Can't pay? Just walk away

somdrenter

Sorry, I'm not Patch...
Troubled homeowners: Can't pay? Just walk away
By Les Christie, CNNMoney.com staff writer
February 6 2008: 10:21 AM EST

More and more borrowers are watching their house values sink while the cost of their loans skyrockets. What to do? Skip out on the mortgage all together.

NEW YORK (CNNMoney.com) -- Mortgage payments are set to jump. Home prices have plunged. "I'm outta here."

Homeowners are abandoning their homes and, more importantly, their mortgages, rather than trying to keep up with rising payments on deteriorating assets. So many people are handing their keys back to lenders that a new term has been coined for it: jingle mail.

…. Current lending practices have created an environment where a measure as extreme as abandoning a home actually makes sense to some people.

Many buyers put little or no money down, so they don't have much invested in them. That leaves them with little incentive to keep making payments when a home's market value dips below the balance of the mortgage….

…. The trend of walking away is most pronounced among real estate investors, according to Jay Brinkman, an economist with the Mortgage Bankers Association (MBA).

But families are doing it too. "If they have to stretch to make mortgage payments for a home that will not recover its value, then yes, they may walk away," he said.

Often they chose hybrid adjustable rate mortgages (ARMs) that came with low initial payments. After a few years, interest rates on these loans reset higher. But buyers thought they could count on the increased value of their homes to refinance into affordable, fixed-rate loans….

Troubled borrowers are walking away from their homes - Feb. 6, 2008
:lalala:
 

crabcake

But wait, there's more...
Problem #1

Many buyers put little or no money down, so they don't have much invested in them.

Problem #2
But buyers thought they could count on the increased value of their homes to refinance into affordable, fixed-rate loans….

Why is it Uncle Sam's or the taxpayers' fault that people not only fail to cover their own bases by buying a home the smart way by putting a down payment on the loan (too many champagne tastes with beer budgets?), but that they also gambled by "thinking" they could count on something they have no control over (economy)? :confused:

I'm tired of hearing people asking others to bail out their problems. Walking away from the mortgage doesn't help them because it'll damage their credit for many years. All it does is hurt the rest of the economy. Thanks a lot dumbasses!::buttkick:
 

godsbutterfly

Free to Fly
The Courts got stricter on Bankruptcy Laws so now people are just simply not paying and letting the property be Foreclosed on? I'm not advocating Bankruptcy either - buying within your means would be the smartest thing to do. This article makes it seem as though people are not really concerned about how Foreclosures are affecting their credit because it really isn't that big of a deal anymore.
 

vraiblonde

Board Mommy
PREMO Member
Patron
The trend of walking away is most pronounced among real estate investors

Hello?

But for a homeowner who lives in the residence it makes absolutely no sense. So your home is never going to recover its value? Never ever?? The home will most certainly recover its value. ALL homes increase in value eventually, even if you just adjust for inflation.

If they'd keep paying on the house, in 10 years it will not only recover its value but they'll have a nice bit of equity in it. So instead they what? Give up their home and their neighborhood, their yard and their room, to rent some ####hole apartment???? To rent a house and make their landlord's mortgage payment???

That is absolutely insane. Now CNN and the rest of these loonies have gone too far with these crazy stories. And I'll bet you $10 that the "mortgage crisis" miraculously clears up the second Hillary or Barack take their oath of office.

:rolleyes:
 

vraiblonde

Board Mommy
PREMO Member
Patron
Walking away from the mortgage doesn't help them because it'll damage their credit for many years.

And not only will their home not increase in value because they don't HAVE a home, but now they will either NEVER have a home, or they'll have to scrounge up another sub-prime mortgage and they'll be right back where they started.

I have to go say some cusswords. brb
 

Kyle

ULTRA-F###ING-MAGA!
PREMO Member
... And I'll bet you $10 that the "mortgage crisis" miraculously clears up the second Hillary or Barack take their oath of office.

