Playing "Screw your Neighbor"!

"Today we have a different way to play screw your neighbor. And it is not a game. In fact, it can be very costly to everyone in your neighborhood."

Some of you older folks might remember a popular card game in the 1970's called "Screw your Neighbor". It was a nasty card game, and truly every man (or woman) for him or herself. It was so nasty, it almost put a dent in my very young marriage. In fact, after a short while, my wife refused to play it with me anymore.

Today we have a different way to play screw your neighbor. And it is not a game. In fact, it can be very costly to everyone in your neighborhood. In the picture above, is just the latest of the abandoned homes in our area. The couple lived here since the get-go, raised their kids there (our daughters would pet sit for them), and then all of a sudden, they were gone. Walked away from their mortgage. Let the bank have the rest of the mortgage and the house.

The place looks like crap. The grass has not been cut this year, what little of it is left has gone to seed and weed, and the house itself looks very uninviting. Meanwhile, the people living next to this house had theirs on the market for just north of $400k. To say the least, it is no longer on the market. They pulled the for sale sign down. Until this abandoned house is bought and cared for, selling a house nearby is a lost cause.

I really never have quite understood this new game. How someone can live in a house for 20 years or more and then decide to walk away with nothing to show for it except a big hole in their credit report. Seriously, I don't get it. A friend of mine who was a banker many years ago told me the last thing a bank wants is your house back. They are not in the real estate business - only the financing business. They will bend over backwards to help you either work out of a jam, or get your house sold before foreclosure kicks in. Foreclosure is always a lose-lose process.

I know some have said this is part of our new reality. Just like having almost 100 million out of the work force. Or almost 50 million people on food stamps. Or a national debt of almost 20 trillion. All these things, including foreclosures, have crept up on us over the past eight years. We have been like frogs in slowly boiling water. We did not see how massive this change was until it was upon us. And now that it is here, is it here to stay?

An old neighbor of mine walked away from his mortgage also. He did not default, he did a short sale. Stuck the bank for almost $100k. I asked how he felt about it. He said he was good with it. It was the bank's fault for not helping him more. I asked him what would happen if we all did that. His response - the system would collapse. On the point, he and I did agree.