Comment on A conundrum
null_dot@lemmy.dbzer0.com 3 weeks agoSorry chief, you’re just not picking up what I’m laying down.
Of course you still owe the money, you’re just much less likely to pay.
Comment on A conundrum
null_dot@lemmy.dbzer0.com 3 weeks agoSorry chief, you’re just not picking up what I’m laying down.
Of course you still owe the money, you’re just much less likely to pay.
ExLisper@lemmy.curiana.net 3 weeks ago
I don’t know how this works in US but where I live when you owe bank money they will simply garnish your wages and benefits. No one is defaulting on their mortgage to save money. That’s just not a thing. I personally know people who were paying their mortgages for many many years even though their house was worth way less then the mortgage. You just suck it up and hope the price will eventually go up. If it doesn’t it’s still better then living on the street.
null_dot@lemmy.dbzer0.com 3 weeks ago
If you were in negative equity, you might choose to suck it up and pay.
Statistically however, borrowers are much more likely to default when they’re in negative equity, because quite obviously, there’s an incentive to declare bankruptcy.
If you owed a million dollars on a property that had been condemned and is only worth $50k, obviously you would declare bankruptcy. If the property was worth $400k you’d probably do the same. If the property was worth $800k you might do that, but you might choose to suck it up.
My point is, negative equity is an incentive to default on the loan.
Obviously, defaulting on mortgages is a thing. Obviously, people are much more likely to do so when they’re in negative equity.
This isn’t something people do as a sophisticated well planned financial strategy. In a context of economic upheaval, declining property losses, usually because of unemployment, which usually causes family breakdowns.
ExLisper@lemmy.curiana.net 3 weeks ago
In USA. As I explained in Europe it’s not a thing. Own contribution is a thing in USA and Europe. Therefore, banks don’t require own contribution because of defaults. Q.E.D.
null_dot@lemmy.dbzer0.com 3 weeks ago
What do you call it in Europe when someone stops making repayments on a loan ?
Obviously, that’s a thing.
jumping_redditor@sh.itjust.works 3 weeks ago
clearly you’ve never heard of under the counter income
ExLisper@lemmy.curiana.net 3 weeks ago
That may work for some minimum wage jobs. No serious company is going to pay you under the counter. At least not in Europe. I’m not even sure what are you suggesting. You clearly don’t know how any of this works in Europe.
jumping_redditor@sh.itjust.works 3 weeks ago
who said anything about companies