:rolleyes:

Just like the homeless issue, that was "growing" from 1981 to 1992, disappeared from Jan of 93 to Dec of 2000.
 

somdrenter

Sorry, I'm not Patch...
And not only will their home not increase in value because they don't HAVE a home, but now they will either NEVER have a home, or they'll have to scrounge up another sub-prime mortgage and they'll be right back where they started.
...
And while a mortgage default can savage a person's credit record, trying to pay off a loan they can't afford could be worse for borrowers if it leads to bankruptcy, said Craig Watts, a spokesman for the credit reporting firm Fair Isaac.

Credit scores are hurt much more by missing multiple payments - on credit cards, cars and so on - than by a single foreclosure.

"The time it takes to regain your credit score [after foreclosure] can be shorter than after bankruptcy," said Watts.

It typically takes three years of a spotless payment record after a bankruptcy before credit scores recover enough for someone to think about buying a home again, he said. After abandoning a mortgage, a person may be able to buy a new house in two years or less.
 
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crabcake

But wait, there's more...

I think that anyone who has a foreclosure/bankruptcy on their credit history should be automatically required to put a 20% down payment on any future home purchase. I know there are all kinds of situations/circumstances out there (some of which may have been unavoidable) but it's time people accept personal responsibility for the choices they make in life, and accept the consequences of those choices vs placing that burden on the rest of the population.

If you don't put anything down on a house you're buying, you are far more likely to walk away (all you lose is credit score points) than if you had plunked down say $40K of your own, hard-earned/saved money.
 

vraiblonde

Board Mommy
PREMO Member
Patron
What part of "fiscal irresponsibility" is not getting through to you?

Every story that you or Patch posted is about some schmuck who got themselves in hot water because they bought more than they could afford. Would you feel the same sympathy toward someone who could budget a $300 a month car payment, then went out and bought a $250,000 Ferrari? Because that's what we're talking about here - people who bought way more than they could afford.

Real estate investors are a different story. They do this for a living, like trading stocks. They take a hit and go, "Grrrrr" then move on to the next project. And most of the sob stories you all post refer almost specifically to investors, with a "real person" thrown in there to make it sound like IT COULD HAPPEN TO YOU!!!! :jameo:

NOW is the time to buy a home. Interest rates are sitting at around 5.5% for a 30-yr fixed, and housing prices have dropped. It's crazy to sit there, paralyzed by these hysterical news stories, and let this opportunity pass you by.
 

Pushrod

Patriot
NEW YORK (CNNMoney.com) -- Mortgage payments are set to jump. Home prices have plunged. "I'm outta here."

…. Current lending practices have created an environment where a measure as extreme as abandoning a home actually makes sense to some people.

Many buyers put little or no money down, so they don't have much invested in them. That leaves them with little incentive to keep making payments when a home's market value dips below the balance of the mortgage….

…. The trend of walking away is most pronounced among real estate investors, according to Jay Brinkman, an economist with the Mortgage Bankers Association (MBA).

Often they chose hybrid adjustable rate mortgages (ARMs) that came with low initial payments. After a few years, interest rates on these loans reset higher. But buyers thought they could count on the increased value of their homes to refinance into affordable, fixed-rate loans….
:

Wow Larry, you were right in your theory the other day. It IS mostly investors who have done this. Good call!
 

vraiblonde

Board Mommy
PREMO Member
Patron
Wow Larry, you were right in your theory the other day. It IS mostly investors who have done this. Good call!

Well, for ####'s sake :rolleyes:

They do these stories that revolve around one idiot who made a mistake and lost their family home, acting like they are the norm instead of just some dummy, then throw in as an aside that most of the people having problems are investors and speculators.

Then people like Renter pick up on it, get hysterical, and the housing market tanks. There should be a law against the media ruining an industry for their own gain because that is just wrong and gives the news people significantly more power than what they should have.
 

refi-rep

New Member
Hello?

But for a homeowner who lives in the residence it makes absolutely no sense. So your home is never going to recover its value? Never ever?? The home will most certainly recover its value. ALL homes increase in value eventually, even if you just adjust for inflation.

