"WALK AWAY FROM YOUR MORTGAGE." people are told

[Neubarth]

Millions of people are now being advised to just walk away. Quit paying your mortgage and when they come to evict you five or six months later, just walk away. At least that way you get five or six months of rent free living. It will be another 20 years before those houses see their former valuation.

 

[Neubarth]

NY Times: Walk Away From Your Mortgage!

The Way We Live Now - Walk Away From Your Mortgage! - NYTimes.com
Such voluntary defaults are a new phenomenon. Time was, Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work. But the housing collapse left 10.7 million families owing more than their homes are worth. So some of them are making a calculated decision to hang onto their money and let their homes go. Is this irresponsible?

Businesses — in particular Wall Street banks — make such calculations routinely. Morgan Stanley recently decided to stop making payments on five San Francisco office buildings. A Morgan Stanley fund purchased the buildings at the height of the boom, and their value has plunged. Nobody has said Morgan Stanley is immoral — perhaps because no one assumed it was moral to begin with. But the average American, as if sprung from some Franklinesque mythology, is supposed to honor his debts, or so says the mortgage industry as well as government officials. Former Treasury Secretary Henry M. Paulson Jr. declared that “any homeowner who can afford his mortgage payment but chooses to walk away from an underwater property is simply a speculator — and one who is not honoring his obligation.” (Paulson presumably was not so censorious of speculation during his 32-year career at Goldman Sachs.)
And given that nearly a quarter of mortgages are underwater, and that 10 percent of mortgages are delinquent,

 

[Truthmatters]

Its about time.

The corps get off scott free and with bonuses for the assholes who did this to us and the little guy gets screwed for life?

 

[Vortex]

Its about time. The corps get off scott free and with bonuses for the assholes who did this to us and the little guy gets screwed for life?

Good rant TM but you forgot to blame Bush.

 

[Anguille]

Millions of people are now being advised to just walk away. Quit paying your mortgage and when they come to evict you five or six months later, just walk away. At least that way you get five or six months of rent free living. It will be another 20 years before those houses see their former valuation.

People who can afford their mortgage and understood fully the terms of the loan but who are now walking away from it because it's a bad investment are scum. Lots of these people doing this were speculators who helped create the housing crises in the first place.

 

[California Girl]

Its about time.

The corps get off scott free and with bonuses for the assholes who did this to us and the little guy gets screwed for life?

Every time I think you can't get any more stupid, you surprise me.

 

[Fayebelle]

Sadly that headline was written in large bold print. Had it been in "fine print" none of these "poor people in over their heads" would have been able to see it. Just like they couldn't understand that adjustable rate or interest only didn't equate to real estate garage sale as stated in their purchasing papers.

 

[Truthmatters]

Its about time.

The corps get off scott free and with bonuses for the assholes who did this to us and the little guy gets screwed for life?

Every time I think you can't get any more stupid, you surprise me.

If you had a mortgage on a house for 450,000 dollars and the house was worth
200,000 would you continue to pay it for years knowing the house would never in your lifetime be worth that much?

 

[Zander]

Its about time.

The corps get off scott free and with bonuses for the assholes who did this to us and the little guy gets screwed for life?

Yeah!! Those people were forced to sign mortgage papers!! Evil dirty corporations.....

 

[Fayebelle]

If you had a mortgage on a house for 450,000 dollars and the house was worth
200,000 would you continue to pay it for years knowing the house would never in your lifetime be worth that much?

Would you buy a 20oz coke for $15? Then why would you agree on a $450K loan for a house worth half that amount?

 

[The Rabbi]

Its about time.

The corps get off scott free and with bonuses for the assholes who did this to us and the little guy gets screwed for life?

Every time I think you can't get any more stupid, you surprise me.

If you had a mortgage on a house for 450,000 dollars and the house was worth
200,000 would you continue to pay it for years knowing the house would never in your lifetime be worth that much?

Please show me the person in that position.
There is none.
People who walk away from their mortgages will be walking to bankruptcy court when the mortgage company attempts to collect the deficit.
In any case, merely being underwater isn't a good reason to walk away from a mortgage. Virtually all FhA and VA loans are underwater in the first years anyway. It is a matter of whether it is cheaper to pay the loan or cheaper to rent, keeping in mind the impending bankruptcy.

 

[Neubarth]

Its about time.

The corps get off scott free and with bonuses for the assholes who did this to us and the little guy gets screwed for life?

Yeah!! Those people were forced to sign mortgage papers!! Evil dirty corporations.....

