Posted on 01/31/2010 7:57:46 PM PST by TigerLikesRooster
I'm walking from my underwater mortgage
By JANET SPEER
Last Updated: 7:34 PM, January 31, 2010
Posted: 4:34 AM, January 31, 2010
I stopped paying my $1,450-a-month mortgage on my 200-year-old, four-bedroom home in September 2008 -- after making the hard decision to walk away from my mortgage because it is hopelessly underwater.
It is not an easy decision to walk away from your home, and in the beginning I actually felt like a loser. That was the hardest part.
You see, I was raised to live up to my financial responsibilities. I was taught plenty about personal responsibility. But in this case I had no practical solutions to my financial dilemma -- I lost my job, was turned down for a mortgage modification and owed a lot more than the house is worth.
I WOULD RATHER FIGHT THAN SWITCH HOMES
I am a single parent with three children, one with medical issues. So, with only unemployment benefits and child-support money, I decided to pull the plug on my mortgage payments.
(Excerpt) Read more at nypost.com ...
Good luck..I’m in the process of buying (hopefully) a condo in a short sale. It’s a really long, frustrating process. I’ve learned so much about the dark side of all of this...and who is making money from all of this. It’s been over three months..but there’s good news. I think I’m going to get it and I think I’m going to hear tomorrow. It’s a good deal, but be prepared for a long, drawn out process.
http://www.calculatedriskblog.com/2010/01/is-this-really-walking-away.html
“First, “walking away” usually means the homeowner can afford to pay their mortgage, but are choosing to strategically default (or in the language of servicers “ruthlessly default”) simply because they owe more than their home is worth.
This homeowner lost her job and has other financial issues. Yes, she owes more than her house is worth, but this sounds like a normal foreclosure caused by financial distress.
Second, why is her mortgage payment $1,450 per month on a $154,000 mortgage? Is that a 10%+ interest rate? Is this PITI? Is there a 2nd with Tony Soprano? Perhaps the reporter could have explained this a little better.
Third, if she stopped paying her mortgage in September 2008, what has the bank been doing? “
I am 52 and have a 16 year old son and 13 year old twins.
This financial crisis is going to produce many lessons learned. Be glad you are the observer and not the subject of the lesson. The failure is so widespread that it will cost the government and lender more to prosecute then recovery of the losses. Since this nation does not have the will to go after the borrower and do not want to distabilize the financial system for prosecuting those who caused the financial collapse and reckless schemes, we will end up doing what most people with money do when they are ripped off, take the losses and take the lesson to heart.
That’s legal.
Just immoral.
This is semi-vanity. Note in the “planted” article she had help. The company that “helps” charges $1,000 for advice and uses these planted articles to get clients. I’m a mortgage broker with a site devoted to trying to provide information free to people genuinely in trouble with their mortgages. If the moderator permits, http://www.foreclosurebooklet.com
Apparently a person doesn’t. Not anymore.
The bank is the bad guy? Not when John Q and Jane W American Taxpayer are gonna take it in the pants. The bank didn’t take care of it, they forfeit their cut. Bulldoze the house, salt the property, sell the homeowners into prostitution and the pets to the local Korean b-b-q.
It ain’t just the deadbeats not paying the mortgage. The banks know they aren’t going to be held responsible either. Anybody remember Resolution Trust? For every penny that goes to the banks, another penny should go to build statues of John Dillinger and Bonnie and Clyde in front of every bank.
She originally bought at 100K, then did a cash out refi for 154K, over 50% increase!!! (at 11% interest, apparently). In all of these sob stories, I have never, NEVER read a story that didn’t involve a cash out refi. If she would have kept the 100K loan, she would have equity, since her home is now worth 120K, and probably a much cheaper note. (even if the interest were the same, 11%, 100K for 30 years is 952, vs the 1450 she is paying now).
I love the part where she said that the appraiser told her the house was worth $154K, but she didn’t believe it, but still took out a loan for the entire appraised value.
I know some bankers and they say that they let people stay in their homes these days because they think the homes (assets) will be better cared for. No pipes freezing and bursting, no homeless people or drug users breaking in and taking over. They cannot afford the security that would be required to check on every home with any kind of regularity.
Nope, that probably would not have happened. The 2005 bankruptcy “reform” law effectively made non-secured credit card debt more difficult to discharge in BK than a mortgage. Student loans are no longer dischargeable at all.
So the net result is that the banking industry set themselves up for this - that mortgages end up being the easiest debt to walk away from.
I have friends who are Real Estate Agents. According to them, this has been going on for some time.
DING!!!
DING!!!
DING!!!
DING!!!
ruefully
Not only is this woman a common deadbeat, she can’t do simple arithmetic.
Too bad that she and her family trashed the house wile they were there. It sounds like they didn’t do even the most basic maintenance and she is a textbook example of someone who should never have been in that house in the first place.
I’ll bet the neighbors will throw the new owners a BBQ...either that or they will burn the place to the ground as soon as they leave...
What you say is true.
It is also true that over the past two decades many Wall Street private equity firms have purchased viable US companies, stripped the cash and other assets out of them, significantly downsized the employee base, leveraged the company to the hilt, and then left the banks and other lenders holding the bag while they walked off with billions. The losers — employees, banks and investors, localities, and the US economy. The list of companies looted and destroyed by these companies is endless. In many instances they looted the pension plan assets as well leaving the federal government holding the bag when the company filed bankruptcy. The way these deals are structured the private equity partners have none of their personal wealth at risk — these companies are structured as independent entities.
Unfortunately the misbehavior of Wall Street is causing the average citizen to wake up and say why should these people be protected and bailed out when I have to suffer. When private equity raiders strip the company employing me, it is I who lose a job and my pension plan. It is my community that pays the social services to support the employees let go. It is my taxes that pay to bail out the banks that made loans to people with more credit and it is those same banks that then turn around and pay their executives billions in bonuses while I’m living paycheck to paycheck.
Rightly or wrongly, the average citizen who believes in the Constitution and capitalism is fed up not only with government but the financial elites as well. No wonder average people who a few years ago wouldn’t have considered be late with a credit card payment are now seriously thinking about walking away from underwater mortgages. I live in Florida and have two neighbors who have done exactly that. They were small businessmen who played straight but now feel the government, big business, and big finance are out to take advantage of the little guy. In their minds walking from their mortgages is payback.
The moral fiber of this nation has been destroyed by the immoral behavior of the elites in government, business, academia, the legal profession and Hollywood. We were once a God fearing nation where two men of character could transact a business deal with a handshake. We now live in a world where contracts drawn up by armies of lawyers are frequently litigated when one party decides it no longer wants to be bound by the terms of an agreement willingly entered into.
No, no, no. Zer0’s new bank fee(tax) will take care of the bank’s part of the deal...right?
Yeah, so? The truth is, she would be making a payment on a loan, not a house.
So you’re saying she could live there for free forever?
“...Something doesn’t add up, here. Ms. Speer is not being honest.”
Or is the ny compost trying to develop talking points for the administration...the poor downtrodden, crushed by an economy inherited bla bla bla...
Yet another opportunity for the government to step in and take more control. mommy state at it’s best.
ruefully
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