Credit Crunch "Bad Science"?

[Nogbad]

You might not have assets today, but if you ever want to have assets again, then walking away and hoping the lender will forget about it is a very bad idea. They can, and do, pursue debts years after the property was repossessed.

"Nacab says a couple in Essex handed in the keys following a marriage breakdown in 1990. They were told that this would be the end of the matter. Both left forwarding addresses with the loan company but heard nothing before receiving a £55,990 shortfall debt demand in May 1999."

http://www.efbf.org/jobs/Press-Mounting-debts-haunting-the-repossessed-13890.htm

It happened to the people who were repossessed last time there was a downturn in the housing market. It will undoubtedly happen to people again this time. So, no they aren't going to repossess the apartment you rent after you hand the keys back, they are going to wait until you think you have got back on your feet and knock you right back down again.

Leaving the forwarding address in retrospect was not a good moonlight practice.

In all seriousness many did leg it in the 90/91 crash. Some got so badly burned they vowed never to own a house again. The banks will try to recover debts but there is only so much that is practical. No idea how this works in the US with different laws in different States.

 

[Jaggy Bunnet]

Leaving the forwarding address in retrospect was not a good moonlight practice.

Indeed.

The banks will try to recover debts but there is only so much that is practical. No idea how this works in the US with different laws in different States.

More likely is the banks will sell the debts to a company specialising in this area (for next to nothing) and that company will then decide whether it is worth pursuing them years later.

 

[Badly Shaved Monkey]

roger, are you really disagreeing with Badly Shaved Monkey?

He didn't say that the problem is currently small. He suggested that perhaps it would become small if everyone decided to agree that it was small.

Precisely so.