Zander, I suspect that we are going to see some deflation for the next few years as the economy continues to collapse. If my guess is right (and it is a guess as there are too many variables to know anything with certainty in this modern world of ours), those housing prices will fall a lot lower. I have an adopted son (one of many) who bought a condo with his new wife right after they were married. Like most property in San Diego, it has fallen tremendously in value and is worth about half of what he owes. He is paying $3000 a month on the mortgage, yet he could buy another similar condo and only pay 1500 a month.

Now, tell me with a straight face that you would tell him to continue paying that $3000 a month for the next twenty years when for the same money he could buy a full sized house. It is a business decision just like any other. He had no way of knowing that housing values would tank so seriously in San Diego. I tried to warn him before he bought, but that is water over the dam, now.

Fact remains that if treated like any other business decision, he should walk away. The bank took a risk in financing the loan. It was a business decision for them, too. they have made fifty thousand in interest, so up to now it has been very lucrative to them. It is time for them to take some of the loss, too.

A lot of other people feel the same way I do. It is not a question of morals or ethics, but just business. IF the banks were stupid enough to put too much of their money in real estate, then they did not diversify enough. Shame on them.

 

[Anguille]

Its about time.

The corps get off scott free and with bonuses for the assholes who did this to us and the little guy gets screwed for life?

Yeah!! Those people were forced to sign mortgage papers!! Evil dirty corporations.....

Zander, I suspect that we are going to see some deflation for the next few years as the economy continues to collapse. If my guess is right (and it is a guess as there are too many variables to know anything with certainty in this modern world of ours), those housing prices will fall a lot lower. I have an adopted son (one of many) who bought a condo with his new wife right after they were married. Like most property in San Diego, it has fallen tremendously in value and is worth about half of what he owes. He is paying $3000 a month on the mortgage, yet he could buy another similar condo and only pay 1500 a month.

Now, tell me with a straight face that you would tell him to continue paying that $3000 a month for the next twenty years when for the same money he could buy a full sized house. It is a business decision just like any other. He had no way of knowing that housing values would tank so seriously in San Diego. I tried to warn him before he bought, but that is water over the dam, now.

Fact remains that if treated like any other business decision, he should walk away. The bank took a risk in financing the loan. It was a business decision for them, too. they have made fifty thousand in interest, so up to now it has been very lucrative to them. It is time for them to take some of the loss, too.

A lot of other people feel the same way I do. It is not a question of morals or ethics, but just business. IF the banks were stupid enough to put too much of their money in real estate, then they did not diversify enough. Shame on them.

It certainly is a question or morals and ethics. He gambled. He lost. Unless he was conned by the bank, he has an obligation to fulfill the contract he agreed to. If he walks away he is defrauding the bank.

 

[Zander]

Its about time.

The corps get off scott free and with bonuses for the assholes who did this to us and the little guy gets screwed for life?

Yeah!! Those people were forced to sign mortgage papers!! Evil dirty corporations.....

Zander, I suspect that we are going to see some deflation for the next few years as the economy continues to collapse. If my guess is right (and it is a guess as there are too many variables to know anything with certainty in this modern world of ours), those housing prices will fall a lot lower. I have an adopted son (one of many) who bought a condo with his new wife right after they were married. Like most property in San Diego, it has fallen tremendously in value and is worth about half of what he owes. He is paying $3000 a month on the mortgage, yet he could buy another similar condo and only pay 1500 a month.

Now, tell me with a straight face that you would tell him to continue paying that $3000 a month for the next twenty years when for the same money he could buy a full sized house. It is a business decision just like any other. He had no way of knowing that housing values would tank so seriously in San Diego. I tried to warn him before he bought, but that is water over the dam, now.

Fact remains that if treated like any other business decision, he should walk away. The bank took a risk in financing the loan. It was a business decision for them, too. they have made fifty thousand in interest, so up to now it has been very lucrative to them. It is time for them to take some of the loss, too.

A lot of other people feel the same way I do. It is not a question of morals or ethics, but just business. IF the banks were stupid enough to put too much of their money in real estate, then they did not diversify enough. Shame on them.

He should do what he thinks is right. He can walk away, we have non-recourse loans in California. But to blame the bank is just silly.

 

[Immanuel]

Its about time.

The corps get off scott free and with bonuses for the assholes who did this to us and the little guy gets screwed for life?

Every time I think you can't get any more stupid, you surprise me.

If you had a mortgage on a house for 450,000 dollars and the house was worth
200,000 would you continue to pay it for years knowing the house would never in your lifetime be worth that much?

So, what you are suggesting is theft.

