Here's an interesting tale that illustrates exactly why America is in a big fat mess:
"Ron Nash - Carlsbad Calif.
Ron Nash is not someone who's shy about pushing to get what he wants; he's a motivational speaker, headhunter and author of "How to Find Your Dream Job; Even in a Recession."
But when it came to obtaining a mortgage workout, he wasn't getting anywhere -- even after months of trying. He finally wrote a letter to the president of his lender to try to resolve the issue. The results were very gratifying -- at first.
"I was contacted by the office of the president and apologized to profusely," he said, "and told that they would try to work things out."
After that, however, and after he was asked to send in all his paperwork for the fifth time, he didn't hear from them again for six months. Then, recently, he finally got a call back with a loan workout offer.
The lender offered an extremely low rate, 2.8%, which sounded great. The problem was the value of his property has dropped from $840,000 to about $620,000 and the lender would do nothing to reduce the mortgage balance. Nash believed he would be upside-down on his mortgage, owing more than the house was worth, for years.
Meanwhile, the slowing economy, with little hiring going on, has taken a toll on his income.
He looked around town and decided he could walk away from his house and rent another comparable place for half of what he would be paying his bank just for the mortgage payment.
He loves his house but he's choosing to give it up rather than shackle himself to a bad investment for years.
"The house is just a thing," he says.
Did you get what's going on here? Mr. Nash borrowed way more money than he could repay and got into financial trouble. He worked out a deal with his lender for a interest rate lower than he had freely, lawfully, and morally agreed to, but he didn't want to pay back the full amount of principal he borrowed (that is, he didn't want to return to the lender the full amount that he had borrowed) because the market price of his house had fallen below the amount of his mortgage. Apparently Mr. Nash feels no moral obligation to repay what he borrows; he thinks he should get free use of other people's money. So to solve his financial problems (which, of course, he blames on his lender and for which he accepts no responsibility), he intends to defraud his lender by "walking away" from his house (that is, he will cheat his lender by refusing to make payments on his loan and by abandoning his house). Who cares about morals, who cares about honesty, who cares about fulfilling obligations you freely accept, who cares about keeping promises? Well, certainly not Mr. Nash. California law allows Mr. Nash to defraud his lender without too much trouble; the lender will have no legal recourse other than taking possession of the now devalued house. The lender will lose $120,000 on the principal and all the interest due him. As California law permits fraud against lenders, is it any surprise that lenders do not want to buy California's bonds and that California is now in an inescapable $45 billion budget hole? Sounds like karma to me.
This is a small example of what Mr. Obama is trying to do with China, Japan, and other nations. He wants to make free use of trillions of their dollars to finance his grand plans, but he intends to repay these nations not a penny--either in interest (which is effectively zero) or in principal (which they will never recover). In short, fraud is Mr. Obama's plan to confront the Depression of 2009. Will foreign nations fall for this fraud? Would you?
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