Never take out a recourse mortgage

In California and many other states, mortgage purchase loans are non-recourse, meaning if things go bad you can walk away free and clear (refinance loans and home equity loans are generally NOT non-recourse).

However some states, and many other countries, have recourse mortgages. Here's what happens when you take out a recourse loan and try to walk away: the bank can haunt you until your dying days, and maybe even seize assets you have in another country!
A SPANISH bank may be able to seize a house in Britain after the owners – a family of four – missed mortgage payments on their apartment in Spain. Banco de Sabadell in Marbella has used a European Enforcement Order (EEO) to take control of the couple’s 300,000 pound (€358,391) three-bedroom cottage near Chippenham in Wiltshire.

They may even be forced to sell the cottage in order to pay back the mortgage on the property they bought in Duquesa in 2004. The mortgage they took out on the Spanish property was 145,000 pounds (€173,171). They offered to give the apartment to the bank when repayments became difficult last year, but Banco de Sabadell apparently refused.

Instead they launched a bid to seize the couple’s home. Ian and Carol Chatterton, both NHS paramedics, have two daughters aged 12 and 14 and have lived in their cottage for 20 years.

An interim was posted to them by a county court in October, but if they want to appeal against the order, they must do so in a Spanish court; which they cannot afford to do.

“We’re devastated,” Carols, aged 48, told the Daily Mail.

“There are thousands more Britons in our position. This is a time bomb waiting to go off. I can see the suicide rate going up as a result. It will have massive repercussions.”

The mortgage on the cottage, which is 250,000 pounds (€298,450), is held by Halifax, who has agreed to the forced sale provided it got its money back.

The remainder would be taken by Banco de Sabadell.

Don't EVER take out a recourse mortgage!


Anonymous said...

Here's a concept: don't speculate with borrowed money that can't be repaid without enduring hardship. Ignore this rule and guess what? - tough shit, cry me a river.

People who don't enjoy making good on losing bets should not plan vacations to Las Vegas.


be sure to pay attention to the date 2006. My first hand experience is that many of these people were doing their best Robin Leach Lifestyles of the Rich and Famous impressions during that time. A few Chicken Littles were telling them "you are flopping it over a stump and one day, someone is gonna chop it off for you" but did they listen??????..... noooooooo. Cassandras are just chicken shits with no guts and no chutzpah - dumb asses are getting what they deserve in my book.

Anonymous said...

Number of Britons owning property in Spain ? 500,000
Investment in Spanish property 2004 - £12 billion.
Investment in Spanish property by 2009 - £21 billion.
Average purchase price - £160,000
Number of properties bought 2004 ? 75,000
Number of properties bought 2003 ? 60,000.
Number of properties bought 2001 to 2003 ? 84,000

Number buying by 2007 ? 300,000


Caviar wishes and champagne dreams, assholes.

W.C. Varones said...

I agree, of course.

Ideally, we turn consumers against debt and people start buying only what they've saved for.

Anonymous said...

Ted the Unabomber's little plot of Candyland out in Montana has been caught up in the credit bubble chasing real estate. Price reduced from about $150k to about $70k. I'm told Mark David Chapman is mulling over the idea of making a low-ball bid on the property. His 1003 application is now in processing for a conventional 15 year fixed rate mortgage for pre-approval. He tried to convince JPM Chase to let him make the down payment using a combination of cigarettes and his silver coin collection.

Anonymous said...

"Ideally, we turn consumers against debt and people start buying only what they've saved for."

W.C. that's cute - it really is. It just warms the cockles of my stony Grinchesque heart. It makes me feel as though I'm in a Disney movie and have long flowing locks of hair like Sarah Jessica Parker (again).

"The percentage of loans going to subprime buyers rose 8 percent in the third quarter, their first year-over-year increase since 2007, according to a report issued this week by Experian, a credit reporting agency. For new cars, the percentage of loans going to subprime buyers rose 13 percent over the July-September period in 2009. The increase for used cars was 3 percent."


This is America and buying on E-Z Credit terms is a way of life (Baseball, apple pie, mom and Chevrolet - and St. Patrick's Day & Macy's Thanksgiving Day Parades).

I read a comment from another blogger/poster that is just sticking with me as of late - his (or her) position was that true inflation can only be caused by rising wages and full employment. I think I'd add to that - the only things that can cause inflation are rising wages, full employment and Crazy Eddie E-Z financing available to the unwashed masses demanding the good life. If you get all 3 going on at the same time, the shit really starts hitting the fan.


