No Kidding: “The only thing missing from the party is the U.S. worker and consumer. ”
By Daniel at 30 August, 2009, 8:37 pm
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Here’s some sage “advice” from Janet Tavakoli concerning mortgage debt vs credit card debt.
Banks may be hurt as more consumers realize they would be better served by paying off their credit- card balances than making their mortgage payments, according to Janet Tavakoli, an industry consultant.
“Even in bankruptcy, it’s hard to clear away that debt, but your house, that’s non-recourse, meaning you hand over the keys and walk away, in most states,” she said. “Even better, some banks are so far behind in foreclosures you may be able to stay in your house for quite some time. What happens to banks? They’re stuck with a house they don’t want, and that 30 percent credit-card interest they were reporting instantly plummets.”
The loss of customers servicing high-cost plastic will rob banks of a key tool used to offset rising credit-card defaults, she said. In July, U.S. credit-card charge-offs, or share of the debt deemed uncollectible, were 10.52 percent, down from a record 10.79 percent the previous month in the first decline since September, according to Moody’s Investors Service.
http://www.tavakolistructuredfinance.com/bloomberg38.html
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