Better to just stop paying mortgage??
04-08-2010, 02:19 PM
#121
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There is not doubt that the banks were far too loose, hell I probably didn't deserve the loan I got on my house 
...
But the mentality then was that a house loan was a fairly safe bet since house prices never declined so the bank could get their money back for the most part. We now know that was not true, but it seemed to make sense then.
...
But the mentality then was that a house loan was a fairly safe bet since house prices never declined so the bank could get their money back for the most part. We now know that was not true, but it seemed to make sense then.
Our house is OK and in a decent neighborhood, but we were conservative and didn't buy a house in the top range of our "affordability." I never viewed the house as an "investment," don't care about its value up or down while we live in it and have not taken cash out of it.
04-08-2010, 03:15 PM
#122
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My first mortgage broker was actually surprised when I said we would put up more than 20% down. It was a no-doc loan, too-- I resisted the urge to lie to him and say we were making $3 million/year.
Our house is OK and in a decent neighborhood, but we were conservative and didn't buy a house in the top range of our "affordability." I never viewed the house as an "investment," don't care about its value up or down while we live in it and have not taken cash out of it.
Our house is OK and in a decent neighborhood, but we were conservative and didn't buy a house in the top range of our "affordability." I never viewed the house as an "investment," don't care about its value up or down while we live in it and have not taken cash out of it.
04-08-2010, 09:06 PM
#123
Drifting
^ These bankers must have short-term memories and/or not read because there are lots of examples of house values dropping- even in my life span.
Values declined (at least in CA) from 1989-1994 significantly. A good case-study for today's mess is what happened in the 1960's and 70's in East San Jose in California- easy loans were made, foreclosures occurred, and that area is still recovering even today in some ways. East San Jose suffered because it was a new area at the time and the builders were giving some incredible loans as well as there were lots of VA loans that didn't require large down payments as well. Once prices started dropping, foreclosures were common.
I owned my first house during the decline of 1989-1994 and remember many people underwater in the loans bug slugging through it because they had a large amount of money tied up and didn't want to lose it. I bought my current house in 1992 thinking things bottomed mistakenly and was underwater significantly until 1995 when values started rising rapidly.
Anyway, I think most people will agree how we got to this mess. The bigger question is how we get out of it -and that will take some time- perhaps 4 years or more if at all. Interest rates are rising and that is a killer for home values rising because income is not rising quick enough (but inflation may change that issue like it did in the 70's). Time will tell.
Values declined (at least in CA) from 1989-1994 significantly. A good case-study for today's mess is what happened in the 1960's and 70's in East San Jose in California- easy loans were made, foreclosures occurred, and that area is still recovering even today in some ways. East San Jose suffered because it was a new area at the time and the builders were giving some incredible loans as well as there were lots of VA loans that didn't require large down payments as well. Once prices started dropping, foreclosures were common.
I owned my first house during the decline of 1989-1994 and remember many people underwater in the loans bug slugging through it because they had a large amount of money tied up and didn't want to lose it. I bought my current house in 1992 thinking things bottomed mistakenly and was underwater significantly until 1995 when values started rising rapidly.
Anyway, I think most people will agree how we got to this mess. The bigger question is how we get out of it -and that will take some time- perhaps 4 years or more if at all. Interest rates are rising and that is a killer for home values rising because income is not rising quick enough (but inflation may change that issue like it did in the 70's). Time will tell.
04-08-2010, 09:42 PM
#124
Moderator Alumnus
Of course there is going to be regional variability in real estate prices. Even at the height of the bubble there were regions seeing price declines and today in the depths of the crash there are some markets showing gains.
But the point was on the national level, nothing like this has ever happened, hell there really hadn't been a year with even a 0.1% decline since the great depression.
05-06-2010, 02:40 PM
#125
Homeowners abandoning houses en masse
Posted by Beth Braverman
April 30, 2010 4:12 pm
A pair of studies released Thursday found that more homeowners are choosing to let an underwater home go into foreclosure, despite their ability to continue to make payments. Researchers at the University of Chicago and Northwestern University found that 31% of foreclosures appeared to be strategic, up from 22% in last year.
As the number of borrowers who walk away from their mortgages increases, the social stigma associated with foreclosure has started to wane, experts say. "It can be a very logical decision based purely on economics, numbers and returns," says Keith Gumbinger, of HSH Associates, a mortgage publishing website. "Is there better value to me to abandon this home and rent another one for less money?" A quarter of all borrowers — 11.3 million homeowners — were underwater on their mortgages at the end of 2009.
A Morgan Stanley report, also released Thursday, found that strategic defaulters tend to have higher credit scores, larger loan balances and more recent mortgages than those who remain in underwater homes. From an economic perspective, it makes sense for borrowers who are more than 25% underwater on their mortgage to consider walking away, says Paola Sapienza, a finance professor at Northwestern's Kellogg School of Management and a co-author of the study.
Borrowers who are up-to-date on their payments but underwater may also be walking away in protest after seeing government programs and bank policies aimed at their delinquent neighbors but offering little assistance for them, Gumbinger says. The Chicago study found that the probability of strategic default increases by 23% when homeowners learn that their neighbor with negative equity has received a partial loan for forgiveness.
Strategic defaults do not come without consequences for the borrower. A borrower with a 780 credit score could see his score fall 150 points after walking away. But if he keeps his credit pristine otherwise, he could be back in prime range — and be able to purchase a home — within two or three years, says Craig Watts, a spokesman with the credit scoring firm Fair Isaac.
Posted by Beth Braverman
April 30, 2010 4:12 pm
A pair of studies released Thursday found that more homeowners are choosing to let an underwater home go into foreclosure, despite their ability to continue to make payments. Researchers at the University of Chicago and Northwestern University found that 31% of foreclosures appeared to be strategic, up from 22% in last year.
As the number of borrowers who walk away from their mortgages increases, the social stigma associated with foreclosure has started to wane, experts say. "It can be a very logical decision based purely on economics, numbers and returns," says Keith Gumbinger, of HSH Associates, a mortgage publishing website. "Is there better value to me to abandon this home and rent another one for less money?" A quarter of all borrowers — 11.3 million homeowners — were underwater on their mortgages at the end of 2009.
