Learn. Share. Connect. (55,967 Members)  - Join
 

Site Tools

Join Now or Sign In
for Full Access to All Features
Mortgage Rates
30 Yr FRM 4.96% 0.01%
15 Yr FRM 4.33% 0.01%
1 Yr ARM 4.12% -0.10%
5/1 Yr ARM 4.09% 0.04%
30 YR Tres 4.58% -0.01%
Fed Prime 3.25% 0.00%

Recent Video

Bartlett Says Bank Lobby Seeks...
March 19 (Bloomberg) -- Steve Bartlett, president of...
Checking Health Care Facts
Getting insight on the health care bill, with Angie...
View more
Receive Free Email Alerts
Stay up to date on breaking news and blog posts with our free News Alert Service. 

Stop Paying Your Mortgage and Walk Away?

by Glenn Setzer on
 Email Page   |     Print   |     Bookmark

The statistics are all over the place, but it is clear that not only are mortgage delinquencies and foreclosures skyrocketing, but millions of homeowners are "upside-down" in their mortgages; that is they owe more to the bank than their houses are worth and a report this week predicted that number would be growing exponentially.

More and more the talking heads on television have suggested that these upside-down homeowners should cut their losses and hand the bank the keys to the castle. Some have even suggested that cash-stretched and equity-poor debtors should continue paying the credit card bills even as they stop paying the mortgage. The rationale? The house is already a dead loss and continued credit card access will help the homeowner get back on his or her feet.

The attitude was unheard of in an earlier day. An obligation was an obligation and there was none as important as the one that kept a roof over one's head. But there is a lot about the current financial crisis that has changed the attitudes of many Americans toward that mortgage payment.

First of all, many borrowers feel as though they were taken for a ride by their lenders; talked or fooled into mortgages they couldn't afford. Even though borrowers were often complicit in the misrepresentation involved in their loans, they feel aggrieved by the process and not responsible for the result.

Then there is the mob rule effect. The media is so full of reports on the foreclosure crisis and there are so many anecdotal reports of people mailing keys to their lenders (CNN Money says it is called "jingle mail") that it has taken on the cover of "everybody is doing it," and many people are.

Well we have said it before - there is no situation so dire that someone can't figure out a way to make a buck off of it.

The newest wrinkle is a company that assists homeowners with the process of walking away from their mortgages. You Walk Away, LLC. asks visitors to its website "Is foreclosure right for you?" and follows up with five questions to help a homeowner make the decision:

  • Are you stressed out about your mortgage payments?
  • Do you have little or no equity in your home?
  • Have you had trouble trying to sell your house?
  • Is your home sinking under the waves of the real estate crash?
  • What if you could live payment free for up to 8 months or more and walk away without owing a penny?

Those who self select - "well gosh yes, that bit about living free for 8 months is the clincher" - and who qualify by answering some simple questions about their situation, are offered the opportunity to purchase a You Walk Away plan. For a subscription that costs $995 the company will:

  • Send a letter to the lender that promises to stop collection telephone calls.
  • Provide subscribers with a free 1/2 hour consultation with an attorney to make sure the foreclosure has been properly filed.
  • Inform the homeowner of the exact number of days he can continue to live in the home payment free and update that schedule regularly.
  • Enroll the borrower in You Walk Away's affiliate credit repair plan which they claim has removed thousands of foreclosures from clients' credit reports.

  • Appoint an experienced You Walk Away advocate available to answer any of the borrower's questions throughout the process.
  • Provide information on state laws that, in select states, will prevent the bank from attempting to collect deficiency money.

It appears that the You Walk Away plan, unlike a Deed in Lieu of Foreclosure, does not stop the foreclosure, just mutes some of the aggravation and uncertainty that usually accompanies it. A Deed in Lieu, if the bank is willing to accept it, may be a more credit history friendly solution and it may be possible to obtain assurances in writing that the bank will not pursue a deficiency.

All of what You Walk Away does is probably legal; possibly it is effective (although the promise of credit repair is always a red flag); but before you plunk down the nearly $1000 fee, please contact a non-profit credit counselor in your area.

