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 ...
Sorry. I don’t have time to read all 240 posts. I respond to what is written and make assumptions based on that.
Well I’ll summarize it for you...
I was called an idiot and a hypocrite among other things for saying what this guy (the subject of this thread) is doing is immoral.
And my post to you wasn’t condoning people moving to “greener pastures” by abandoning their commitments, it was simply stating that 20% down probably wasn’t enough to keep people from doing it.
Jeez...
And I simply said we needed to go back to 20% down (as it used to be) because no one has any committment to their loan and it would put a quick stop to all this "walk away" garbage.
You wanted to say we needed even more than that? OK, fine. Make it 40%. You would have almost zero people buying homes, which is the life blood of our nation's economy.
There is a thing called middle ground.
Jeez.
Why don't we fight about it.......
No, I didn’t say I wanted to make it more than that.
I simply said it wouldn’t stop what is currently happening due to the market going down so much.
Why is it people read in extreme intentions with whatever is said these days?
Divide and Conquer
What do you mean, “non-recourse” state? What is that?
I’ve heard that often times the loans have been sold several times and the bank that processes the loan no longer even knows where the papers are for the loan.
It means if you default on your mortgage, the bank can only take the house. They can't come after your other assets.
This will make your day.
snip>
The lawsuit that appears immediately below is a fantastic read for any party involved in the foreclosure process.
For the last several days I’ve been talking about capacity and both the latent and outright fraud and questionable practices that permeated the whole subprime originating process and which is now part of the foreclosure process.
The lawsuit spells out in plain language how the different players in a mortgage security agreement interact with one another.
(If you think they’re screwing homeowner’s over, you should read what they do to one another, according to the lawsuit.)
>snip
A "non-recourse" state is one of the fifty US States that have laws on the books that limit a borrower's liability under a mortgage contract to the market value of the mortgaged property. For example, in CA, where I live, if you buy a house with a purchase money mortgage secured by the house, instead of continuing to make mortgage payments you could, in effect, opt to turn the house over to the lender as payment in full. If the current market value of the house is less than the unpaid balance on the mortgage, then the lender could not (with some exceptions) collect from you the difference (or "deficiency").
In short, the borrower would lose all equity in the house and will have lost all payments made to the lender at the time he or she turns the house over to the lender, and the lender eats the shortfall between the unpaid balance of the loan and whatever the lender can sell the house for at auction.
This is the law in force and it is by operation of law a part of every contract just as surely as if it was written in bold type on the front page of the contract itself. There is nothing unethical or immoral about either the lender or the borrower standing on the terms of an arm's-length business contract.
If a borrower is so far underwater that it no longer makes sense to keep the house, and (as is the usual case) the lender will not come to terms, then there's nothing whatever wrong with availing oneself of the terms of the loan agreement and "just walking away."
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