Policy

Sympathy for the Deadbeat: 60 Minutes On Strategic Defaults

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Encouragingly spry 78-year-old Morley Safer hustles around the Sunbelt interviewing ruthless defaulters. In the very unlikely event that the embed works, it's worth watching:

Courtesy of Calculated Risk.

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Some thoughts:

* I don't really have any beef with what the deadbeats are doing here. The property is the collateral on the loan you agreed to, and seizing that property has been an accepted recourse at least since Shylock (who by the way got completely ripped off and should have had a decent lawyer) demanded his pound of flesh.

* That having been said, the first couple profiled here, judging by the interior of their house and by the fact that they're using prepacked lettuce in the inevitable ordinary-folks-at-home cooking scene, are not exactly scrimpers and savers. This renders the guy's claim about how he was raised to be a responsible person a little hollow.

* Here is the University of Arizona study [pdf] mentioned in the piece.

* Federal Housing Authority  Commissioner David Stevens deserves some credit, not just for skillfully shuffling papers on his suspiciously uncluttered desk, but for defending the principle of not providing taxpayer support to defaulters who can still afford to pay. He should of course extend that to defaulters who actually can't afford to pay, but those decisions are above his pay grade.

* It's almost comical to hear Safer trying to put the fear of God into the defaulters by talking about damage to their credit scores. When the smoke finally clears in the 24th century, it will be obvious that the holiness of the FICO score was one of the greatest frauds ever perpetrated on the American people.