A Morgan Stanley report, also released Thursday, found that strategic defaulters tend to have higher credit scores, larger loan balances and more recent mortgages than those who remain in underwater homes. From an economic perspective, it makes sense for borrowers who are more than 25% underwater on their mortgage to consider walking away, says Paola Sapienza, a finance professor at Northwestern's Kellogg School of Management and a co-author of the study.
Borrowers who are up-to-date on their payments but underwater may also be walking away in protest after seeing government programs and bank policies aimed at their delinquent neighbors but offering little assistance for them, Gumbinger says. The Chicago study found that the probability of strategic default increases by 23% when homeowners learn that their neighbor with negative equity has received a partial loan for forgiveness.
Strategic defaults do not come without consequences for the borrower. A borrower with a 780 credit score could see his score fall 150 points after walking away. But if he keeps his credit pristine otherwise, he could be back in prime range — and be able to purchase a home — within two or three years, says Craig Watts, a spokesman with the credit scoring firm Fair Isaac.
05-06-2010, 02:57 PM
#127
<shrug> it makes PERFECT business sense for many many familes...and the bleeding that is the loss of the real estate market is NOT just pointed at people who took out ridiculous ARMs or over extended themselves...this is effecting people who did EVERYTHING by the book...20% down, decent % of income, etc....the holier than thou attitude and stance of many previous posters here is now becoming irrelevant...sorry boys...
at some point it becomes absurd to keep paying...and its clear by this article, that time is now for more and more and more people...when is it your turn to finally realize you are wasting your life paying a mortgage? unless you can say you seriously plan to be in your home for AT LEAST 20 years, you are wasting your money. Bottom line.
at some point it becomes absurd to keep paying...and its clear by this article, that time is now for more and more and more people...when is it your turn to finally realize you are wasting your life paying a mortgage? unless you can say you seriously plan to be in your home for AT LEAST 20 years, you are wasting your money. Bottom line.
05-06-2010, 03:00 PM
#128
Team Owner
Unless they get a debt cancellation, it still doesn't make business sense.
05-06-2010, 03:10 PM
#129
Stopped paying the mortgage, got into a shortsale where the loss was about 60k....bank did not forgive the loss but instead offered a promissary note for 50k...ZERO effect on credit...he took it...then a month later called and asked how much to pay in full to get this behind him...bank said give us 25k lump sum and this whole thing is washed away....he took some savings (which he was able to save up while strategically NOT paying the mortgage) and now walked away clean...process took total of about 9 months, had NO effect on his credit, and hes out from under the debt 100%...
That is a situation i dont think anyone here could say they wouldnt want if they could get it.
05-06-2010, 03:36 PM
#130
Was reading an article a few months back on these "strategic defaults." Basically more banks are going after these individuals who have the ability to pay. They check your credit scores to see if the mortgage is the only non-payment and see how the rest of your payment history has been before going forward. So going back to the original post, if said defaulter kept up on his credit card payments and car loans, that would be enough reason to file a claim against the defaulter. The kicker was, if the bank won the lawsuit, you would be making full payment for the loan for the home which you would not own anymore. 
I'm pretty sure the article was on CNN money - sorry no link.
I'm pretty sure the article was on CNN money - sorry no link.
05-06-2010, 03:45 PM
#131
another thought, just a few threads down from this one is a discussion on the "the coming global collapse" and "the end game" and how the US economy mirrors Rome just before the collapse of the empire....
if these forecasts and theories are true, even partially, i certainly dont want to be holding on to a mortgage when the button gets pushed...i want to be saving as much money as i can right now, stockpiling for this "inevitable" collapse...
in the fact of the potential collapse of our national economy (let alone global!) all bets are off and the real fools will be those crying about how eveyone defaulted and they kept paying because of some "moral obligation"
as well as you may be sleeping at night right now because you are moral and pay your mortgage because you signed a contract, you wont be sleeping so well when the world economy is collapsing around you...
very very dark speculations, sure, but very very possible..
if these forecasts and theories are true, even partially, i certainly dont want to be holding on to a mortgage when the button gets pushed...i want to be saving as much money as i can right now, stockpiling for this "inevitable" collapse...
in the fact of the potential collapse of our national economy (let alone global!) all bets are off and the real fools will be those crying about how eveyone defaulted and they kept paying because of some "moral obligation"
as well as you may be sleeping at night right now because you are moral and pay your mortgage because you signed a contract, you wont be sleeping so well when the world economy is collapsing around you...
very very dark speculations, sure, but very very possible..
05-06-2010, 03:51 PM
#132
Ok, Here's the link.
http://money.cnn.com/2010/02/03/real...ment/index.htm
NEW YORK (CNNMoney.com) -- As terrible as it is to lose your house to foreclosure, at least it's a relief to put your biggest financial headache behind you, right?
Wrong.
Former homeowners may still be on the hook if there's a difference between what they owed on their mortgage and what the bank could sell it for at auction. And these "deficiency judgments" are ticking time bombs that can explode years after borrowers lose their homes.
It can even happen to people who got their bank to approve them selling their home for less than it is worth.
Vanessa Corey, for example, short sold her Fredericksburg, Va., home in April 2008. She and her husband built the house in 2004, but setbacks, both personal (divorce) and professional (housing bust), made it impossible for the real estate agent to keep her home. So she negotiated the short sale and thought that was the end of it.
"My understanding was that the deficiency was negotiated away," she said. "Then, last November, I got a letter from a lawyer telling me I owed my lender $65,000. I had to declare bankruptcy. There was no way I could pay it."
Where the foreclosure plague is spreading
Many homeowners are now in the same boat. And not just those who took out bigger loans than they could afford or who did so called "liar loans" where they didn't have to verify their income.
Because of falling home prices, borrowers who always paid their mortgage but who have run into unforeseen circumstances -- like unemployment or a job transfer -- can no longer sell their homes for what they owe. As a result, they are being forced to short sell or foreclose and are getting caught up in deficiency judgments.
