Deck the halls with loan papers: Foreclosure-crisis holiday jingles

Just in time for your holiday listening pleasure, two songs are making their way around the blogosphere, marking another year of falling home prices and an expanding commercial real estate bust. Cheers!

CRE

First, via Mortgage Insider, here’s “The Twelve Months of Default,” which starts with bill collectors and ends with a homeowner finding great rentals and happily walking away from a mortgage. It’s amusing enough as a song, but as the New Year begins, it’s no given that walking away would be the smartest strategy for a homeowner or that it would come with few repercussions.

In fact, I’d expect the ethics and personal responsibility controversies over walking away only to increase in 2010, as more homeowners find themselves underwater on their mortgages and strategic default becomes a more accepted strategy. As one former homeowner told the Wall Street Journal recently, he felt fine sleeping at night, despite walking away from his loan, because he believed lenders manipulated the housing market during the boom by accepting dubious appraisals.

Strategic default is a debate that’s now in the open, rather than a slightly shameful alternative rarely discussed in the mainstream.

   

Next up, courtesy of Mish, is “Oh, CRE,” an ode to the growing volume of rapidly souring commercial real estate loans. It also questions, to the tune of “Oh Christmas Tree,” whether the FDIC really should be encouraging banks to modify troubled CRE loans.

So mix up some hot chocolate, add the marshmallows, sit by the fire and listen in. With high unemployment levels causing even prime borrowers to fall behind on their mortgages, and foreclosures showing no signs of slowing down, it’s the best way to celebrate the season these days.

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