You made an agreement to borrow the money from the bank. You promised to pay that money back with interest. Now, when you decide that the house is not worth what you got it for, you want to take the bank's money and leave them with a worthless house.

That is dishonest to say the least.

Oh and by the way, the bank did NOT make you sign the contract. You did it on your own because you wanted a new house. If the housing market had tripled and you sold the house for three times what you bought it for, I highly doubt you would have been sharing your profit with the bank.

Immie

 

[Immanuel]

Its about time.

The corps get off scott free and with bonuses for the assholes who did this to us and the little guy gets screwed for life?

Yeah!! Those people were forced to sign mortgage papers!! Evil dirty corporations.....

Zander, I suspect that we are going to see some deflation for the next few years as the economy continues to collapse. If my guess is right (and it is a guess as there are too many variables to know anything with certainty in this modern world of ours), those housing prices will fall a lot lower. I have an adopted son (one of many) who bought a condo with his new wife right after they were married. Like most property in San Diego, it has fallen tremendously in value and is worth about half of what he owes. He is paying $3000 a month on the mortgage, yet he could buy another similar condo and only pay 1500 a month.

Now, tell me with a straight face that you would tell him to continue paying that $3000 a month for the next twenty years when for the same money he could buy a full sized house. It is a business decision just like any other. He had no way of knowing that housing values would tank so seriously in San Diego. I tried to warn him before he bought, but that is water over the dam, now.

Fact remains that if treated like any other business decision, he should walk away. The bank took a risk in financing the loan. It was a business decision for them, too. they have made fifty thousand in interest, so up to now it has been very lucrative to them. It is time for them to take some of the loss, too.

A lot of other people feel the same way I do. It is not a question of morals or ethics, but just business. IF the banks were stupid enough to put too much of their money in real estate, then they did not diversify enough. Shame on them.

I have to disagree with you.

To walk away only because it makes "business" sense is dishonest. Sometimes people do not have a choice. They bought a home expecting their income to last and then through no fault of their own, they lose their income and they have no choice. But, if the reasoning is that... well, they can get a better deal on the other side of the tracks, is dishonest and immoral in my humble opinion.

The value of my house has plummeted. I could do better if I walked away from this one and bought at the bottom of the market, but that would be wrong. I borrowed the money for this house and I agreed to pay it back with interest. I took a risk just as the bank did and right now, it appears that I lost. That does not mean that the bank should take the loss for my decision.

edit: I didn't read that post in full. I didn't realize it was his son! If I had, I would not have worded it in that fashion. But truly Neubarth, your son borrowed that money promising to pay it back with interest. He took the risk when he signed the mortgage contract.

Immie

 

[Anguille]

So, what you are suggesting is theft.

You made an agreement to borrow the money from the bank. You promised to pay that money back with interest. Now, when you decide that the house is not worth what you got it for, you want to take the bank's money and leave them with a worthless house.

That is dishonest to say the least.

Oh and by the way, the bank did NOT make you sign the contract. You did it on your own because you wanted a new house. If the housing market had tripled and you sold the house for three times what you bought it for, I highly doubt you would have been sharing your profit with the bank.

Immie

I agree. Anyone who went into that deal with the bank eyes wide open as Neubarth's son seems to have done. And in spite of good advice not to buy at that price and understanding full well the obligations of the mortgage, then they are obligated to hold up their end of the deal.

Some people were hoodwinked by shady mortgage companies and real estate brokers and went into financial ruin and simply could not meet the payments anymore on their loans either due to stupidity or being tricked or because of unforeseen circumstances such as loss of income or illness.

But anyone capable of paying their loan is obliged to do so. To skip out on a mortgage and take advantage of the drop in housing prices to buy yourself a cheaper one is criminal IMO.

People like this will make it even harder for honest people to get loans in the future.

 

[Neubarth]

Yeah!! Those people were forced to sign mortgage papers!! Evil dirty corporations.....

Zander, I suspect that we are going to see some deflation for the next few years as the economy continues to collapse. If my guess is right (and it is a guess as there are too many variables to know anything with certainty in this modern world of ours), those housing prices will fall a lot lower. I have an adopted son (one of many) who bought a condo with his new wife right after they were married. Like most property in San Diego, it has fallen tremendously in value and is worth about half of what he owes. He is paying $3000 a month on the mortgage, yet he could buy another similar condo and only pay 1500 a month.

Now, tell me with a straight face that you would tell him to continue paying that $3000 a month for the next twenty years when for the same money he could buy a full sized house. It is a business decision just like any other. He had no way of knowing that housing values would tank so seriously in San Diego. I tried to warn him before he bought, but that is water over the dam, now.