Anonymous said...

"Then, in 1949, Levitt and Sons discontinued building rental houses and turned their attention to building larger, more modern houses, which they called "ranches" and which they would offer for sale at $7,990. All a prospective buyer needed was a $90 deposit and payments of $58 per month. The Levitt ranch measured 32' by 25' and came in five different models, differing only by exterior color, roof line, and the placement of windows. Like previous Levitt homes, the ranch was built on a concrete slab with radiant heating coils. It had no garage, and came with an expandable attic. The kitchen was outfitted with a General Electric stove and refrigerator, stainless steel sink and cabinets, the latest Bendix washer, and a York oil burner. Immediately, the demand for the new Levitt ranches was so overwhelming that even the procedure for purchasing them had to be modified to incorporate "assembly line" methods. Once these techniques were put into action, a buyer could choose a house and sign a contract for it within three minutes."

Bear in mind, these buyers who were buying on credit were also regular people who had witnessed the Great Depression within the previous twenty years. Those were truly hard times - not the kind of shit that candy asses are complaining and whining about today. Like my old, old, old bird hunting & globe trotting pal likes to say - "Today, America has the fattest poor people in the world".

Anonymous said...

Nine years later, the asses are fatter and rounder than ever.

Surgeon General: Americans Have Gigantic Fat AssesJune 13, 2001

Anonymous said...

The report is the latest in a string of dire findings from Surgeon General David Satcher concerning the high percentage of Americans who suffer from fatness of ass.

"The state of the American derriere has reached crisis proportions," Satcher said.

Anonymous said...

The Surgeon General said the solution to the national health crisis lies in obese citizens "somehow dredging up the shred of dignity needed to drag their rotund, repellent posteriors to a gym, for Christ's sake." He also encouraged those with American Fat-Ass Syndrome, or AFAS, to "lay off the sour-cream-and-chive Ruffles."

Anonymous said...

Searching high
Searching low
Searching everywhere I know

For dignity

Anonymous said...

The report has provoked outrage among the public at large.

"Okay, so we could all stand to lose a few pounds, but I don't see the need for such insulting language," said Nancy Goode, 48, a morbidly obese St. Cloud, MN, housewife with diabetes, knee problems, and an ass so ludicrously huge it looks like some sort of mutant, land-bound dugong. "Besides, lots of people in this country are very slim and attractive. I see them on TV every day."

Anonymous said...

The outrage!

Candy Asses in Candyland would pick up torches and pitchforks if they could work up some stamina - instead they will sit at home, cry, complain and moan, eat some Rocky Road, watch a little Oprah and Dr. Phil, etc.

Anonymous said...

"Ideally, we turn consumers against debt and people start buying only what they've saved for."

Good luck with that, Bro. Don't worry - we all tilt at the occasional windmill from time to time. It's human nature.

W.C. Varones said...

You may say I'm a dreamer, but I'm not the only one.

Dave Ramsey has a nationally syndicated radio show as well as widely distributed educational classes that are all about getting out of debt. People call up the radio show every day and scream "We're debt-free" and then tell the story of how they did it as inspiration to others.

Anonymous said...

Doesn't hurt to have dreams. Obama dreamed the dream of becoming President and lo and behold - Shazam!

For every person that follows Dave Ramsey's advice (which by the way I agree with) another 10 are down at their local Dodge dealer trying to figure out how they can work another payment into the old monthly "budget" 'cause they can't live without the latest and greatest Ram pick 'em up truck with the Hemi engine. (Ram - truly the truck choice of idiots)

Anonymous said...

Could you please sing "Give Peace a Chance" for me?

Anonymous said...

Skittle shitting unicorns

Fornicating under a rainbow

Watched over by Leprachauns

Dream a little dream for me

Anonymous said...

I'm not joshing you...

Location: Washington, D.C. Come enjoy a fun filled day as we celebrate the delivery of our Skittles Shitting Unicorns! We will be providing the attendees with the lessons needed to rope and subdue your very own Skittles Shitting Unicorn.


Anonymous said...

I'm sorry - I've been reading Lewis Black's "Me of Little Faith" and just in a Bad Santa kinda mood.

Anonymous said...

What I meant to write was that Barry O dreamed the dream of Jesse Jackson and what do you know, kiss my grits, the son of a bitch pulled it off! Back when Jesse was doing the "Run Jesse Run" dance moves on the floor in 1984, I think he got some inspiration from Harold Washington who was running the show back then as the first African American "Hizzzz Honaaah" in ..... wait for it........



