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More California homeowners walk out on mortgages
Fresno Bee ^ | 27 May 2010 | Tim Sheehan

Posted on 05/31/2010 12:22:29 PM PDT by Lorianne

In areas hardest hit by plunging real-estate values - including the San Joaquin Valley - some people who can afford their mortgage are opting to walk away from their loan and let their bank repossess the house.

"It's very stressful to get to that point," said James Graham, a 48-year-old power-plant worker who walked away from his home in Bakersfield last fall. "You're raised up to do the right thing and pay your mortgage, pay your bills."

"But when you get to that point where it's time to walk, it's time."

It's called "strategic default," and experts say it stems from frustration with home values that have plummeted since buyers bought or refinanced at the peak of the real-estate boom, and banks dragging their heels on loan-modification requests.

(Excerpt) Read more at fresnobee.com ...


TOPICS: Business/Economy; Government; US: California
KEYWORDS: banks; debt; defaults; foreclosure; foreclosures; government; hamp; housing; mortgages; realestate; strategicdefault; walkaway
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1 posted on 05/31/2010 12:22:29 PM PDT by Lorianne
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To: Lorianne

There really ought to be a permanent “no credit for you EVER” list for people like this.


2 posted on 05/31/2010 12:23:35 PM PDT by pnh102 (Regarding liberalism, always attribute to malice what you think can be explained by stupidity. - Me)
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To: pnh102

Banks, too. Banks should be required to close if they make such ridiculous loans on these properties.


3 posted on 05/31/2010 12:25:26 PM PDT by CodeToad
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To: CodeToad
how dare anyone blame these people or banks for not being responsible.
4 posted on 05/31/2010 12:26:51 PM PDT by dalebert
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To: CodeToad

exactly. and unbder no circumstances should taxpayers have to bail out a bank that made these ridiculous loans (but we will of course).


5 posted on 05/31/2010 12:27:26 PM PDT by RC one (WHAT!!!!)
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To: Lorianne

No one was ever guaranteed that their home would always be worth what they bought it for. People need to go back to looking at a home as a shelter, a safe place to raise children rather than just an investment.

People that can afford their mortgage and just walk away from it ought to be jailed.


6 posted on 05/31/2010 12:28:17 PM PDT by Grunthor (Faster than the speed of smell.)
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To: pnh102
There really ought to be a permanent “no credit for you EVER” list for people like this.

We have people on this forum who will disagree with you. (I'm not one of them).

7 posted on 05/31/2010 12:29:12 PM PDT by Graybeard58 (No Romney,No Mark Kirk (Illinois), not now, not ever!)
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To: pnh102
Exactly. Hubby and I worked hard to save 20% for a downpayment and to pay off our house.

NO MORE CREDIT EVER for people like these.

8 posted on 05/31/2010 12:30:59 PM PDT by GOP_Lady
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To: Graybeard58

Who care who disagrees with me. ;-)


9 posted on 05/31/2010 12:31:24 PM PDT by GOP_Lady
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To: Lorianne
They're not doing anything wrong. Walking away in a "non-recourse" state like CA is one of the contingencies all parties were aware of when the arm's-length loan agreement was signed. These people are simply acting within their rights. There's nothing at all unethical or immoral about standing on one's rights.
10 posted on 05/31/2010 12:31:58 PM PDT by Erskine Childers
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To: Lorianne
In many cases, lenders encouraged people to behave irresponsibly. These customers are worthy of censure, but the lenders often aren't purely innocent victims.
11 posted on 05/31/2010 12:32:29 PM PDT by Clintonfatigued (Obama's more worried about Israelis building houses than he is about Islamists building atomic bombs)
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To: CodeToad

Exactly. Hubby and I went through a very reputable S&L.

That S&L doesn’t give loans to just anyone.

That S&L is still strong.


12 posted on 05/31/2010 12:33:05 PM PDT by GOP_Lady
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To: Erskine Childers

They signed papers that they would make payments and repay the loan in full.


13 posted on 05/31/2010 12:33:33 PM PDT by GOP_Lady
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To: Grunthor

Exactly.


14 posted on 05/31/2010 12:34:37 PM PDT by GOP_Lady
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To: Lorianne

Was at a True Value store a couple of days ago. The guy behind the counter got a call from his wife after their bankruptcy meeting with a judge. Bank of America could not show that they held the mortgage and they didn’t show up at the hearing. The judge gave them the house. Just have to make sure they pay the taxes.


15 posted on 05/31/2010 12:35:00 PM PDT by raybbr (Someone who invades another country is NOT an immigrant - illegal or otherwise.)
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To: Lorianne
Using this kind of logic, every new car purchaser could "walk" on his loan the day after buying th ecar. Not all assets appreciate in value; the fact that this one has not for some people does not justify their actions in disregarding their contracts.

That being said, I do blame the lenders for much of this mess and, were it not for the insane bailouts, would have loved to see the worst offenders go down the drain.

16 posted on 05/31/2010 12:36:00 PM PDT by PackerBoy (Just my opinion ....)
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To: Graybeard58

Many people are walking away from homes and SUV’s all over the country because they just can’t make it.Between the banks and the government people are feeling enslaved and have no other choice.Blame gas prices,food prices and high taxes and an over all bad economy.You can’t bleed blood from a stone.


17 posted on 05/31/2010 12:36:14 PM PDT by taxtruth (Something really stinks In The Federal Government/Mafia and I think it's BO!)
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To: pnh102

Let the market decide about the credit, and about the terms.


18 posted on 05/31/2010 12:36:31 PM PDT by dadgum (Overjoyed to be a Pariah)
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To: CodeToad
"Banks, too. Banks should be required to close if they make such ridiculous loans on these properties."

If banks down loan enough subprime loans (ie social justice crap), then they get a low CRA rating (community reinvestment act). With a low CRA rating the bank is then pretty much labeled as a racist bank and expansion across interstate is thwarted via the US Congress.

19 posted on 05/31/2010 12:37:38 PM PDT by avacado
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To: Lorianne
My suggestion would be to rent out the current home and buy a cheaper unit
while saving up the extra cash. Eventually the value will return.
20 posted on 05/31/2010 12:38:06 PM PDT by MaxMax (Conservatism isn't a party)
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