"After the banks foreclose, it's very common now to have large deficiencies with houses not worth the balances owed," said Don Lampe, a North Carolina real estate attorney.
Lenders mostly declined comment. Although Corey's lender, BB&T did indicate it was pursuing more deficiency judgments.
"They follow the rise and fall of foreclosures," said the spokeswoman, who would not discuss Corey's account.
Can they come after you?
Whether banks can and will pursue deficiency judgments depends on many factors, including what state the borrower lives in and whether there's a second mortgage or other liens. But if borrowers ignore the possibility of deficiencies, it could haunt them.
"Once they have a judgment, they can pursue you anywhere," said Richard Zaretsky, a board-certified real estate attorney in West Palm Beach, Fla. "They can ask for financial records, have your wages garnished and, if you fail to respond, a judge can put you in jail."
In the case of foreclosure, lenders can pursue deficiencies in more than 30 states, including Florida, New York and Texas, according to the U.S. Foreclosure Network, an organization of mortgage law firms.
Some states, such as California, are "non-recourse" and don't allow deficiency judgments. But, even there, if the original loan was refinanced, some or all of it may be subject to claims.
Check the foreclosure rate in your state
Deficiency judgments on short sales and deeds-in-lieu can happen in many more places. In these cases, extinguishing the debt is often a matter of negotiating with the bank.
But even when lenders are willing, many borrowers may not be aware that they have to ask for release. So, if you are pursuing a short sale, be sure your attorney asks the bank to release you from any further obligation.
"People shouldn't have a false sense of security that a deficiency judgment may not be later sought," Zaretsky said.
He expects many will be filed over the next few years, based on the fact that banks have sold many of these accounts to collection agencies and other third parties, at discount.
"The parties who bought those notes wouldn't have paid money for them unless they had the intention of acting," Zaretsky said.
Ticking time bomb
What can be scary is that the judgments don't have to be obtained immediately. Lenders or collection agencies may wait until debtors have recovered financially before they swoop in. In Florida, the bank can wait up to five years to file. Once the court grants a judgment, the lender has 20 years there to collect, with interest.
It doesn't have to be a large amount of debt for a lender or collection agency to come after borrowers. Richard Varno and his wife short sold their Nashville home back in 2004 after he lost his job.
It wasn't until 2008, when the second lien holder asked him for $25,000, that he realized he still was liable.
"I told them, 'Hey, you guys released the title,'" he said. "As far as I know, I'm off the hook."
He wasn't. Releasing title does not necessarily end the debt. It's complicated because of variations in state law, but, generally, a mortgage has two parts: a pledge of collateral, represented by the home, and a promise to pay off the loan.
Lenders may release property liens in order to facilitate short sales without releasing borrowers from their obligations to pay under the promissory notes. The secured debt can convert to an unsecured one after the sale.
Zaretsky had one client who was so relieved to have arranged a short sale that he signed every paper his real estate agent shoved at him, even a confession that clearly stated he still owed the debt.
"He had no idea what he was doing," said Zaretsky. "All the lender had to do was go to court to convert the confession into a deficiency judgment."
Lenders are also very inconsistent. One of Zaretsky's short-sale clients was ready, willing and able to pay, but the bank did not even ask; another lender always reserves the right to pursue the deficiency.
Strategic defaults
Sometimes lenders go after borrowers walking away from their homes if they have other assets, according to Florida real estate attorney Larry Tolchinsky.
"Banks are pulling credit reports to see if it's a strategic default," he said. "If you're behind on all your other payments, you're okay. But if you're not, they'll come after you."
If borrowers have any doubts about their risks, they should seek legal advice. Or, at least, call non-profit organizations such as NeighborWorks for advice. According to Doug Robinson, a NeighborWorks spokesman, its counselors always try to negotiate away deficiencies when they facilitate short sales or deeds-in-lieu.
"We don't favor any short-sale contracts that leave any deficiency that can be pursued," he said.
Robinson himself knows what can happen. He paid off a deficiency after his own New Jersey house went through foreclosure 11 years ago.
http://money.cnn.com/2010/02/03/real...ment/index.htm
NEW YORK (CNNMoney.com) -- As terrible as it is to lose your house to foreclosure, at least it's a relief to put your biggest financial headache behind you, right?
Wrong.
Former homeowners may still be on the hook if there's a difference between what they owed on their mortgage and what the bank could sell it for at auction. And these "deficiency judgments" are ticking time bombs that can explode years after borrowers lose their homes.
It can even happen to people who got their bank to approve them selling their home for less than it is worth.
Vanessa Corey, for example, short sold her Fredericksburg, Va., home in April 2008. She and her husband built the house in 2004, but setbacks, both personal (divorce) and professional (housing bust), made it impossible for the real estate agent to keep her home. So she negotiated the short sale and thought that was the end of it.
"My understanding was that the deficiency was negotiated away," she said. "Then, last November, I got a letter from a lawyer telling me I owed my lender $65,000. I had to declare bankruptcy. There was no way I could pay it."
Where the foreclosure plague is spreading
Many homeowners are now in the same boat. And not just those who took out bigger loans than they could afford or who did so called "liar loans" where they didn't have to verify their income.
Because of falling home prices, borrowers who always paid their mortgage but who have run into unforeseen circumstances -- like unemployment or a job transfer -- can no longer sell their homes for what they owe. As a result, they are being forced to short sell or foreclose and are getting caught up in deficiency judgments.
"After the banks foreclose, it's very common now to have large deficiencies with houses not worth the balances owed," said Don Lampe, a North Carolina real estate attorney.
Lenders mostly declined comment. Although Corey's lender, BB&T did indicate it was pursuing more deficiency judgments.
"They follow the rise and fall of foreclosures," said the spokeswoman, who would not discuss Corey's account.
Can they come after you?
Whether banks can and will pursue deficiency judgments depends on many factors, including what state the borrower lives in and whether there's a second mortgage or other liens. But if borrowers ignore the possibility of deficiencies, it could haunt them.
