Friday, January 15, 2010

Short Takes: US Mortgage Solution, Walk-In Clinics, and More

1. It seems wrong to just walk away from debts. What if your house value drops to $200,000, but you owe $300,000 on your mortgage? Should you just walk away? Laws in Canada make this difficult, but US law is different. Roger Lowenstein argues that Americans whose mortgages are under water should just walk away. Banks make decisions purely based on profit and loss calculations; why shouldn’t homeowners do this as well? By doing the “moral” thing, homeowners are putting themselves at a disadvantage in their dealings with banks.

2. Larry MacDonald is concerned about the direction Canada’s medical system is heading as doctors tend to work in clinics with increasing profit motive.

3. Canadian Capitalist shows that the so-called lost decade for stocks wasn’t a total loss for everyone.

4. Thicken My Wallet discusses an important negotiating tactic: stop talking. I know this as the “stop digging” rule.

5. Gail Vaz-Oxlade looks at what increased insurance premiums charged by CDIC and possibly CMHC say about the possibility a major banking failure.

6. Canadian Financial DIY offers a drastic solution for keeping people away from fraudulent investing schemes.

7. Big Cajun Man makes a case for de-cluttering your financial records.

8. Frugal Trader sets some aggressive financial goals for 2010.

9. Preet puts on his professor persona to explain a new competitor to the Fama French Three Factor Model of investment returns.

5 comments:

  1. Thanks for the mention, have a great weekend and the score for this is Zero..

    C8j

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  2. Thanks for the mention. Have a great weekend!

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  3. Thanks for the link. Have a good weekend.

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  4. I found the Lowenstein article interesting.

    One thing he could have included is that people feel a psychological attachment to their home more than they would some other asset. Losing a home would feel like defeat. There's just so much emotion involved in the place your family lives.

    Still, if I owed $400k on a $300k house, I would be extremely tempted to walk away. Maybe, in a future post, you could address how things are different from this situation in Canada?

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  5. Gene: I think you're right that some people are likely to stay in a home with and under water mortgage for various emotional reasons. I'm quite attached to my home.

    I don't know enough about the law to say very much about the differences between Canada and the US on mortgages. I'm told that Canadians remain responsible for their mortgage debts even if they'd like to walk away from their homes, but that (in parts of the US), Americans aren't responsible for the mortgage beyond giving up their homes.

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