Back in January, I noted the troubling trend of home borrowers in California simply walking away from their mortgages–abandoning their promise to pay their loans and undermining the stigma of default. As I wrote then, political rhetoric absolving borrowers of their responsibilities — and encouraging them to spend, spend, spend even more — has made it possible. And so has federal legislation intended to “help.” The omnibus spending bill passed last year prevents the IRS from taxing mortgage forgiveness as income up to $1 million for a two-year period. Some people are bailing because they’ve lost equity and value in their properties; some are bailing for cheaper homes in the same neighborhoods. There’s even a term that’s become popular over the last couple of years — “Jingle Mail” — that describes when homeowners cut loose and mail in the keys to the bank. Ho, ho, ho. The true victims in this “crisis” are those who paid for homes within their means and those who waited to enter the housing market.
As California goes, so goes the nation. The trend continues.
Now comes word from Los Angeles that beleaguered baseball player Jose Canseco has walked away from his mortgage. L.A. Land reports:
Former major league baseball player Jose Canseco…”said on Thursday he had lost his California mansion to foreclosure — one of the first celebrities to publicly admit being a statistic in the U.S. housing crisis,” the Associated Press said.
In comments to the TV show “Inside Edition,” Canseco says, “It didn’t make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else.”
More from the Associated Press: “Canseco, 43, one of the most flamboyant U.S. baseball players until his retirement from the major leagues in 2001, told the celebrity TV show ‘Inside Edition’ that it did not make financial sense to keep his 7,300-square-foot home in the Los Angeles suburb of Encino. ‘Inside Edition’ said it had foreclosure documents showing Canseco owed a bank more than $2.5 million on the house.
Note that he wasn’t forced to foreclose. He chose to foreclose. And many more will follow in his foosteps.
Commenter Patrick at L.A. Land sums it up well:
Steroids and stardom aside, Canseco is not unlike the rest of America: Chronically overspending, knee-deep in debt, lived beyond ample means, relative to the rest of the world. The mortgage mess is a symptom of this very same mindset. There will be more.
This is also right on:
In a Roman orgy, and no mistake abou[t] it, it has been one disgusting, wanton, gluttonous binge, rich folk take off their pants just like the the plebeians.