"Once they have a judgment, they can pursue you anywhere," said Richard Zaretsky, a board-certified real estate attorney in West Palm Beach, Fla. "They can ask for financial records, have your wages garnished and, if you fail to respond, a judge can put you in jail."
In the case of foreclosure, lenders can pursue deficiencies in more than 30 states, including Florida, New York and Texas, according to the U.S. Foreclosure Network, an organization of mortgage law firms.
Some states, such as California, are "non-recourse" and don't allow deficiency judgments. But, even there, if the original loan was refinanced, some or all of it may be subject to claims.
Check the foreclosure rate in your state
Deficiency judgments on short sales and deeds-in-lieu can happen in many more places. In these cases, extinguishing the debt is often a matter of negotiating with the bank.
But even when lenders are willing, many borrowers may not be aware that they have to ask for release. So, if you are pursuing a short sale, be sure your attorney asks the bank to release you from any further obligation.
"People shouldn't have a false sense of security that a deficiency judgment may not be later sought," Zaretsky said.
He expects many will be filed over the next few years, based on the fact that banks have sold many of these accounts to collection agencies and other third parties, at discount.
"The parties who bought those notes wouldn't have paid money for them unless they had the intention of acting," Zaretsky said.
Ticking time bomb
What can be scary is that the judgments don't have to be obtained immediately. Lenders or collection agencies may wait until debtors have recovered financially before they swoop in. In Florida, the bank can wait up to five years to file. Once the court grants a judgment, the lender has 20 years there to collect, with interest.
It doesn't have to be a large amount of debt for a lender or collection agency to come after borrowers. Richard Varno and his wife short sold their Nashville home back in 2004 after he lost his job.
It wasn't until 2008, when the second lien holder asked him for $25,000, that he realized he still was liable.
"I told them, 'Hey, you guys released the title,'" he said. "As far as I know, I'm off the hook."
He wasn't. Releasing title does not necessarily end the debt. It's complicated because of variations in state law, but, generally, a mortgage has two parts: a pledge of collateral, represented by the home, and a promise to pay off the loan.
Lenders may release property liens in order to facilitate short sales without releasing borrowers from their obligations to pay under the promissory notes. The secured debt can convert to an unsecured one after the sale.
Zaretsky had one client who was so relieved to have arranged a short sale that he signed every paper his real estate agent shoved at him, even a confession that clearly stated he still owed the debt.
"He had no idea what he was doing," said Zaretsky. "All the lender had to do was go to court to convert the confession into a deficiency judgment."
Lenders are also very inconsistent. One of Zaretsky's short-sale clients was ready, willing and able to pay, but the bank did not even ask; another lender always reserves the right to pursue the deficiency.
Strategic defaults
Sometimes lenders go after borrowers walking away from their homes if they have other assets, according to Florida real estate attorney Larry Tolchinsky.
"Banks are pulling credit reports to see if it's a strategic default," he said. "If you're behind on all your other payments, you're okay. But if you're not, they'll come after you."
If borrowers have any doubts about their risks, they should seek legal advice. Or, at least, call non-profit organizations such as NeighborWorks for advice. According to Doug Robinson, a NeighborWorks spokesman, its counselors always try to negotiate away deficiencies when they facilitate short sales or deeds-in-lieu.
"We don't favor any short-sale contracts that leave any deficiency that can be pursued," he said.
Robinson himself knows what can happen. He paid off a deficiency after his own New Jersey house went through foreclosure 11 years ago.
05-06-2010, 03:51 PM
#133
Outnumbered at home
05-06-2010, 03:56 PM
#134
what do you care? thats a good question!
Seriously, where do you want you be, where do you want your family to be, what position do you want to be in IF things get worse....far worse?
Waving your hands like an idiot screaming about those who bailed on their mortgages is NOT a place you want to be, to be sure...
05-06-2010, 03:59 PM
#135
Drifting
someone i know quite well strategically defaulted on a condo, he was very capable to continue payments but did not want the place any longer (or the 70k of negative equity).
Stopped paying the mortgage, got into a shortsale where the loss was about 60k....bank did not forgive the loss but instead offered a promissary note for 50k...ZERO effect on credit...he took it...then a month later called and asked how much to pay in full to get this behind him...bank said give us 25k lump sum and this whole thing is washed away....he took some savings (which he was able to save up while strategically NOT paying the mortgage) and now walked away clean...process took total of about 9 months, had NO effect on his credit, and hes out from under the debt 100%...
That is a situation i dont think anyone here could say they wouldnt want if they could get it.
Stopped paying the mortgage, got into a shortsale where the loss was about 60k....bank did not forgive the loss but instead offered a promissary note for 50k...ZERO effect on credit...he took it...then a month later called and asked how much to pay in full to get this behind him...bank said give us 25k lump sum and this whole thing is washed away....he took some savings (which he was able to save up while strategically NOT paying the mortgage) and now walked away clean...process took total of about 9 months, had NO effect on his credit, and hes out from under the debt 100%...
That is a situation i dont think anyone here could say they wouldnt want if they could get it.
One other important thing, some jobs ask for a credit check before offering you a job, so even if you got out with just a ding on your credit, you could be harming more than just a future loan need.
05-06-2010, 04:02 PM
#136
How would that not affect his credit? It's going to show many months of not paying a loan? And new creditor should be able to see the non-payments. So he had to pay 25k out of pocket and now doesn't have a place to live?
One other important thing, some jobs ask for a credit check before offering you a job, so even if you got out with just a ding on your credit, you could be harming more than just a future loan need.
One other important thing, some jobs ask for a credit check before offering you a job, so even if you got out with just a ding on your credit, you could be harming more than just a future loan need.
He lives in a very nice apartment at this point where rent = 2/3 what the mortgage was for the old place. not to mention the new place is 150% the size...anyhow...
Puhleeeeaaaaze with the "credit rating check for job" routine...what jobs do you know that to be a fact for? I know people in law enforcement, public service, architecture, finance, stock trading, law, hell, i even know a mail man and NO ONE has ever had to submit to a credit check for a job in their respective field.
05-06-2010, 04:14 PM
#137
Drifting
He lives in a very nice apartment at this point where rent = 2/3 what the mortgage was for the old place. not to mention the new place is 150% the size...anyhow...