One of the questions that you need to ask a counselor is whether, in your state, a lender is able to go after the difference between the value of the house and the balance of the loan. You Walk Away started in California (it is reported to be expanding quickly into other states) which does have an anti-deficiency law, but not all states do.

A list of reputable credit counselors can be found at www.hud.gov, check under "At Your Service" on the home page.

Filed under: , , , ,

More from MND

Comments

Join Now or Login to Post Comments

hilton
on
There are only 2 concerns that one has when considering walking away from a property, ie., destroying one's credit and the deficiency judgment. There is no question that a foreclosure will still allow the owner to stay for at least 8 months - probably more - since the courts are saturated with foreclosures. But this service really helps in no way at all, except giving some peace of mind that you won't be thrown out into the street tomorrow (and I concede that most borrowers do not realize this!) Once you are aware of what is going on in today's market, there are other alternatives we suggest. 1. Hiring a good foreclosure defense attorney will protect your legal rights and actually extend the period of time that you don't have to make payments. 2. A short sale or deed in lieu will lessen the credit hit rather than just letting the property go in foreclosure. 3. In Florida, as in most states, there is no question that the lender may obtain a deficiency judgment (whether or not they pursue it is another matter). In other words, other than giving the borrower the peace of mind of knowing he has some time, he is getting absolutely NOTHING for his $1000 fee. I am not taking a moral stand on whether or not the borrower should stop paying. If he is upside down in the property, it does make good business sense (although we, of course, do not come out and recommend this course of action). The problem I have is that you are getting nothing for the $1000. It costs NOTHING to try and negotiate a short sale with the bank, which would likely dispose of the deficiency. Or, for the $1000, you could stretch out the foreclosure and stay longer without paying - or negotiate a deed in lieu with the bank - either of which is a better (or, shall we say, a more profitable) outcome than simply walking away. As far as credit is concerned, both alternatives are significantly better than allowing the foreclosure. If you have already made the business decision to stop paying, either just walk away and save the $1000 or do it right and actually get something for your money.
BS
on
"Where's the pride?"

