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Giving the Bank the Keys

The recent topic I find trending up (my own observation, not from any particular tracking site) is that of walking away from your mortgage, otherwise known as “giving the bank the keys.” I’ve been reading about moral hazard and the risk of further collapse in home prices should people continue to default, but it was [...]

Realistic Toys?

Maybe too real?

The Mortgage Bailout

Details have been released on the proposed mortgage bailout. It appears that banks will be invited to lower the interest rate and/or the principal to get the borrower’s payment down to 31% of their income. This should result in a cost to the bank that’s less that that of foreclosure. In theory. Given that the [...]

Moral Hazard

From Wikipedia; Moral hazard is the prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk. Moral hazard arises because an individual or institution does not bear the full consequences of its actions, and therefore has a tendency to act less [...]

More on Money Merge

Earlier this month, I mentioned the Money Merge Account program on my feature site, and, as frequently happens, I find a magazine article coming to a similar conclusion. The May issue of Kiplinger’s Personal Finance magazine has a brief article titled “Don’t fall for this mortgage pitch.” It’s a pretty brief article which again questions [...]

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