Puhleeeeaaaaze with the "credit rating check for job" routine...what jobs do you know that to be a fact for? I know people in law enforcement, public service, architecture, finance, stock trading, law, hell, i even know a mail man and NO ONE has ever had to submit to a credit check for a job in their respective field.
Puhleeeeaaaaze with the "credit rating check for job" routine...what jobs do you know that to be a fact for? I know people in law enforcement, public service, architecture, finance, stock trading, law, hell, i even know a mail man and NO ONE has ever had to submit to a credit check for a job in their respective field.
But to go back on your point about the "coming collapse" I think if you really thing that is going to happen, walking away from your mortgage and hording cash isn't really going to help you....
I'm thinking you need a cabin, off the grid, loaded with canned goods, salt, animals, and guns...
05-06-2010, 04:16 PM
#138
But to go back on your point about the "coming collapse" I think if you really thing that is going to happen, walking away from your mortgage and hording cash isn't really going to help you....
I'm thinking you need a cabin, off the grid, loaded with canned goods, salt, animals, and guns...
lets not get ridiculous. again, these are very real speculations and theories...heavily researched and provided by well respected institutions...go read the thread im talking about, its literally 4 threads down from this. its not some lunatic in a cabin coming up with this...
05-07-2010, 07:31 AM
#139
Outnumbered at home
what do you care? thats a good question!
Seriously, where do you want you be, where do you want your family to be, what position do you want to be in IF things get worse....far worse?
Waving your hands like an idiot screaming about those who bailed on their mortgages is NOT a place you want to be, to be sure...
Seriously, where do you want you be, where do you want your family to be, what position do you want to be in IF things get worse....far worse?
Waving your hands like an idiot screaming about those who bailed on their mortgages is NOT a place you want to be, to be sure...
So these idiots and asses that are bailing on their mortgages are just going to help in making everything worse.
I understand it makes BUSINESS SENSE for them to do it. But that is only for THEM. It DOES NOT make sense for the community as a whole for these asses to bail on their contracts.
05-07-2010, 08:11 AM
#140
Well lets see.. how about I own shares in the bank where one of these idiots had his mortgage through? So I have to watch my money go down, because the bank is losing money, because of morons that overspent on a house or just decide they don't have to follow the rules like everyone else and just get to pack up and leave.
So these idiots and asses that are bailing on their mortgages are just going to help in making everything worse.
I understand it makes BUSINESS SENSE for them to do it. But that is only for THEM. It DOES NOT make sense for the community as a whole for these asses to bail on their contracts.
So these idiots and asses that are bailing on their mortgages are just going to help in making everything worse.
I understand it makes BUSINESS SENSE for them to do it. But that is only for THEM. It DOES NOT make sense for the community as a whole for these asses to bail on their contracts.
if you want to talk about your money going DOWN....your money is going DOWN at a much more rapid pace via your mortgage and the continued fall of your equity / home value than your stock losses.....you may just be fortunate enough not to have to realize that loss at this point in time because you dont want to move. But the fact remains, you are losing far more money by continuing to pay that mortgage than you ever will be on your potential stock losses due to banks getting hit by foreclosures and strategic defaults.
They are idiots and asses why? because they are doing something to better their lives and their situations? because they are doing something you dont have the balls to do even though you know youd benefit in the long run just like they are? They are no more idiots and asses that make business decisions every single day in this country to go out of business, back out of a contract, lay people off, etc, due to the economy.
You are one of the sheep who is roped up in the emotional side of real estate ownership and "the american dream". well guess what, "the american dream" was a bubble that has popped and the world around us is being reshaped. You can stand idle and watch it happen around you and rant and rave about the "idiots and asses" who are actually doing something to stop the bleeding and stop more hardships for their familes or become part of it and better your personal situation in the process. Your call.
05-07-2010, 08:17 AM
#141
Bent = #1
lets not get ridiculous. again, these are very real speculations and theories...heavily researched and provided by well respected institutions...go read the thread im talking about, its literally 4 threads down from this. its not some lunatic in a cabin coming up with this...
05-07-2010, 08:31 AM
#142
So sure, you are correct in that if the economy collapes and money is now meaningless, being in a remote cabin with the proper survival resources is actually a great place to be, but the way the poster here was talking about it, it was meant to be an insult toward me and insinuated that im "off the deep end" or something. However the souces quoted in several articles about this potential coming collapse prove that im am not some lunatic on the fringe...my worries are backed up by deeply researched high profile studies done by well respected firms and institutions....not exactly a cabin in the woods....
05-07-2010, 08:37 AM
#143
Bent = #1
You need to read between the lines. He was insinuating that to have theories like that, theories of ecomonic collapse, failures of governments, etc, is to be an extremist, potentially an anarchist, or worse. The cabin reference goes back to the type of people who hide out in the mountains of west virginia and think the world is coming to an end. A notorious face and name to go along with this would be Ted Cacynski (spelling is probably off), the "uni-bomber".
So sure, you are correct in that if the economy collapes and money is now meaningless, being in a remote cabin with the proper survival resources is actually a great place to be, but the way the poster here was talking about it, it was meant to be an insult toward me and insinuated that im "off the deep end" or something. However the souces quoted in several articles about this potential coming collapse prove that im am not some lunatic on the fringe...my worries are backed up by deeply researched high profile studies done by well respected firms and institutions....not exactly a cabin in the woods....
So sure, you are correct in that if the economy collapes and money is now meaningless, being in a remote cabin with the proper survival resources is actually a great place to be, but the way the poster here was talking about it, it was meant to be an insult toward me and insinuated that im "off the deep end" or something. However the souces quoted in several articles about this potential coming collapse prove that im am not some lunatic on the fringe...my worries are backed up by deeply researched high profile studies done by well respected firms and institutions....not exactly a cabin in the woods....