What happened to the pride from the other side when corporate america was robbing the consumer blind? I don't feel one bit sorry for any company that is suffering because people are walking away.
Kevin
on
Oh, please. I see these people as the ones who either put very little down or have refinanced to the max and sucked all the equity out and squandered it on junk and now have nothing to show for it. They ultimately have no investment in the property. They are probably the same group that doesn't care if their car gets repo'd. I own rental property and see the don't care attitude alot. And yes, it is the time to buy. I usually am in a foreclosure daily and you would not believe the way these people leave these houses. They don't care if their credit is ruined. The people with bad credit are what fueled the subprime market anyway. They know that a few years down the road they can get another loan, albeit with a sky high interest rate, but that doesn't matter. What matters is just what is here today, if another problem arises they can walk away from that too. It is stated that the majority of foreclosures are adjustable rate loans. Are all these people so stupid that they did not know what this means? I have had one and they are no fun, but I didn't walk away. Mine adjusted up to as high as 10 percent. I sucked it up until I could do something different. That is what these people should do, stop paying your credit card and pay your mortgage. Ride out this storm and times will be better. It has always happened. My parents grew up during the depression and I guess I was just raised different. In fact my father never even had a credit card. Americans are a country of have to have it now. If you don't have the money but have to have it now, just charge it! I think this is a contributing factor that causes people to not be able to pay mortgages. These idiots are carrying balances of 25k or more and what hurt these people is when the minimum payment changed. they can't keep up. They have to have all the other stuff they can't afford. They have to keep up with the Jones's. I, myself have been guilty of this but I pay my bills and value my credit. It boils down to the same old thing, a few bad ones are spoiling it for everybody. Just my opinion, thanks.
Eugenia Renskoff
on
It is a very difficult decision to make. Walking away from your home is not easy, even if there is little or no equity in the home and the monthly payments are overwhelming. Mortgage problems can keep you awake at night and your life becomes sheer hell. Unfortunately, I am speaking from first hand experience. I had no equity in my Atlanta condo. In fact, I had overpaid for it without realizing it. I didn't walk away, but thought about it endlessly. My home foreclosed in November 2005 due to mortgage fraud and predatory lending on the part of the loan officer. My advice is: Don't let it happen to you. Never ever. Eugenia Renskoff
Rockey
on
We are all in for a long term problem if consumers start viewing this crisis as a "Badge Of Courage" when sending 'Jingle Mail.'
George
on
Well, believe it or not, if property is bid on on the courthouse steps by the bank seeking to forclose, they have to bid FMV of the property, and if they do not, then the judge does not grant them a confirmation. Here is an example: Property is valued at 240,000 (per appraisal) Borrower owes bank 200,000 Bank knows it can only get 180,000 for the property (true fmv). If the bank bids for the property at 180,000, then attempts to get a confirmation from the judge for the 20,000 deficiency, the judge will not grant the confirmation, because in his eyes the bank bid under the fmv (per the appraisal). In this case, the bank can't go after the borrower at all. So what is expected to happen is the bank bids (and puts forth) 240,000, gets back the 200,000 it is owed, and the sheriff hands the remaining 40,000 to the customer (his supposed equity in the property). The bank can now get a confirmation to go after the customer for 60,000 - 40k of which the bank handed to him. Obviously, this type of situation arose because banks started giving 100% financing, and property values stopped rising. If banks had stuck to the 75% LTV, there would automatically be a built in reserve to accomodate such declines in value. My point is this: People are indeed walking away, and even in states with deficiency provisions, it is very difficult to go after them.
Ryan D Bolton
on
It really is sad to hear that people that signed a note, knew what they were doing, signed all those documents at closing, are just walking away. That hurts every one. What happened to the days when you signed on the dotted line and that meant something. Where's the pride? How do we trust borrowers if that means nothing? What will happen to all "credit" if everyone just walk away? Keeping in mind that over 80% of homes are current and paid on time, I would hate to see most of us that are upside down just walk away and say, "Well its someone else's problem, I'm not the one that going to lose money." That would be like saying, "Well my home increased in value so much over the last 5 years that I'm going to give some of that back to the lender that gave me the loan." There is a lot of bad press out there and it will take even longer for the correction with the "Selling of News" involved but I hope people will take some pride and responsibility and ride out this storm with the rest of us. Real Estate doesn't go through these cycles every often or for very long so don't wait to buy real estate, buy real estate and wait!
