Stop Paying Your Mortgage and Walk Away?

re: Stop Paying Your Mortgage and Walk Away?

Renee Bidig — Sat, 01 Aug 2009 04:02:24 GMT

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.

re: Stop Paying Your Mortgage and Walk Away?

Chet Heflin — Wed, 25 Feb 2009 06:07:17 GMT

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.

re: Stop Paying Your Mortgage and Walk Away?

Bobby Young — Sat, 17 Jan 2009 18:15:58 GMT

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.

re: Stop Paying Your Mortgage and Walk Away?

Kari Heughens — Tue, 13 Jan 2009 23:33:18 GMT

Is it possible to buy another home after you have gone through a foreclosure?

re: Stop Paying Your Mortgage and Walk Away?

Jim Hanson — Wed, 31 Dec 2008 19:38:52 GMT

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.

re: Stop Paying Your Mortgage and Walk Away?

JEFF WEBB — Sun, 21 Dec 2008 18:24:31 GMT

"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!"

RE:Stop Paying Your Mortgage and Walk Away?

Carefully Screwed — Tue, 19 Aug 2008 11:00:00 GMT

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.

RE:Stop Paying Your Mortgage and Walk Away?

Caroline — Tue, 19 Aug 2008 11:00:00 GMT

Every time I see â€œit all boils down to personal responsibilityâ€, my blood boils!! You people out there who keep spouting this arenâ€™t really LISTENING to whatâ€™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 â€œpersonally responsibleâ€ 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 canâ€™t judge what you donâ€™t know anything about. Lose your job or be forced to move and pay on 2 residences for an entire year or more, and youâ€™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 personâ€™s shoes before dispesning your parroted â€œwisdom.â€ 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.

RE:Stop Paying Your Mortgage and Walk Away?

Anonymous — Thu, 17 Apr 2008 11:00:00 GMT

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

RE:Stop Paying Your Mortgage and Walk Away?

anonymous — Thu, 03 Apr 2008 11:00:00 GMT

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.

RE:Stop Paying Your Mortgage and Walk Away?

Andrew — Tue, 01 Apr 2008 11:00:00 GMT

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.

RE:Stop Paying Your Mortgage and Walk Away?

fractalshift — Tue, 01 Apr 2008 11:00:00 GMT

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!

RE:Stop Paying Your Mortgage and Walk Away?

BubbaJoe — Thu, 20 Mar 2008 11:00:00 GMT

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???

RE:Stop Paying Your Mortgage and Walk Away?

willinFL — Tue, 18 Mar 2008 11:00:00 GMT

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.

RE:Stop Paying Your Mortgage and Walk Away?

Tired of it all — Mon, 17 Mar 2008 11:00:00 GMT

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.