursue as part of the legal agreement. Even if you aren’t struggling to pay.

    This is no different than paying your loan off early legally speaking. They give you the option but they prefer you don’t use it. You are given the option as enticement to take the loan. If they didn’t you would shop elsewhere. Using the logic of the current administration you should have carried the loan out to the full term because the bank needs it’s interest money to make a profit and you are “morally” obligated to pay them all of it.

    Nobody felt sorry for the lenders in the 70s who were paid back devalued dollars for the loans they gave folks to buy homes. If the same moral attitudes were applied here you should have been expected to pay your loan adjusted for inflation even if it wasn’t in the contract. I don’t think anyone did that :)

    In closing, if things get as bad as some reliable experts say these concerns over strategic default will be long forgotten shortly.

  16. Michael Ponzani says:

    February 27th, 2010 at 7:55 pm

    Ken Roberts said the same thing years ago in his Twwpm manual on commodities trading. He used to sell real estate and made teaching videos on that subject, too. He said your house is not an investment, it is where you live. if you take out a home equity loan, etc. and can’t make the payments you will no longer live where you used to live1

  17. ChrisT. says:

    February 28th, 2010 at 8:18 pm

    Victor:

    Gary North wrote an article about this himself, you may want to check his web-site. He even pointed out, that people who stop paying their loans SHOULD definitely NOT move out, until they are forced to by a completed foreclosure/eviction (one just needs to know where to relocate to when its time). And, right now, esp. in California, most banks don’t even START foreclosure for months after payments stopped, could be anywhere from 3-9 months before they do anything. With the CA courts so backed up, they have no choice.
    According to North, it is even very possible that the clock on this could be reset if one resumes a payment after about 6 months, when that then stops again, that waiting period starts afresh.
    Thus one can live rent free.
    Forget the moral aspect as Karen points out, just don’t tell ANYONE what you are doing.
    Finally, one does NEED to keep the property tax current, because communtiy tax liens and tax foreclosures are much more swift and merciless…
    (I think is North is right about doing it this way. Check out his web site too, google works great to find)

    This is THE thing to do with an underwater property, especially in the hardest hit areas like CA.

    Jingle mail is a mistake, why not live rent free until foreced to move with the huge lag that entails?

    Finally, you should be able to find Karen De Costers email at the bottom of the follwoing web page:
    http://www.lewrockwell.com/decoster/decoster172.html

    Good luck and regards!

  18. Mr.Dickie Pope says:

    March 1st, 2010 at 3:45 pm

    To any IDIOT who talks about ‘FAITH & MORALS’ regarding CONTRACTS(I include the clergy here!):

    I. Does a righteous judge talk about’ extenuating circumstances (ie F. or M. ) before or after a judgement?

    II. Is a ‘Contract NULLIFIED’ if the judge determines dissimilation by the contractor against the ‘contractee’;espescially if it brought ruin to the latter?

    III.If all things are EQUAL,EQUANIMITOUS&ABOVE BOARD:should this ‘F&M’ standard be applied to both parties or does one party have the right to an ‘upper hand’ if you will? IV.When the ‘GREATER GOOD” is applied, should the state not ere on the side of the individual to protect them from CORPORATIONS & COMPANIES?( especially when the state has bailed out the banks that approved these so called loans to begin with .) V. Using Mussolinis’ definition of FASCISM: ‘the state and corporations in partnership;with the STATE BAILING OUT the below board loans of the BANKING SYNDICATE i.e. THE NETWORK (Goldman Sachs &Co,) while not helping the INDIVIDUAL : a.Does this prove we are in a FASCIST SOCIETY ? b.Does this not prove that moral reprimmands are duly owed against this cabal? c. On this massive scale does this not demand from the GAO an accounting of the CFR and those responsible for the ‘crash and ‘BAILOUT” thereby immediately coming to the aid of the citizenry? d.In a court of law if it were to be proved that this was ‘ planned and contrived’ by said banking and government institutions would it be proper to use the words: SEDITION,INSURRECTION &TREASON ?

  19. Duncan Turner says:

    March 4th, 2010 at 4:42 pm

    Alex Zoum acknowledged that “you make a strong argument”.

    Yet in your response you say back to him, “You people are ignorant, ignorant, ignorant”.

    Not a good look. Were you having a bad day?

  20. Karen De Coster says:

    March 4th, 2010 at 5:24 pm

    Alex Zoum is ignorant, and you don’t need a “bad day” (try another cliche, dude) to see that. I love intelligent disagreement. But I hate when people read ABC and say I said XYZ. THAT is ignorance, it pisses me off, and it is based on people being swayed by their emotive response rather than reason and critical thinking. And this issue clearly brings out the emotion. You should be a fly on my wall when I am opening my emails. If I say ABC, criticize ABC on your own grounds however you want; but don’t dare twist it into pretzels so you can make it XYZ.

    I say it the way it is, Duncan, and if you don’t like it, tough shit. Go elsewhere if you want softballs. Is Oprah still on TV?

  21. Sean O'Donnell says:

    April 20th, 2010 at 8:04 pm

    Karen De Coster is – like so many clear thinking libertarians – right on target…again.

  22. Laura Morton says:

    July 6th, 2010 at 9:45 pm

    A strategic default is the best financial decision for many homeowners. First, we have to consider the age of the homeowner. If he or she is 60 plus years old, it’s time to default. Your golden years shouldn’t be spent chasing equity that was loss. It might take 8 years or more just to recover the loss equity.
    The second consideration is the health of the homeowner. If medical bills are mounting, you have to cut your losses now, rather than later.
    And finally, if the house has loss more than 20% of its value you should default. No sense in throwing good money at a bad deal.

  23. Michael P says:

    February 9th, 2011 at 8:20 am

    Hello, very nice article…
    I’d like to add my two cents on a couple of matters.
    As far as the whole buying a house as an inflation hedge idea goes, I also feel this is unwise. Reason being, while massive inflation is certain, liquidity in real estate is not. Look for the mortgage market to go the way of college loans: Life-long obligations of government-backed debt. In theory, the banks could foreclose, sell the house at a much deflated price, and leave you holding the bag for whatever the difference is. It will be the biggest debt racket ever created.

    Quick question. When a bank forecloses on a home, are they now liable for the property tax? If so, an inventory of 1000′s of empty homes must be destroying their balance sheets.

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