charles glaser
on
True forclosures are rising everyday. Alot of them could have been prevented in the first place . With a simple refi. I know I did a refi , and now have a fifteen year note with a great rate. I also have rental property that is doing very well . World academy of realty / June /22nd / 2006
charles
on
If your prejudging me your dead wrong . I have over forty thousand in equity in my properties . Excuse me I put down 20% on my investment property . Although Kevin I do agree on alot of what you said. I just had the money to invest. Charles
Nate
on
Every state is different. A deed in lieu is a "voluntary foreclosure" and is as bad as a foreclosure, it benefits the lender by saving time and money. It benefits the seller by getting rid of a problem property. The only way to save face is to try and obtain a short sale. Deficiencies are very hard to obtain and if the lender chooses foreclosure by advertisment they waive thier deficiency rights, at least in Minnesota. Everyone is to blame for the problem we are in. Borrowers took out too much credit and did not educate themselves. Lenders came up with way to risky programs and brokers (both mortgage and real estate) were hungry for $$$ and put aside their better judgment.
carol
on
I disagree with some of the comments. I live in Nevada and bought our home with a 20% down payment. We bought in 2004 for $300,000. Value went up to $325,000. Now due to the credit mess here in Nevada and elsewhere, our home is valued as of last week $189,000. Every house but ours and 1 other was an investment property, so they walked away. Now the banks are trying to sell as fast as they can and they do not care what they get for it. Min. bid on a house just like ours is $89,000 and it sold for $ 150,000 last week. So now our home is worth even less than before.So now we are upside down on our mortgage. I think a lot of the falling value is due to banks taking what they can get and so what to home owners.
Caution
on
Though the state of Califorina might prevent a lender from trying to collect the deficiency balance, and the federal government allows you to not be taxed on the 1099 you're "going to receive" from the lender, the "State of California" however, says, pay up! The state DOES expect you to pay the tax due on that deficiency balance shown on your 1099.
Anonymously annoyed
on
Regardless of why you walk away and whether or not there is any legitimacy to your walking away, you need to vacate once your decision is made. Do the right thing and offer a deed- in-lieu of and move your life forward. You may or may not have a legitmate beef for your decision to walk but you do not have a right to a free roof over your head. If you truly feel walking is in your best interest then do so with dignity. Regardless of any wrong doing you believe you are suffering, two wrongs don't make a right. Wall Street, the GSEs, lenders, loan originators, bankers, realtors etc. will continue to take their public thrashing. Are you willing to take yours when you decide to live free in a home you have no intention of paying the mortgage on?
Carlos
on
No you don't have a "right" to something just because someone else can afford one. That's called envy. You can be wealthy at 45k a year, but you chose not to be. You just have to live within your means and quit buying things that are worth nothing on credit. Start with the house you can afford, think of creative ways to finance a house that is smart and don't be stupid like the people walking away from their homes. Their decisions got them there in the first place. Don't follow after them. You have the "right" to freedom and the pursuit of happiness. That doesn't mean you are "entitled" to them. With those rights come the responsibility of doing what's right to obtain what you want. That's why all these people buying houses with interest only loans so they can live in a huge house that they normally can't afford get in trouble.
rick
on
George - how can the appraisal, in your example $240k, be correct if FMV is $180k? Any banker with a brain would use an appraiser who values the home as a distressed property at time of foreclosure. No one uses the original appraisal from origination.
anonymous
on
Why walk away? Since in many cases no one knows where the note is just stop paying and challenge them to prove they own the note! If they have it you are no worse off.
anonymous
on
What happens if the Fed starts taking mortgage backed bonds as collateral and the banks default. Will the Fed foreclose?
Tuma
on
See what you people did? Now i'm looking for 700K house on my 45K job and no one would give me a loan? Don't I have a right to a 5 bedroom colonial as everyone else?
Anonymous
on
What I am more confused about with this whole situation is the Banks rational. I have a home that I fell behind in payments, I found a buyer ready and willing to purchase the home for 205,000. on a short sale, (property was purchased for 265,000 a year and a half prior) the buyer had the loan ready to go, well the bank refused to go lower then 254,000. The homes are selling for 220,000 to 235,000 in the neighborhood. The bank foreclosed on the home and I just found the home listed for 275,000. What are they thinking?.
