Nevada Strategic Default Is Growing In Popularity

I am really excited that strategic default in Nevada is up to 1/4th of the walk aways. This is crucial since the more people walk away, the more that bankers will have trouble blowing another real estate bubble. And don't think they aren't trying. But as we see from a survey in Nevada, many who could pay on their toxic mortgages have chosen not to. This hits bankers in the cajones, and that prevents more bubbles. One Fourth of Nevada walk aways involved people who could afford to pay, but who strategically walked away from their debt. The more that people educate themselves, the greater chance of avoiding a future real estate bubble, although the temptation of easy money coming to your mortgage broker may be attempted in the near future. It has to be very painful for the financial system to absorb foreclosures, and two ways are through contesting an unlawful foreclosure and the other way is to walk away when technically you can make a payment on your crappy mortgage.

Don't forget readers, that people always, always have the right to walk away from a ponzi scam and I proved that the easy money lending in the early to mid 2000's was a premeditated ponzi both here and here.

Banks get loans from the Fed and loans from each other, and that makes them liquid. They are able to operate and they have proper cash flow. This is called liquidity. Banks are liquid and QE2 is an effort to add more liquidity to the banks. However, many in Europe say that the banks in the US have plenty of liquidity. The issue then is one of solvency. Is the banking system solvent? If banks are not solvent, they cannot loan much, and are like the Japanese banks, zombies walking around with no real life.

Solvency means that assets exceed liabilities. With all the bad loans on the banks books, they are stuck with them and must figure out if they need to be written off. They must put adequate reserves to buffer those write offs. A massive decline in the housing market nationwide could make the big banks massively insolvent.

Banks can kick the can of solvency down the road, waiting for the economy and house prices to recover, and they get by through borrowing liquidity. But banks are having a great deal of trouble, both on the regional and national/multinational level. They may need to raise still more capital in what is becoming a never ending story.

If people would just walk away en masse, this would teach these banks that ponzi lending is a dangerous game to play. But as long as so many people are afraid to walk away, then the banks are confident that they can recover, and play this ponzi game again.

Disclaimer: I am not offering legal advice, but just report the facts about how banksters have swindled you with loans they knew would fail. They were so sure they would fail that they bought insurance from AIG and Joe Taxpayer bailed out AIG while Goldman and the other criminal types got their money. I know, they are innocent until proven guilty, but if the government is too corrupt to prosecute then how do we know they aren't criminals? But recently I have heard of the IRS going after people for taxes on Helocs. If you had a big Heloc and walk away, you may owe the IRS a lot of money.

This bill, HR 5072, never became law after being passed by the House. The reason it didn't become law is because it would have made it impossible for a person to buy a house forever, banning that person from insurance for life. The dickheads in the senate thought better of this ponzi killing law. I dare them to pass something that will end the possibility of mortgage bubbles for generations.

But this law shows that congress wants to punish people, and not the banksters. And yet these criminals can't punish like they want because, when push comes to shove, they can't blow their own noses without the cooperation of the American people.

This is why I always hope that people never trust a mortgage, never trust the financial system, and never trust a politician, because these financial products have been to us like a massive tax, a massive swindle. If you ever see house prices rising past the rate of inflation, you know there is a bubble. brewing and don't buy.

Sell before the bubble gets too far along, and it may be shorter next time unless you own your home outright and are not using it as your retirement. And remember, the financial powers that be are out to get you as you are part of their order, and they have already proven that they are predators and look upon you as easy prey.