Yep
And so, just like the goose that layed the golden egg...
Cash Cow, Deceased; 1 each.
Posted on 02/03/2010 7:05:10 AM PST by TigerLikesRooster
February 3, 2010
No Help in Sight, More Homeowners Walk Away
By DAVID STREITFELD
In 2006, Benjamin Koellmann bought a condominium in Miami Beach. By his calculation, it will be about the year 2025 before he can sell his modest home for what he paid. Or maybe 2040.
“People like me are beginning to feel like suckers,” Mr. Koellmann said. “Why not let it go in default and rent a better place for less?”
After three years of plunging real estate values, after the bailouts of the bankers and the revival of their million-dollar bonuses, after the Obama administration’s loan modification plan raised the expectations of many but satisfied only a few, a large group of distressed homeowners is wondering the same thing.
New research suggests that when a home’s value falls below 75 percent of the amount owed on the mortgage, the owner starts to think hard about walking away, even if he or she has the money to keep paying.
(Excerpt) Read more at nytimes.com ...
These are unusual times and you should keep that in mind unless all your units are filled all the time.
It is also likely that he mortgage agreement is non-recourse. If so, he fulfilled his contractual agreement.
What an idiotic reply.
If you walk away from an underwater mortgage, rent for a couple of years while saving the difference, you will have 20 % down and lenders will line up to give you a loan; especially when RE prices reflect actual values.
I don’t believe you are correct. First of all he didn’t sell it so he can’t claim the sales price as a loss since he was not part of the transaction. Second, what I’m talking about is if you owe the bank $200K and they sell the house in a short sale for $125k for example then the $75k difference can be considered income since you actually owed that money and so it is treated as ordinary income. It’s like winning a house or a car in a raffle. You have to claim the value as income.
I think Congress passed a law that mortgage deficiecies will not be counted as income.
I am in an unusual situation where business is booming. New company in town hired 300 computer software writers and IT people. They plan to hire another 700.
I had an “underwater” mortgage for 7 years in the 80’s. Eventually it wasn't underwater. Never considered walking away (even though the interest rate was 14% - a bargain when we bought the house).
As long as we (the government) allow the big guys to walk away from their debts, or worse, bail them out, more and more little guys are going to do the same. Is it immoral? Probably. Only if EVERYONE is held to the same moral standard. If not, it’s just stupid to be the only patsy.
Then someone should tell the IRS and the banks that are issueing 1099's for "imputed income"
>>Its in the Constitution after free health care and cheap gas. Dude...read.
Is that before or after the part where the President pays my car payment and mortgage?
If the bank “forgives” the $75k, then it could be income. I bet the bank tries to collect it.
Some do, many do not. Filers are getting the same card offers that 'good credit' folks are getting including 0% card and car loans. Creditors know that they can't file again for another 7 years and change.
Bottom line. Bankruptcy does not carry the same stigma it did in the old days.
What are your thoughts of Morgan Stanley walking away from 5 office buildings in SF? They called it a "strategic default", and there was no outcry in the press or on FR.
The way I see it, Benjamin was just following the lead of Wall Street. I don't approve of it, but it's not my decision to make.
Sure, and no moral character too!
(It's a bonus)
Look. "Walking away" from an agreement and promise you voluntarily entered into and signed your name to is dishonest.
I thought it was the Democrats who are the party of situational ethics!
There are no guarantees given about the future value of the home when you sign the mortgage. You know that going in. If you sign your name and make that promise, then you should do everything in your power to live up to it, at least if your word and your signature mean anything.
I don't believe in "walking away" from commitments and promises when things aren't all sunshine and rainbows any more.
Foreclosing because you just can't make the payments is a different story. Walking away because you just don't like the real estate market is wrong.
RE :”Bottom line. Bankruptcy does not carry the same stigma it did in the old days. “
Back in the 1970s you couldnt get regular credit cards at all without a job and a house. My Grandmother couldnt get one. And now there is little social stigma to anything bad.
But they still will have trouble getting reasonable loans or a good job.
See post #37. If you can’t understand that then you are hopelessly ignorant.
I'm sorry.
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