"Jingle Mail" and "Buy and Bail"
June 11th 2008 17:18
Now we have "buy and bail". You look at your mortgage compared to the current value of your house. If the mortgage is $450,000 and the market value is $225,000, and the same basic house two blocks over is for sale for $225,000, you make a business decision. Let's say you have one of those neat mortgages, nothing down and an option-arm. Your low payment is going to adjust upward soon to an amount of money you can't afford each month and soon you will be facing foreclosure.
While your credit is still good, you buy the house two blocks over for $225,000 and sign a statement saying you are going to rent our your present house. Soon as the loan papers are approved and you move in to the other house, you send the keys back on the original house, thus "buy and bail."
I am troubled by the morality of these schemes. The message is that this is only a business decision. Few are troubled, it appears, by the notion that your word is your bond." So, I'm wondering if this abrogation of contracts practiced by some home owners couldn't be applied to other consumer purchases. For example, suppose you bought a big SUV for $50,000. Not only do you have the depreciation from driving the vehicle off the floor, but now low-miliage SUVs are filling car dealers lots. GM has shutdown their assembly lines. To make matters worse, dealers are now offering hybrid SUVs. Why couldn't you devise a "buy and bail" for SUVs.
Suppose, I ran up my credit card buying iPhones for all my employees at $399 a pop. Now Apple is introducing a better iPhone with more gigs for $199. Couldn't I just walk away from my contract with V|SA or MasterCharge? Really, aren't we saying that anytime we buy something, if something better comes along, we should say, "Screw the banks, I'm walking baby." Why, that could apply to marriages couldn't it? Oh that's right it already does.
Many years ago, Ayn Rand warned that inflation ruins morality. Boy, was she right!
“inflation” means an “undue”—or improper or fraudulent—expansion. The expansion of a country’s currency consists in palming off, as values, a stream of paper backed by nothing but promises (or hot air) and getting actual values, the citizens’ goods or services, in return—until the country’s wealth is drained.
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