Fact remains that if treated like any other business decision, he should walk away. The bank took a risk in financing the loan. It was a business decision for them, too. they have made fifty thousand in interest, so up to now it has been very lucrative to them. It is time for them to take some of the loss, too.

A lot of other people feel the same way I do. It is not a question of morals or ethics, but just business. IF the banks were stupid enough to put too much of their money in real estate, then they did not diversify enough. Shame on them.

He should do what he thinks is right. He can walk away, we have non-recourse loans in California. But to blame the bank is just silly.

He never blamed the bank. He also never expected that things would get this bad. I did, but I could not convince him that I knew what would happen.

Shoot, one Bubble can put us into recession.

Two Bubbles can put us into Severe Recession

Three Bubbles bursting will always put you into DEPRESSION. That is what we have unfolding.

 

[Sunshine]

Its about time.

The corps get off scott free and with bonuses for the assholes who did this to us and the little guy gets screwed for life?

Every time I think you can't get any more stupid, you surprise me.

If you had a mortgage on a house for 450,000 dollars and the house was worth
200,000 would you continue to pay it for years knowing the house would never in your lifetime be worth that much?

The value of a house is what someone is willing to pay for it. With that in mind, a lot of people got in real trouble when banks started telling them 'you have $$$$$$ equity in your home on which you can borrow. So, in addition to their mortgage people went out and borrowed on the imaginary 'equity.' And they learned that the real value of a house is what someone is willing to pay for it. Not one cent more.

I would not walk away from a mortgage under any circumstances. So it takes 20 years for the so called 'value' of the home to get back where it was initially. So what. Your mortgage is probably for 30. By the time you get it paid for, assuming you don't eat up your equity on frivolous shit, you'll get your money back.

 

[Annie]

Yeah!! Those people were forced to sign mortgage papers!! Evil dirty corporations.....

Zander, I suspect that we are going to see some deflation for the next few years as the economy continues to collapse. If my guess is right (and it is a guess as there are too many variables to know anything with certainty in this modern world of ours), those housing prices will fall a lot lower. I have an adopted son (one of many) who bought a condo with his new wife right after they were married. Like most property in San Diego, it has fallen tremendously in value and is worth about half of what he owes. He is paying $3000 a month on the mortgage, yet he could buy another similar condo and only pay 1500 a month.

Now, tell me with a straight face that you would tell him to continue paying that $3000 a month for the next twenty years when for the same money he could buy a full sized house. It is a business decision just like any other. He had no way of knowing that housing values would tank so seriously in San Diego. I tried to warn him before he bought, but that is water over the dam, now.

Fact remains that if treated like any other business decision, he should walk away. The bank took a risk in financing the loan. It was a business decision for them, too. they have made fifty thousand in interest, so up to now it has been very lucrative to them. It is time for them to take some of the loss, too.

A lot of other people feel the same way I do. It is not a question of morals or ethics, but just business. IF the banks were stupid enough to put too much of their money in real estate, then they did not diversify enough. Shame on them.

I have to disagree with you.

To walk away only because it makes "business" sense is dishonest. Sometimes people do not have a choice. They bought a home expecting their income to last and then through no fault of their own, they lose their income and they have no choice. But, if the reasoning is that... well, they can get a better deal on the other side of the tracks, is dishonest and immoral in my humble opinion.

The value of my house has plummeted. I could do better if I walked away from this one and bought at the bottom of the market, but that would be wrong. I borrowed the money for this house and I agreed to pay it back with interest. I took a risk just as the bank did and right now, it appears that I lost. That does not mean that the bank should take the loss for my decision.

Immie

I'm going to agree and disagree with what you wrote. I'm one of those that because of job may end up in trouble. I'm lucky in the sense of having bought in '95, so my house is still worth more than I paid, even with re-fi. Fixed mortgage, under 5% interest rate. Of course if I lose my job, likely, that won't matter.

Of course, I could declare bankruptcy, but unlikely to do so. I'll sell and probably come out slightly ahead in these times.

Now if I'd bought when this same home was selling for over twice I'd pay for? Should that warrant me walking away? Numbers: I bought in '95, $130k. In 2004 was valued at $380k. Does that make sense? It didn't to me. Since I had 3 kids and my elderly parents living with me, I wasn't about to sell and uproot all.

But what if I had? The same unit it now selling for @$200k. Lots of folks bought when it was much higher. Should they be able 'to walk away?' Regardless of circumstances of employment?