05-07-2010, 08:55 AM
#144
Outnumbered at home
if you want to talk about your money going DOWN....your money is going DOWN at a much more rapid pace via your mortgage and the continued fall of your equity / home value than your stock losses.....you may just be fortunate enough not to have to realize that loss at this point in time because you dont want to move. But the fact remains, you are losing far more money by continuing to pay that mortgage than you ever will be on your potential stock losses due to banks getting hit by foreclosures and strategic defaults.
They are idiots and asses why? because they are doing something to better their lives and their situations? because they are doing something you dont have the balls to do even though you know youd benefit in the long run just like they are? They are no more idiots and asses that make business decisions every single day in this country to go out of business, back out of a contract, lay people off, etc, due to the economy.
You are one of the sheep who is roped up in the emotional side of real estate ownership and "the american dream". well guess what, "the american dream" was a bubble that has popped and the world around us is being reshaped. You can stand idle and watch it happen around you and rant and rave about the "idiots and asses" who are actually doing something to stop the bleeding and stop more hardships for their familes or become part of it and better your personal situation in the process. Your call.
No I am one of those sheep that is roped up in the idea that you should follow the law and what you sign up for if you are able to. If I can pay my electric bill I should pay it, I would be WAY better off financially by not paying it but for some reason I don't feel like stealing.
Everyone of your comments is pointing to the need of people to be selfish, selfish, selfish. So you are perpetuating this entire problem. They will better themselves in the short run but as they are dragging down the entire community they will be right there with everyone else at the bottom. Thanks!
05-07-2010, 09:50 AM
#145
Drifting
You need to read between the lines. He was insinuating that to have theories like that, theories of ecomonic collapse, failures of governments, etc, is to be an extremist, potentially an anarchist, or worse. The cabin reference goes back to the type of people who hide out in the mountains of west virginia and think the world is coming to an end. A notorious face and name to go along with this would be Ted Cacynski (spelling is probably off), the "uni-bomber".
So sure, you are correct in that if the economy collapes and money is now meaningless, being in a remote cabin with the proper survival resources is actually a great place to be, but the way the poster here was talking about it, it was meant to be an insult toward me and insinuated that im "off the deep end" or something. However the souces quoted in several articles about this potential coming collapse prove that im am not some lunatic on the fringe...my worries are backed up by deeply researched high profile studies done by well respected firms and institutions....not exactly a cabin in the woods....
So sure, you are correct in that if the economy collapes and money is now meaningless, being in a remote cabin with the proper survival resources is actually a great place to be, but the way the poster here was talking about it, it was meant to be an insult toward me and insinuated that im "off the deep end" or something. However the souces quoted in several articles about this potential coming collapse prove that im am not some lunatic on the fringe...my worries are backed up by deeply researched high profile studies done by well respected firms and institutions....not exactly a cabin in the woods....
While I think the "doom and gloom" guys are probably respectable, properly educated people... they always say the same thing... and we're all still here. They've been doing that for years...and we're still here. They'll always be those guys out there... but the end of the world still hasn't happened...
Also, it's not everywhere that this is happening, housing prices in my area are now moving up. So if you walked away now... you'd be buying high and selling low... not really the best decision...but YMMV
05-10-2010, 11:51 PM
#146
Drifting
The 3rd segment in the 5-9-2010 60 minutes profiled Strategic Defaults and was titled 'Walking Away'. This story profiled Arizona real estate and a young couple who are doing a strategic default. This couple has lived in their house rent-free for 5 months and expect to get booted out in July. This couple openly said that they could afford the current house payment but boo-hoo bought when the prices were too high thinking they were going to go higher. They even put a 10% down payment too.
All I can say is as a landlord, I won't be renting to anyone having done a strategic default and I hope others might follow suit. There is no law on the books about discrimination against defaulters- at least yet. I would hope banks will unite and band together to screw these people when they do come back and need a loan for a house.
These defaulters need to be taught a lesson that there is no free lunch and that past actions can cause severe consequences in the future. A short-sale is far more honorable than hanging out in the house until the Sheriff comes to kick you out.
All I can say is as a landlord, I won't be renting to anyone having done a strategic default and I hope others might follow suit. There is no law on the books about discrimination against defaulters- at least yet. I would hope banks will unite and band together to screw these people when they do come back and need a loan for a house.
These defaulters need to be taught a lesson that there is no free lunch and that past actions can cause severe consequences in the future. A short-sale is far more honorable than hanging out in the house until the Sheriff comes to kick you out.
05-12-2010, 01:30 PM
#149
Registered but harmless
Join Date: Aug 2005
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We've lived in it the house over a decade, so the house is currently worth $500K+ more than the mortgage, and we can afford the payments, so we'll just continue to pay the mortgage.
05-12-2010, 01:38 PM
#150
Drifting
I'm sorry, I just don't understand this... how does being underwater have anything to do with not paying your mortgage? I can understand if you can't afford your home due to job loss, etc... But you own a property, it's not worth as much now as it was, but there is risk to every investment. No one forced you to buy a home. When you buy a house and it goes up in value and you sell, do you give that profit to the bank? You need a place to live anyway, and you should have bought only the home you could afford (meaning you should be able to afford the monthly payments). You continue to live in your home, and eventually you pay it off, and now you hold an asset.
This is what got us into this mess to begin with... people not taking responsibility for their actions.
Maybe someone can explain this to me, because I really just don't understand this...
OP, have you walked away from your mortgage? I would really be interested to see what happened to someone when that occured. I bet there are only a small # of areas you could get away with this, places that have a glut of homes for sale, but any larger area, and the bank if going to take you to the cleaners.
This is what got us into this mess to begin with... people not taking responsibility for their actions.
Maybe someone can explain this to me, because I really just don't understand this...
OP, have you walked away from your mortgage? I would really be interested to see what happened to someone when that occured. I bet there are only a small # of areas you could get away with this, places that have a glut of homes for sale, but any larger area, and the bank if going to take you to the cleaners.
05-12-2010, 01:41 PM
#151
Registered but harmless
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Oh, and since property values have started to increase in some major areas per http://www.dqnews.com/ , one should make sure one's home value isn't increasing when defaulting. 
05-12-2010, 01:43 PM
#152
Drifting
Probably because she was living beyond her means. Any CC should be paid off at the end of the month...otherwise pay cash. Makes the interest rate moot.