Chicago.. so hey, keep dreaming - what 'cha got to lose, right?

Anonymous said...

Harold Washington.... wasn't that one of the Cosby Kids in Fat Albert .... Weird Harold (Washington)

Anonymous said...

Now W.C., I didn't go and hurt your feelings, right? Hey, one of the Madoff kids off'ed himself today (or he was into autoerotica that went bad - I wonder which hand he used or if he's like your old pal the Smug Bastard and is ambidextrous). Take away the money and the cry babies just piss themselves - what drives people, sheesh. It's only money, right?

W.C. Varones said...

Hurt my feelings? Of course not. Though I didn't quite understand the Harold Washington bit.

You see that dirty Madoff Jr. was alone with his 2-year-old kid when he offed himself? What a dick.

As for consumer debt, check this out. Consumer debt is collapsing if you exclude the student debt that the evil Feds are pushing on the kids. Which raises an interesting possibility: the Feds are keeping the education Ponzi going because it is so big that its collapse would bring down the whole economic Ponzi.

Good Times!

Anonymous said...

"Of course not"

Well, shit! I must be losing my touch!!

That whole movement in Chicago in the 80's still lingers - it doesn't surprise me that Barry chose to cut his political teeth there.

"You see that dirty Madoff Jr. was alone with his 2-year-old kid when he offed himself?"

Don't care. Maybe Madoff the 3rd or whatever his/her name is will learn something of value.

Yeah, consumer credit is dropping in areas. It's picking up in others - who you gonna believe, W.C.? - a blogger wonk (no slight intended as I actually like Mish) who studies charts or someone who shaves, feeds the Inglorious Bastard his Little Friskies and then heads off to his job to lend money and collect payments? It isn't with the velocity that the boom had but that was artificial and not sustainable. How's that mortgage treating you on the new digs? Get my point? By the way, yours truly is headed on over to First Community Credit Union to drop off the required statement copies, tax returns, pay stubs, etc. for final approval on the mortgage to be used for the purchase of a shack. Not the same velocity but lending money will stop happening at Jesus's second coming and not a moment sooner. Gotta go - I'm off to join the Lower Slobovian Unwashed Masses and get back on the hamster wheel of debt - Toodles!

Anonymous said...

Since every pleasure's got an edge of pain
Pay for your ticket and don't complain

W.C. Varones said...

Welcome to the fixed-rate-mortgage hyperinflation trade, my friend!

I fear your timing may be perfect.

As for my mortgage, it actually shrank outstanding debt because my loan was a lot smaller than the seller's... and I'm shrinking outstanding debt by paying off extra on my mortgage every month.

Anonymous said...

What Mish and others sometimes fail to mention about the contraction in outstanding debt -

For the most part, it is not coming from people suddenly having a "come to Jesus" moment and changing their ways. It is coming from defaults. Most of the contraction in credit is coming from defaulted loan commitments. Think about that a moment. Five to ten years from now, these same individuals are going to be jumping back on the hamster wheel (as a matter of fact, many are chomping at the bit to do it now and would if a lender would give them "another chance"). I'll bet you dollars to doughnuts, they will be back.

Buying a house for me isn't about speculation, fear of inflation, deflation or Jimmy Carter style stagflation. I'm getting too old to play Peter Pan anymore and I want a shack to settle down in. I want another Brittany bird dog. The Inglorious Bastard is getting too old to roam the streets every night but an apartment is too small to satisfy his wanderlust - the Brittany puppy (to be named Bing the Younger) is to be his nemesis/playmate. That's why I'm biting the bullet and buying a shack. I just wish I had enough saved to just buy the god damned thing without a mortgage but what the hell, you can't win them all, huh?

Anonymous said...

dollars to doughnuts they will be back W.C. dollars to doughnuts

Anonymous said...

"and I'm shrinking outstanding debt by paying off extra on my mortgage every month"

Good. Follow through.

When you can part with the groupthink (of any kind), do so and don't be a lemming. If you're nuts enough to be a bicyclist I suspect that will be a piece of cake for you.

Whenever you find yourself on the side of the majority, it is time to pause and reflect. Mark Twain

Anonymous said...

Here's a little news from the trenches - we may be seeing the crack up boom in the ten year treasury (which has a direct effect upon mortgage interest rates) market.