Anon
on
Well, screw the banks and the fed for backing this crap to begin with. Lets just print more mony and inflate the economy even further. It's the Fed Reserve way! CROOKS
Chuck The Loan Officer
on
One of the biggest problems is that the home owner is sometime to proud to seek help before its to late. I have come across so many homeowners that will listen to the guy that runs the 7-11 store before they will listen to me. And believe me, I know that most home owners are more afraid of Loan Officers than Bankers, but the funny thing is that the banker will cut you faster then an L.O. And the worst part is when they check, Loan Officers will always give better rates than any bank! Guess what people!!! The very same bank that just turned you down for that $700k loan is the same bank I JUST GOT YOU'RE LOAN TO GO THROUGH!!! Hurts DON"T IT!!! If you can find a good L.O. that knows what he our she is doing, they can get your loan done. Don't just walk away from what you worked so hard to get. Find the right one to help you. Oh! And please stop all the doog gone free- loading thinking you people with jacked-up credit are to get something for nothing. you mess your stuff up so why should you feel that you're closing cost should be free? You jacked it up? Shut-up and pay the person that just kept you from being homeless. (This is just one L.O's way of thinking) We have to eat also.
JazLive
on
If one gets 8 months "free" will that be taxed as "income" in the following year? If mtg pmt was $1,200/monthly = $14,400 liable to "income tax"
Tired of it all
on
My idiot brother in law lost his house last year. He had it for almost 30 years, but what he had done was to take all of the equity out and spend in on junk. Now he lives in a two bedroom rental and acts like all is well. Such a fool, but I am discovering that he is not alone. People, your house is not a piggy bank, nor should it be treated like an investment. Live in a house to make it a home, not to make you rich.
willinFL
on
Part of the problem is the BPO's and nugget appraisers that were contracted for the REO's. I have performed reviews on over a thousand here in southwest Florida, and the total lack of knowledge, and ignorance is just outstanding! BPO's 30 to 40% over real value, agents neglecting to report "Cumulative Days on Market" which would expose just how long it really takes to sell something, and price reductions. And appraisers ignoring sales (like within 30 days, and several blocks), pendings and listings, to come in at a value $100 k over what the property finally ended up selling for. What else would you expect from a "shake and bake" appraiser that only does the minimum to obtain and maintain a license, whatever state. Lenders got what they deserved. dumb down the business, garbage in, and by god, garbage out. Curiously, the real estate agents and such are silent, only telling people to buy. Not a lot of confidence in the buyers though. starting to see "double bottom" reo's already. And I thought living through the S&L/RTC fiasco would be enough for one lifetime.
BubbaJoe
on
We bought our home in 2001 for $145K. It was apprasised on 2006 for $425,000 We took out an equity loan of $100k for some home improvements + operating capital for our business. Our business tanked in 2007. We tried to refi in January and we were told our home is only worth $350k. We owe $360k. Now our home is worth $255K What would you do... walk away???
fractalshift
on
what would happen if banks were no longer permitted to securitize mortgages? wouldn't that put an end to the whole fast money game? If they had to live with those loans for 30 years they might be more careful who they lend to... Having worked in the finance industry for a long time I have always marveled at how banks can take a perfectly good business model and loose money at it...are bankers the worst business people ever?! Or is it like the bible says "..neither a borrower nor a lender be"? They get money in they loan money out and they make money on the interest rate spread...how can they lose so consistently? Fascinating!
Andrew
on
OK you guys feel free to chime in if you wish but in my opinion the gov is trying to prune the top of the tree rather than fix the roots. What I mean is they are concerned with foreclosure this foreclosure that and yes I agree they need to step in but what they really need to fix is the way credit reports. We need a more standard system of how and when credit reports so that consumers can better understand. I mean if someone handed a consumer a sheet that said apply for a car loan and your scores goes down x amount of points for x amount of time people might think twice before applying for every line of credit they can. I guess my main point is if people know the workings of something they can better manage it and it would seem to make more sense if we started with the basics.
anonymous
on
I read a an article about a speach on a gov website? someone in the government, I can not name him unless I can find the article to remember exactly who it was, but he is very well known. Shortly before all of this mortage mess really came down. He said the government had a plan to aquire a good amount of property. I hope this is not true. I hope I am wrong and possibly crazy. If this is true, someone needs to act quickly.