05-12-2010, 02:04 PM
#153
I'm sorry, I just don't understand this... how does being underwater have anything to do with not paying your mortgage? I can understand if you can't afford your home due to job loss, etc... But you own a property, it's not worth as much now as it was, but there is risk to every investment. No one forced you to buy a home. When you buy a house and it goes up in value and you sell, do you give that profit to the bank? You need a place to live anyway, and you should have bought only the home you could afford (meaning you should be able to afford the monthly payments). You continue to live in your home, and eventually you pay it off, and now you hold an asset.
This is what got us into this mess to begin with... people not taking responsibility for their actions.
Maybe someone can explain this to me, because I really just don't understand this...
OP, have you walked away from your mortgage? I would really be interested to see what happened to someone when that occured. I bet there are only a small # of areas you could get away with this, places that have a glut of homes for sale, but any larger area, and the bank if going to take you to the cleaners.
This is what got us into this mess to begin with... people not taking responsibility for their actions.
Maybe someone can explain this to me, because I really just don't understand this...
OP, have you walked away from your mortgage? I would really be interested to see what happened to someone when that occured. I bet there are only a small # of areas you could get away with this, places that have a glut of homes for sale, but any larger area, and the bank if going to take you to the cleaners.
1)You are about to start a family and know your income will be strained with a new baby
2)You are about to start a family (or have a family) and have a place that is far too small...but are locked into a mortgage and cannot move
3)your neighborhood has become unsafe due to gang activity, shootings, drug sales, assaults, and other violent crimes and as a result you value your safety more than that of your credit rating
4)You live in a large multi-unit building and see the trends of the last few years and the continued losses mounting in every unit that goes for sale. All signs point to things continuing to get worse and EVERY single payment you make is not helping your bottom line at all because your value is dropping every month by several times the amount of principle you are paying off.
5)You wish to move closer to loved ones and your personal happiness is being significantly effected by your current location.
6)you intend to move into a rental and have absolutely no desire or plans to own another home for several years, if ever.
7)your payments on your underwater mortgage put you in a position of not being able to save. you know you can save several thousand dollars in a very short amount of time, prior to being forced out of the home in order to pay off other debts and far better position yourself for the future ahead.
8)You have no need for any sort of loans of any type in the next few years and a drop in credit from a shortsale and/or foreclosure will have no impact on you whatsoever. So your car insurance may go up...whoopdie doo. And i know its been implied but i have never known a single person whose employment status was in any way tied to their credit rating.
9)your job is being transfered and you have no choice but to lose your job or move....and you cannot afford to pay the difference on what your owe on your mortgage and what the home is worth.
And sure, if you continue to pay your mortgage..EVENTUALLY it will be yours....30 years from now....(or however many years are left in your term).
Have you ever done the math on that? Even with desireable interest rates, if you pay month to month for 30 years you end up paying hundreds of thousands of dollars in interest over the course of that loan, and in the past, some, if not all of that money, was easily recouped in the fact that the values increased...not anymore....
so now you pay a total of 500,000 for a home you financed 225,000 dollars for and in the end, its worth 100,000.....
you do the math....i dont know about you, but my credit score, while in the 800s, is NOT worth several hundreds of thousands of dollars in wasted money to me. Id rather keep that money to myself, do a short sale, and be "forced" to wait 2-3 years to buy a new home (as if i would even WANT to buy a new home in that amount of time)
If you do some research you will see that this is becoming more and more and more common and all research points to this sort of strategic default increasing in the next several years. Yes, this will further depress prices and cause more issues...the question is, if you dont really care about your home, how could you NOT join in knowing that if you dont, all you are doing is further deepening your losses and putting yourself in a WORSE position...oh, but you do have that good credit rating....
Thanks but no thanks...you can have my credit rating....i will take my life back please.
05-12-2010, 02:46 PM
#154
Senior Moderator
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4)You live in a large multi-unit building and see the trends of the last few years and the continued losses mounting in every unit that goes for sale. All signs point to things continuing to get worse and EVERY single payment you make is not helping your bottom line at all because your value is dropping every month by several times the amount of principle you are paying off.
Life's a bitch, be a man and own up to your responsibilities 7)your payments on your underwater mortgage put you in a position of not being able to save. you know you can save several thousand dollars in a very short amount of time, prior to being forced out of the home in order to pay off other debts and far better position yourself for the future ahead.
8)You have no need for any sort of loans of any type in the next few years and a drop in credit from a shortsale and/or foreclosure will have no impact on you whatsoever. So your car insurance may go up...whoopdie doo. And i know its been implied but i have never known a single person whose employment status was in any way tied to their credit rating.
that I don't even know where to begin.
Last edited by NSXNEXT; 05-12-2010 at 02:49 PM.
05-12-2010, 03:03 PM
#155
Senior Moderator
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The problems with the homeowners who bought during the peak is that that have no skin in the game. 0 down loans, negative amortization loans.....
Sorry but I have no sympathy for you.
Had they put 20% down like they should have, there would be a hell of a lot of benjamins keeping them in the home.
Sorry but I have no sympathy for you.
Had they put 20% down like they should have, there would be a hell of a lot of benjamins keeping them in the home.
05-12-2010, 03:07 PM
#156
Who told you to have a baby if you couldn't afford it?
That is none of your business or concern. if people want to have a family so be it, otherwise fuck off.
Probably should have thought about that before you bought your place.
yeah, me and the millions of others who now see the value and prudence of strategic default. again, if you are high and mighty about your situation, kudos to you, enjoy your depreciating asset and your high credit score.
So the bank should pay for that?
yes, why not. as a matter of fact, the money i save by not paying my mortgage, and furthermore, inject back into the ecomony, will cause more of a stimulus to the ecomony than anything else going on right now...look it up, thats a fact.
So don't sell
i dont want to be locked in. no one should have to suffer and be locked in, if you want to stay where you are at, congrats to you. i dont want to be where im at. again, none of your business
Boohoo Life's a bitch, be a man and own up to your responsibilities
tell that to the banks and businesses that strategicallly default on investments all the time. we give bailouts to GM, banks, you name it...ill take my bailout now thank you.