Movements in the 10 year treasury have made mortgage rates increase .3745% in the past nine days (roughly the time Ben said he was gonna start up QE2). The market is beginning to price in some additional risk. The market used to react in a more mellow and laid back way towards Ben, more like "Grateful Dead" but it is now getting a bit more Ozzy in its opinion.

Anonymous said...

best reason to get a shack Try not to get "all vegan" and flip out.

W.C. Varones said...

That's the best part about vegans -- we won't eat your dog!

Anonymous said...

Yeah, I didn't think you were going to go Korean and eat the dog - what I was meaning was that I've known vegetarians and vegans (one that was directly related to me) that were the most uppity pain in the ass about all things having to do with animal ownership and animal cruelty, etc., etc., etc., blah, blah, blah. The types that would ban all hunting and fishing and argue that English Setters, Brits, Labbies, Chessies, German Shorthair Pointers, English Pointers, etc. should no longer be used for the purpose that they were bred over the course of several centuries. A more uppity, holier than thou, uptight bunch of pains in the ass you will never meet - look down their collective noses at another person who wants to eat a steak or catch a trout for the frying pan. Such a delight . Anyhoo, like I said - one of them was a direct relative (daughter)... after she became an adult, I stopped talking to her. It was like getting rid of a bad case of hemorroids.

Anonymous said...

Back to the subject at hand:

Crazy Train, baby - Crazy Train

**IF** that comes to pass, mortgage rates are going to go up. Consequently, the monthly payment requirement will do the same. Would be buyers in real estate markets who purchase houses not on the "sale price" but who purchase on "what's the monthly payment?" ability will only be able to afford so much. You can't get blood from a turnip - even a big turnip. Prices will have to modify accordingly. If we really want less poorly constructed credit and debt floating around, prices (A.P.R.'s) are the only cure. It won't be the end of the world - shit the first house I ever bought with a mortgage had a 10% APR and I was getting a deal compared to the marketplace. The world isn't ending but it is re-pricing. There will be some sticker shock for people who have become complacent with low, low, low (said in barritone voice) financing rates but they will adjust and prices will do the same.

Anonymous said...

Also, WC a thought -

If these Spanish banks are not allowed to go after the assets of the people who borrowed the money to satisfy the debts they created, who do you think is going to be stuck with the tab in the end? Down the chain of bagholders, there will be the "end of the line bagholder" - the taxpayer. Stop villifying the bank's collection practices - these assholes made loans so they could buy villas that they didn't need in sunny Spain because they hate their weather back in old Londontown. I used to routinely run into assholes like this down in Florida. Now they want to sing the blues and welch on their debts - I say tough shit, pay up sucka'.

wcv said...

I'm not vilifying the banks.

Stupid poms signed a recourse mortgage and are getting what they asked for.

Anonymous said...

OK then, my bad.

Whats a pom?

Anonymous said...

A pommy shortened to a pom. (that according to wikipedia) hmmm, learn something new every day. I knew about "limeys" sailing the seven seas but "poms", hmmmm. Is that related to pomegranate?

Used as a disparaging term for a British person...

"disparaging term" I like you more already, W.C.

Anonymous said...

OMG, POMMY!!!! Now I need to figure out how to use my new "word of the day" in my rant about "keen horsewoman and silver shorting extrodinaire Blythe Masters" over on JDA!!!! Thanks WC, you've made my Grinch heart a teeeeeny bit bigger today!!!

Anonymous said...

"I agree, of course" - WC 12/3/2010

I forgot about that. I quit smoking last week so I think I just must be looking for a fucking fight. I should go to a Sports Authority, buy a heavy bag and just beat the living snot out of it until I get my normally charming and bubbly personality back.

Anonymous said...

Spain has between 700,000 and 1.1 million unsold homes, an amount that will drag on a recovery in the housing market as prices will probably keep falling in 2011, the Bank of Spain said.

Like I said, fucking Brits borrowing money to buy places in sunny spots 'cause they don't like their weather back home. Next time, take a camping vacation and pitch a tent on a Spanish beach you goddamned pommies.

should have let the Luftwaffe's Heinkels and Messerschmitts make mince meat out the goddamned poms sorry, still not smoking (yay!)

The disinformation and election interference is coming from inside the house

The FBI just admitted in court that Hunter Biden's laptop is real. Here are 20 minutes of Joe Biden, U.S. intelligence officials, and th...