If they'd keep paying on the house, in 10 years it will not only recover its value but they'll have a nice bit of equity in it. So instead they what? Give up their home and their neighborhood, their yard and their room, to rent some ####hole apartment???? To rent a house and make their landlord's mortgage payment???

That is absolutely insane. Now CNN and the rest of these loonies have gone too far with these crazy stories. And I'll bet you $10 that the "mortgage crisis" miraculously clears up the second Hillary or Barack take their oath of office.

:rolleyes:


Refinancing, has picked up since the rates have lowered but yeah once a new president goes into office, I see confidence levels in our country going up.
 

thurley42

HY;FR
Well, for ####'s sake :rolleyes:

There should be a law against the media ruining an industry for their own gain because that is just wrong and gives the news people significantly more power than what they should have.

:yeahthat:
It's a lot more than just the housing issue the media ruins!!!
 

dn0121

New Member
NOW is the time to buy a home. Interest rates are sitting at around 5.5% for a 30-yr fixed, and housing prices have dropped. It's crazy to sit there, paralyzed by these hysterical news stories, and let this opportunity pass you by.

I bought in July 06 and July 07, both times got a 5.5% interest rates. I wish they would drop lower then that.
 

somdrenter

Sorry, I'm not Patch...
What part of "fiscal irresponsibility" is not getting through to you?

Every story that you or Patch posted is about some schmuck who got themselves in hot water because they bought more than they could afford. Would you feel the same sympathy toward someone who could budget a $300 a month car payment, then went out and bought a $250,000 Ferrari? Because that's what we're talking about here - people who bought way more than they could afford.

Real estate investors are a different story. They do this for a living, like trading stocks. They take a hit and go, "Grrrrr" then move on to the next project. And most of the sob stories you all post refer almost specifically to investors, with a "real person" thrown in there to make it sound like IT COULD HAPPEN TO YOU!!!! :jameo:

NOW is the time to buy a home. Interest rates are sitting at around 5.5% for a 30-yr fixed, and housing prices have dropped. It's crazy to sit there, paralyzed by these hysterical news stories, and let this opportunity pass you by.

Sorry Vrail, I have no sympathy for these guys. Zero. None.

Take a look at the county records some time. Maybe even RealtyTrac. You’ll see that it’s not just the investors that jumped on the wagon. It is the Joe schmucks, and these are not isolated incidences.

What’s crazy is buying a home at the top of the market. So yes, I sit here. Not paralyzed, but with no worries about which way the housing market is going. Inventory remains high in our area and we’re not even in the “selling season”. If I wanna go look at some open houses this weekend sure. Maybe, but Na, I got better things to do. There’s no rush. The homes that came on the market today will sit on the market for another few months, plus some.

Save the “NOW is the time to buy a home” spiel for the realtors that pay for your advertising services.
 

somdrenter

Sorry, I'm not Patch...
Wow Larry, you were right in your theory the other day. It IS mostly investors who have done this. Good call!
psst. you missed the next line
But families are doing it too. "If they have to stretch to make mortgage payments for a home that will not recover its value, then yes, they may walk away," he said.
 

somdrenter

Sorry, I'm not Patch...
There should be a law against the media ruining an industry for their own gain because that is just wrong and gives the news people significantly more power than what they should have.
Yea, that's it. It’s not the no-doc, no money down, interest only, negative amortized, option ARM; it’s the media!!
 

Larry Gude

Strung Out
I'll...

That is absolutely insane. Now CNN and the rest of these loonies have gone too far with these crazy stories. And I'll bet you $10 that the "mortgage crisis" miraculously clears up the second Hillary or Barack take their oath of office.

:rolleyes:


...take that bet. Real estate gambling knows no party. Everyone in DC is in favor of this stupid stimuli plan AND in support of bailing each other and their buddies out on those Vegas condo's they're all stuck with.
 

somdrenter

Sorry, I'm not Patch...
They do these stories that revolve around one idiot who made a mistake and lost their family home, acting like they are the norm instead of just some dummy, then throw in as an aside that most of the people having problems are investors and speculators.
Investor or "one idiot", it matters little when the net result is the same.
 
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