So? What does that have to do with owning up to your responsibilities?
nothing, and i couldnt care less
Not being able to save has nothing to do with your home being underwater. It means you bought more house than you can afford.
according to you. many people DID exactly as they should....20% down, got a great rate, etc...and STILL are very far underwater...what do you say to them oh wise and all knowing and all arrogant one? Id LOVE to hear what you think of those people...
Do you know anyone that applied for a professional position that had credit problems? I know my company checks credit.
nope, i have a professional position, as do many many family and freinds...not one can ever recall being subject to a credit check. and i would also add that there are hundreds of thousands of doctors and lawyers and otherwise brilliant people out there defaulting either strategically or because of job loss and they will not be worried about this job = credit score bullshit because times are changing and it doesnt matter
Honestly the rest of your arguments are such complete that I don't even know where to begin.
That is none of your business or concern. if people want to have a family so be it, otherwise fuck off.
Probably should have thought about that before you bought your place.
yeah, me and the millions of others who now see the value and prudence of strategic default. again, if you are high and mighty about your situation, kudos to you, enjoy your depreciating asset and your high credit score.
So the bank should pay for that?
yes, why not. as a matter of fact, the money i save by not paying my mortgage, and furthermore, inject back into the ecomony, will cause more of a stimulus to the ecomony than anything else going on right now...look it up, thats a fact.
So don't sell
i dont want to be locked in. no one should have to suffer and be locked in, if you want to stay where you are at, congrats to you. i dont want to be where im at. again, none of your business
Boohoo
Life's a bitch, be a man and own up to your responsibilities tell that to the banks and businesses that strategicallly default on investments all the time. we give bailouts to GM, banks, you name it...ill take my bailout now thank you.
So? What does that have to do with owning up to your responsibilities?
nothing, and i couldnt care less
Not being able to save has nothing to do with your home being underwater. It means you bought more house than you can afford.
according to you. many people DID exactly as they should....20% down, got a great rate, etc...and STILL are very far underwater...what do you say to them oh wise and all knowing and all arrogant one? Id LOVE to hear what you think of those people...
Do you know anyone that applied for a professional position that had credit problems? I know my company checks credit.
nope, i have a professional position, as do many many family and freinds...not one can ever recall being subject to a credit check. and i would also add that there are hundreds of thousands of doctors and lawyers and otherwise brilliant people out there defaulting either strategically or because of job loss and they will not be worried about this job = credit score bullshit because times are changing and it doesnt matter
Honestly the rest of your arguments are such complete
that I don't even know where to begin.
05-12-2010, 03:08 PM
#157
The problems with the homeowners who bought during the peak is that that have no skin in the game. 0 down loans, negative amortization loans.....
Sorry but I have no sympathy for you.
Had they put 20% down like they should have, there would be a hell of a lot of benjamins keeping them in the home.
Sorry but I have no sympathy for you.
Had they put 20% down like they should have, there would be a hell of a lot of benjamins keeping them in the home.
not true anymore...simply NOT true....if i put down 20% but im 50% upside down, fuck it, im still walking....who in their right mind sits around and thinks its smart to take these losses? you are the fool here...
05-12-2010, 03:23 PM
#158
Team Owner
If this were any other kind of investment, you wouldn't be able to just let someone else take your losses. Why should real estate be any different?
05-12-2010, 03:33 PM
#159
why? i dont know...but it is....the laws say it is...just ask any bank or business that defaults strategically what their motivations are and how they feel about it.
My mortgage contract says that the home is the collateral for my mortgage...should i stop paying, i must sacrafice my home per the terms of the contract. Im MORE than happy to hold up my end of that bargin and its perfectly legal. As is their right to damage my credit as a result.
Hell, i would even be willing to take out a loan to cover the difference between what is owed and what the sale price would be, because i can certianly pay it...but NO ONE, even with my excellent credit, will give me that loan...so even though i would PREFER to pay my debt (via a loan) to cover that loss so that i could actually be free to move (and not have to take that credit hit) i cant even do that! thats why this whole thing is fucked up and why its at a point where all you can do is throw your hands up and say fuck it. the system is working 100% against people who pay their bills, thats the world we live in right now
05-12-2010, 03:53 PM
#160
I'm Down Right Fierce!
^ Well glad to see we have a professional here who knows what he's talking about. So everyone listen to the genius and default on your mortgage payments so that you can "walk away" without any consequences.
Now that the bullshit is out of our systems, considering that I deal with alot of clients and cases regarding mortgages and foreclosures (both Banks and consumers), I can tell you that there are far more long term repercussions then you think for just simply defaulting on your mortgages and allowing your home to be foreclosed upon.
You only lose your home and walk away without having to pay for your loan if the bank opts for short sale/private foreclosure.
If a bank knows you make good money, they could always choose to go through judicial foreclosure and then seek a deficiency judgment against you.
And as people have already said before, alot of the mortgage problems stem from people who simply bought homes during the peak of the economy without any down payments, or simply bought homes out of their price range.
To blatantly tell people to default on their mortgages so that they can re-negotiate their loan and/or allow the lender to foreclose is the dumbest thing in the world that has gotten alot of CA attorneys into trouble.
Now that the bullshit is out of our systems, considering that I deal with alot of clients and cases regarding mortgages and foreclosures (both Banks and consumers), I can tell you that there are far more long term repercussions then you think for just simply defaulting on your mortgages and allowing your home to be foreclosed upon.
You only lose your home and walk away without having to pay for your loan if the bank opts for short sale/private foreclosure.
If a bank knows you make good money, they could always choose to go through judicial foreclosure and then seek a deficiency judgment against you.
And as people have already said before, alot of the mortgage problems stem from people who simply bought homes during the peak of the economy without any down payments, or simply bought homes out of their price range.
To blatantly tell people to default on their mortgages so that they can re-negotiate their loan and/or allow the lender to foreclose is the dumbest thing in the world that has gotten alot of CA attorneys into trouble.