Posted on 01/26/2010 8:16:22 AM PST by TheThinker
How can you really walk away from a mortgage? Aren’t you still liable? Let’s say I buy a $200,000 home, and put $40,000 down, so that my mortgage is for $160,000. If I walk away and the bank can only sell it for $140,000 at auction, am I not still legally obligated to come up with $20,000 to make up the difference?
Why rent to deadbeats? Just a huge headache and they will trash properties and pay late or need eviction. My friend in Fl.rents her homes and she has huge headaches with it and constantly evicts bad tenants.
Great idea. “Walk away” from your mistakes.
Run up too much credit card debt? Walk away.
That car that you loved, but now not so much? Walk away.
A loan from your brother in law to help with the down payment on the house? Well, you never really liked him that much anyway....
“(quite frankly we would have been better off if the stimulus money went to pay down mortgages in the same way that plastic vouchers were issued to pay for digital converter boxes)”
I agree, even though it would have made me just as sick as it did when the banks got the cash.
By that logic, the banks should foreclose whenever the property is worth more than the loan.
Oh, hey, and we should all just take whatever we want, because it will be ours when we’ve taken it, so it’s okay.
Here is what I found pathetic.. some of those "homeowners" would go to court and ask a judge to extend the time until eviction. The poor judge would say something like.. "you last paid on your mortgage 18 months ago, you have lived there for FREE for over 18 months, and you want ME to extend your time there? Are you nuts? Get outa here.."
All that said, you should see some of the people they gave these huge mortgages too. Some of them couldn't pay for a loan on a bicycle, much less a house, they were people of questionable employability, much less ethicality.. What the frak were lenders thinking?
Yes, plus whatever fees and interest they see fit to tack on. On top of that, if they can show your intentions at purchase were to not pay it back or you fudged anything on your app, you have the potential to be charged with fraud. When you get into this situation, red flags go up and they scour your app for any irregularities.
LOL! I remember shoplifting as a teenager and when a moral pang arose me and my friends would say “were sticking it to the MAN.” There is always an excuse for immorality, and we are really seeing them fly on this thread.
I’m sure some of the mortgage lenders were just stupid, but the government put pressure on banks to make loans easy to get especially for those who were traditionally underserved (and guess what? there is a reason they were underserved!). THEN they gave them an out in Freddie and Fannie. I know the bank my husband worked for could not expand (ie, put an ATM in a new location or build a new branch) if they could not prove they were making home loans to certain communities.
There may be plenty of blame to go around, but it all seems to come back to Cox and Franks, as far as I can tell.
I gotta think that if people buy a home for the price of about $500K but, realistically, could only afford a home that costs $300K and walk away from their mortgage, they should never be allowed to buy another home. When do we hold the buyer responsible?
That depends on what state you are in. Some states are non recourse, ie CA so if you lose the house & the bank sells it at auction, you are not liable for the deficiency as long as the TD being forclosed is a purchase money deed of trust, ie it won’t work for refis.
Strategic foreclosiures have nothing to do with subprime borrowers or easy money. These are buyers who qualified & could afford their loans. Now the loss of equity is so steep, in some places well over $100K, with no chance of recovery in the near future, ie 5 yrs. If we can stop being so judgemental, consider if it’s wise to squander more money & your kids’ money throwing good money literally after bad.
This loss of equity is unprecedented. These buyers are not all deadbeats; they are looking at being burdened with a debt while the property itself has lost 40-50% of value.
Some markets may turn around in a few years, some won’t for decades & not until the voters stop letting libs run things.
If I could walk away from this I would
Just call me J.P. Junta, or Goldman Junta, or AIJ.
There are a lot of people out there who refinanced their house and took out cash to spend..or invest. I don’t think letting them walk away if right. There needs to be limits on the walk aways. Those people who took cash out should be subject to requirements of bankruptcy.
There are lots of people who knew that things were peaking..refinanced and rented the place out. They continue to collect rent after they stopped paying..they should not be able to walk away.
I suppose I never looked at my house as a stepping stone investment, it was a tangible commodity, a real thing over my head that I wanted to own despite some financial numbers showing me right-side up or upsidedown.
So your tagline is just a joke, right?
Why rent to deadbeats? Just a huge headache and they will trash properties and pay late or need eviction. My friend in Fl.rents her homes and she has huge headaches with it and constantly evicts bad tenants.
A lot of these strategic foreclosures are driven by job losses. The borrowers were qualified when they bought, had good credit now have no income or severely reduced income.
Now the property has lost so much value that it can’t be sold & buyer is stuck.
The ideal outcome is the bank & borrower renegotiate their contract, but that doesn’t happen much.
No, but a system of banks, brokers, loose money, appraisers, developers, etc. inflated the costs. If you wanted a place to live you had to pay. It was a national scam. Nothing remotely approaching anyone's genuine notion of a free market.
****That was the contract = no pay no keep house***
Your comments are very logical - for a two-party contract.
However, the Gubmint stepped in with other people’s money and perverted the whole principle of *free enterprise*.
A home is first of all shelter on a daily/current basis. It is secondarily an investment in the longterm. A 5-10 year cycle should not be a basis for forfeiting shelter and lower monthly payments. That is short sighted and financially foolish.
(p.s. where are all these walk-aways living? With relatives and friends?)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.