Anonymous
on
WOW! how did these people get to this point? I mean really we are all adults ( i hope) HOW did you not know after signing 145 different papers that you'd be resposible for the financial obligation you intiated.. chances are no one forced you to buy a house (condo, townhouse, shack whatever) you did so willingly. How in the world did you NOT know the rate was going to adjust? what did you think ADJUSTABLE RATE MORTGAGE meant? LMFAO the worst part is an arm 5/1 was only slightly lower than and arm 7/1 or 10/1 most idiots went for the shorter term 5/1 ARM! i swear here in the Wash DC area is was like 5.3 for a 5/1 ARM and 5.5 for a 10 year ARM in the year 2006 at least if your going to gamble take the longer term? DUH! i dont think the government should bail out a soul.. if you are TRULY that stupid you need to lose your house and have bad credit for the rest of your life..and if you fall for this WALK AWAY LLC nonesense you obviously have not learned from the 1st 25 mistakes...I'm in the wrong line of work. LEGALIZED SCAM ARTIST should be a major in college forget business administration LMAO
Caroline
on
Every time I see “it all boils down to personal responsibility”, my blood boils!! You people out there who keep spouting this aren’t really LISTENING to what’s being said. You are short-sited, out of touch, and apparently have NEVER suffered a financial melt down in which you have to choose between feeding your family and paying an inflated mortgage on a house no longer worth the contract its written on. I'm not talking about the greedy losers trying to buy more house than they can afford or who didn't read the fine print, but the honest folks who bought within their means, and are now in a sinking ship with no end in sight. Buying a home used to be something you do with pride and you kept your obligation and paid the mortgage note on time. Its a different world now. Fannie Mae and Freddie Mac got greedy and out totally of control, lavishly lining their own pockets and causing a huge financial mortgage crisis in this country. Add the rising cost of everything, and the lives of good, hard working people who did not fall for the fancy ARMS are going down the toilet. The people you snide about are having to make serious life decisions, and when they say they say to you they are walking away, they are trying to tell you that they have done everything they can to be “personally responsible” and look good in the public eye. For them, at some point, enough got to be enough. You have to stop being a moral robot, make a difficult business decision and write off bad debt, like banks and big corporations do on a daily basis. They are taking a big hit, its not free of troubles, but its often their only choice. As a society, we're programmed to do the "right thing" and we're publically judged by people who know nothing about our struggles. Why do you hold an individual at such high standards when (1) you have never had to deal with that they are dealing with, and (2) all bets have been off since 2007!??? How long would you be dumb enough to keep paying on something when you will NEVER get your investment back before you just say, that's it? Give them a break! You can’t judge what you don’t know anything about. Lose your job or be forced to move and pay on 2 residences for an entire year or more, and you’ll be singing a different tune, my friend. The stress isn't worth it. And worrying about your opinion is definately not worth it. Walk a mile in a person’s shoes before dispesning your parroted “wisdom.” My husband and I have been paying on 2 residences for a year now. We have a lovely home we left behind to move for his job, and because every other home in that neighborhood is for sale, we can't get a bite. We are stretched tight every month with bills, and sometimes have to make decisions on what gets paid. We are being responsible, but believe me, when it becomes enough, I won't be worrying about YOUR opinions.
Carefully Screwed
on
We were careful. We were trusting. I thought we were informed. We were screwed. We purchased our first home 8 years ago for $121,000. It went up up up to $265,000. During this time yes, we refinanced to lower our first time homebuyer 'high' rate and took a small amount of cash out for upgrades. We put our home up for sale two years ago. It fell out of escrow three times in nine months and we finally gave up. Took it off the market and refinanced to upgrade our 25 year old kitchen, bath and a new roof...figuring we would be there a few more years. I knew that the market was slowing, I knew that it was dropping. When we got the loan, the loan officer was trying to get us to take out more more more $$. I had to tell the guy EVERY time I spoke to him that I had to leave at least 25% equity in my home. He kept saying we qualified, I got more stern saying I didn't care, I didn't want to pay pmi and I wanted to protect our family from going upside down. His appraiser miraculously came in high enough for us to take a little more than I expected. I was not allowed to review the appraisal before I signed, trusting that the lender would not fund the loan if the appraisal didn't seem accurate with the new real estate environment. We signed and invested the money into our home. Just two years