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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: SteveinTX who wrote (107677)	2/1/2010 6:05:54 PM
From: Webster Groves	4 Recommendations Read Replies (1) of 116555

We are talking contracts, not hypothetical moral obligations. Mortgage contracts contain clauses that if the mortgagee fails to make payment, the mortgage holder can foreclose and seize the property held as collateral. OK, that's a contract. For a 20% down mortgage in a normal market, it makes sense, too. But for a 0% down mortgage in a bubble market, it is a risky bet for the mortgage holder. Nevertheless, it is a contract, and the mortgagee has the legal right to walk away and forfeit his equity should he choose. As long as the terms of the contract are adhered to, all promises have been kept, and the courts should enforce that fact. wg

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