"Gives me more time to be with the kids." These are the words I hear out of every single father's mouth after they've gone through a foreclosure and moved to a rental. Anecdotal? Sure... but I interview people by the hundreds, and hear a lot of anecdotes.

There's no surprise...

The wealth of a nation continues to drain from middle America into the vaults of Wall Street. It is time to set aside 1970s moral values, and stop paying debts on underwater homes and overpriced credit cards, because America needs your money to build a new economy.

The misuse of...

Criticism of Occupy Wall Street protests is so anecdotal and insubstantial that you have to wonder if Ronald Reagan is speaking from the grave. This is a brief guide to the realities behind the mainstream spin.

LIES

Many of the "so-called protesters" are actually attending ritzy universities.
So what?...

Many media outlets continue to portray the OWS agenda as vague, despite the highly specific demands on protestors' placards. The book "lending library" at the Occupy San Francisco encampment in front of the Federal Reserve building on Market Street gives the lie to that spin.

Growing up in a diplomatic family you learn to keep your nose to the wind, and read the writing on the wall, in case political turmoil suggests a flight for the border. The skills were useful doing business in South America, helping me skip one step before revolutions started.

In...

For ten years I've worked out personal finances with families and singles in trouble. The numbers usually scream "walk away!" Most people don't -- until they're financially ruined. This is why you keep paying -- and why you are not morally obliged to pay.

Bear with me for three paragraphs.

I do not know how political sage Niccolo Machiavelli, author of The Prince, would have estimated the OWS prospects of success. However I am certain of the warning he would be giving the ruling class, the one-percenters: they are pushing the people too far.

Like most...

The "moral hazard" is worse than you feared: Americans are figuring out that morality changes as society changes, and that morality no longer includes obediently paying the mortgage. So do you want to take your haircut by mortgage principal reductions -- or foreclosures?

That is, are you ready...

In 2008, walking away from a severely underwater home was the ideal financial choice, in hindsight. In 2012 it may not be, because banks are starting to knock down the principal in some cases. This is about the leading trends.

Had people known the perfect game plan for an underwater...

On radio, I am still asked about the morality of walking away from an underwater home -- but the question is fading fast. By mid-2012, the question will be "Who wants to be the last American paying down a $400,000 mortgage on a $200,000 house?"

More accurately, perhaps, the question...

Several of the big banks will now take the initiative after you miss two payments in a row, and offer either a short payoff deal or severely reduced interest rate. You don't have to call them; they send the offer to you.

This is not guaranteed. Your particular bank could...

The standard justification is that "It's in the contract that the bank gets the house if you default." Actually, that clause is legally a remedy to a worst-case scenario -- not an expected part of the deal. There are three much stronger justifications.

The first is legal and moral: fraud....

The bankster propaganda machine relentlessly grinds out the fear-laden hype: your credit will be "ruined for seven years." Your credit will be "wrecked!" But as Russians say somewhat wearily about economic propaganda, "That was a long time ago ... and it was never true anyway."

Credit being "ruined" doesn't really...

I open and close a lot of bank accounts, and things have changed in the last three years. You can smell the fear when the branch manager comes over to pump your hand for a $1,500 opening balance, and you can't close out an account with a $4.26 balance without...

News frequently portrays inability to rent as one of the gloom-and-doom scenarios awaiting people who have been through a foreclosure. In my surveys around the U.S., I'm not seeing this, because the vast majority of people who have walked away from a mortgage are considered desirable tenants.

Basically, the Big...

A recent report by the U.S. Dept. of Commerce calculates that $67 billion a year less in home interest payments are being made than in early 2008. Many observers believe that this drop is primarily due to home walkaways, and that the cash freed up is largely flowing...

FICO's discovery that strategic defaults tend to be carried out by people with excellent credit is not fresh news.* What is bizarre is that they publicized it, since reporters poked into their whitepaper, and now there are hundreds of articles online which provide road maps to...

An April 19th Huffington Post article describes Americans taking lower-paying jobs after layoffs. We saw the same thing in the San Francisco area when the dot-com bubble burst, and the best survival plan was identical: find almost any job that pays more than minimum wage, before your savings...

A Trulia/Harris survey in 2010 found that 57% of men would consider strategic default, but only 40% of women would. In the real world of mortgage default, where walkaways are far more often for survival than strategy, I found the opposite. Here's how it plays out.

Taking one...

A "strategic default" currently means walking away from an underwater home even though the owner could afford to pay the mortgage. However, this represents far less than half of walkaways. The vast majority of foreclosures happen to people who cannot afford to pay the mortgage.

Portrayals of strategic default in...