later, our home is now worth less than we paid for it 8 years ago. We owe DOUBLE what it is worth...I built in 75% ltv, it dropped 70% in just two years. Who could anticipate a drop that significant? It is this low because of forclosures in my market just like everyone else. People walking away. People buying up rentals and walking away and others like myself, I am sure. This is my first home. I do not want to lose it. When the lender says your loan will be 9.5% in December, and your home is worth 50% of the loan. The max interest is 14% which it will no doubt reach before I make up 50% value. I see no other way. I do not wish to contribute to this mess, but I will not pay double. The lender will not work with me. Will not fix the rate without a hardship. We do not qualify, we make too much money. We were careful to live well beneath our means, and because of it. We must pay double, because we can? We are screwed. I understand the harshness of some of these posts. I agree to a point. But not everyone jumped on the banwagon. Some were cautious. Some, like us, live in neighborhoods who's median income is less than half of our own, maybe even less... trying to be cautious. Please don't lump all of us together. I was careful, I was informed, I was not living even near my means, let alone above, I got screwed and I'm sure I'm not alone.
JEFF WEBB  |  Contact or Connect with this Member
on
"I'll walk the line! " Yes I signed the dotted line and was ready to pay my obligation, but when I see what really happened to my loans on Wall Street, banks that bundle home loans into securities and rebundled as A+ loans and sliced and diced sold over and over. Where is my million-dollar severance package for walking away like some of the banks CEO's that are being bailed out by our government. I live in Florida I'm overtaxed and over insured. I bought a house within my means. I did not take out all of the money but did rehab my house so I could live in it for years to come. My house is not worth what it was three years ago with holes in the walls. So, yes "I WILL WALK THE LINE!"
Jim Hanson  |  Contact or Connect with this Member
on
I bought my house new in 2001. Paid $108,000. Refinaced 1.5 years ago when it was appraised for $310,000. New loan was $210,000. Figured I had $100,000 equity. House is now worth $140,000, with no buyers anyway. I live by myself, divorced, kids in college, and a credit score in high 700's. Mostly all of my decent neighbors have bailed. Now my neighborhood looks like Tijuana. I have no trouble paying my bills but I don't want to stay. My dad whom always prided himself in good credit and paying your obligations, told me to walk which surprised me! I would but I don't want to damage my credit. If I could buy another house before bailing, I would but I was told the banks are aware of this and it would be hard to get a renter if I wanted to keep the property. This is my fourth house. I never thought I would be thinking of this, but why should I be left out when everyone else is doing it? Should I be one of the few to get screwed because of pride? Its every man for himself. The banks screw people they need a taste of it.
Kari Heughens  |  Contact or Connect with this Member
on
Is it possible to buy another home after you have gone through a foreclosure?
Bobby Young  |  Contact or Connect with this Member
on
Like some have stated above, not everyone hurt by this was nieve and undeserving to get a loan. Many have been hurt by the greeedy a$$ banks who gave loans out like hotcakes to those who did not deserve in order to line the pockets of top Executives and CEO's. They saw the real estate boom as a get rich quick scheme without thinking of the consequences. So as a result, those who shouldn't have gotten a loan in the 1st place couldn't afford the payments (as expected) and low and behold the Housing Markets take a nose dive. Now people like myself who shell out a ton of money in interest payments to the bank for the mortgage are stuck holding a complete liability that will not recover for many years to come. I purchased my home in 2006 for $338M on a 30 yr fixed mortgage. In 2 years it has dropped about $40M-$50M in equity and would be lucky to sell my house for $290M. I owe $313M on mortgage which makes me unable to qualify for a mortgage refinance given the upside down value and it sure as heck would not sell for an amount to break even. So I am stuck with a continued high monthly payment (6.50% rate) and told too bad from the bank, while others are getting bailed out by not paying their mortgage and the bank in return either giving a lower rate or writing off some principle as a loss to lower the outstainding loan. I am with Wells Fargo and to qualify for a lower rate I would need 3 months of missed payments. Completely aggrevating and I am almost to the point of telling the bank to go screw and take the house on the short sale as it makes no financial or business sense to keep paying money for a sinking ship. (a sinking ship the banks help create) So as mentioned, not all involved and contemplating a short sale, are those people who took out adjustable rates or undeserving of a loan. Some got screwed and continually get screwed by the bank's complete greed in the first place to lend to everyone and anyone which started this whole mess.
Chet Heflin  |  Contact or Connect with this Member
on
Perhaps walking away is o.k. when true mental and physical hardship is involved. I'm willing to spend money for a real estate lawyer. I want legal protection. Maybe I don't need it? I live in California, so I shouldn't get a deficiency judgement from what I've read. My credit is poor, so I don't see what I have to lose by having a forclosure on my credit report. Perhaps I won't be able to rent with a forclosure on my record. Again, I'll talk to a lawyer. Maybe he will tell me to rent first, then default on my mortgage. I get 30 minutes of free time with a lawyer already as a teacher. I'll start there. I've been current on my loan for 20 years, never missed a payment or have been late, but am just sick and tired of the neighborhood and the years of bad memories living in my home. I honestly don't have the energy to execute a short sale do to a recent heart attack/quintuple bypass. I'm 100K upside down do to years of poor health and a wonderful but streesed out wife do to my health who really messed up the payment of bills. I don't blame her. She arranged a debt consolidation loan through Countrywide twice. It never improved our situation in the long run. I don't see an ethical way of unloading the property. I also don't consider defaulting on my mortgage loan unethical at this time.
Renee Bidig  |  Contact or Connect with this Member
on
I live in Detroit. I have lived in my home for 23 years. I purchased my home by a 15 year land contract, and when the balloon payment came, I got a mortage for half of what the house was assessed for (which meant I would have considerable equity in my home). I have had my house up for sale nearly two years and had one person look at it during this time. My husband was attacked by three men at a nearby gas station about two years ago. I thought maybe it was just a one time occurence and things in my neighborhood would be just fine. Two months ago, my neighbor was held up at gunpoint at the same gas station (right down street from my house). This past week my house was broken in to. The theives broke my bedroom doorwall, glass everywhere, all my jewlery stolen, and left the rock they threw to break the glass on my couch. (My neighbor said this was a mockery to me). I have two dogs which they fed in different rooms. I am now terrified to stay in my own home. What if next time, someone breaks in and they have guns? I don't want to live in this neighborhood any longer. I have excellent credit and I love my home, but not what my neighborhood has become. I have hired another real estate agent to try to sell my home, but so many homes in this neighborhood are selling for $20,000 and less. I will probably never get what I owe on my house, and from the past experience no one will probably buy it. So what choice do I really have? My house is very nice inside. My husband and I have made many updates. But I'm I supposed to stay here because I'm obligated to? Or do I think about our safety instead? I have been agonizing over this decision since the break in. I have cried myself to sleep. I feel guilty, but I've been told by a lawyer that I shouldn't, as I did not make the economy's situation. I do know I'm not going to stay in my house, and if it does not sell, well I'll just go from there and my excellent credit will take a huge dive and I'll probably feel bad about this situation for a very long time.
Dave Parsons  |  Contact or Connect with this Member
on
Anyone that thinks its the greedy home buyer that created this housing fiasco is very naive. The goverment spawned this bubble in 1977 with the community reinvestment act. The Clinton admin.,Janet reno threatened banks to make loans or else. This is all documented and then the banks cut loose feeling they were invincible since they were backed by fannie mae. We were all dupped thinking this was an honest housing market. The housing demand was fictiously created by the government policies and the greed of the banks and mortgage companies. Now here we are in the stratospheric housing bubble.The people with properties requiring jumbo loans will surely go broke serving the fictitious mortgage. Some have spent everything including their 401k on these loans.They are running out of moany everday creating more foreclousres everyday.This is happening in a big way to the jumbo loan people since they are are almost impossible to get. So there is very little sales possible.The beat goes on. How can this be good for America? people every day going broke or too scared to buy anything since all of there money must go to the mortgage. With all the bogus bailouts going on. Would it not be better for America for the banks and Gov reduce the outstanding loans to their real value. The people could sfford their homes and buy other goods as well. I just cant understand why americans are taking this laying down instead of getting together to fight the gov and banks that obviously caused this bubble. lets get together , in numbers we have power, Individually lose all of our money. Dave Parsons
Home - About - Contact - Sitemap - Disclaimer - Privacy Statement - Advertising - RSS - Link To This Page

All Content Copyright © 2003 - 2010 Brown House Media, Inc. All Rights Reserved.
Reproduction in whole or in part in any form without the express written permission of MortgageNewsDaily.com is prohibited.