When is it ok to walk away?

Help….we have a house that was valued at $400K when we purchased it 4 years ago new. Our 1st mtg is valued at $268K, and now the assessed valued has dropped to $299. Which leaves us with a little equity, however our 2nd mtg is still at $140K due to some medical bills. I recently lost my position as a VP of Sales due to the economy. We really don’t want to lose our home for our son’s sake, but can’t afford both payments for very long. Is there any options for us?

Only when there is nothing else you can do. Talk to a short sale specialist in your hometown. Avoid national companies who process short sales in several states. for Colorado visit http://www.kjhomefinder.com

This is a tough decision for anyone. Beyond the credit implications, who wants to be the “bad neighbor” whose abandoned home brings down the community. We aren’t advocating walking away, but we do believe that if you walk away there is a way to do it and remain a responsible neighbor. Our service is free, currently focused on Illiinois and the Midwest. Visit us at http://www.walkawayclean.com or add your views to our forum at http://walkawayclean.wolfconsultants.com. Let us know what you think about what we’re offering.

This is utter nonsense! what does a business do when taking a loss? They take a write-off to lower their liability. So here we are with an upside down loan to value ratio created by the real estate downturn. You house is now worth less than your loan and everyone wants to walk away from the sink hole. I say let’s do it the business way and write off the loss. Why can’t we deduct the entire loss of our investment (our home)for tax savings and advantages? The appraiser says your home is now worth $60,000 less than it was a year ago, ok, let’s take a $60,000 loss and use the loss to offset our taxable obligations. In fact, perhaps we can use the loss to help offset other financial burdens. Student loans, medical bills, insurance costs can in some form be reduced or possibly forgiven. And what about the reverse side of this coin? We`already pay for a positive investment, but why can’t we also use our loss to help offset costs.

The reasons to avoid a foreclosure are profound! A foreclosure could remain on a credit history for 10+ years and lower a credit score by as much as 300 points for as long as 3 years. In a foreclosure, the bank may bill a previous owner for the difference in eventual selling price and the home loan. A successful short sale, on the other hand, may not be reported on a credit history and could impact a credit score by as little as 50 points for only 12-18 months. And in a short sale, a lender could be convinced to give up the right to pursue a settlement altogether. If you think a foreclosure is inevitable, your best bet is to contact an experienced, knowledgable realtor in your area who may be able to help you get out from under your house without going through the trauma of a foreclosure. In Northern California, the Becker and Steidlmayer Re/Max Team at http://www.topspaces.com is offering free initial consultations. Professional realtors like Becker & Steidlmayer agents are dedicated to helping distressed homeowners during these difficult times. It is in the best interest of homeowners and their surrounding communities to avoid foreclosure!

I bought a new home in 2006 In CA. I put 100K liquid cash up for the deal and got a 1st 6% interest only and a 2nd w/ 7% 15 yr interest only credit line. On a $490,000 Home 410/80 thousand split. Today I owe $490,000 for a home worth $240,000. with a payment of 3500/month for 30 years with nothing more than an option to own if I make enough equity back before the end of the loan for a tune of 1.4 million. Paying High dollar rent for a snow ball’s chance in hell to do nothing more then to refinance. 1099 or not what choice do we have but to walk away. High priced rent for ever just never own. Some of you losing money that wasn’t even really there don’t care, for your own investments sake, but how about my generation that just got in to the home owners club and was only offered only B.S. loans to overcome inflation, that just lose everything. Fool me once same on you. Fool me twice shame on me. My demographic is the 40-50 years of the home the lending markets future. Good luck sooner or later there isn’t enough money in the world to stop their money lust from becoming large scale commercial property ownership and the tax payer gets to loan them the money for 6% down 30 year fully amortized with golden parachutes and 10% equity guaranties. Could afford your home for that? Then lenders sold a bunch of nothing and now everyone is giving it back. I guess that’s the way it goes. Let a couple of these lenders go under and the home owners keep their properties and see how long it takes for the lenders to start playing far again. How do I refinance with the feds directly and can I 1099 the old lender for the difference? Bottom line the lenders can keep selling nothing and foreclosing on them to re sell as long as they keep the income tax liability’s rolling. This is the American dream the future left for your kids.

Morals versus unforseen economic cicumstances.

We are a family that is responsible, pay our bills on time and have credit scores of 760 plus. Our home is now worth $70,000 less than our mortgage; we live in Florida which has seen some of the most drastic property value decreases in the country. In the past 30 days it has declined $5,000.

We now must consider walking away from our home. Association fees continue to escalate, assesment notices keep coming as a result of others not being able to afford to pay. We have a responsibility to the lien holder but we have a greater responsibility to our children. Who could have foreseen this coming?

My wife and I struggle with what we should do everyday. There are so many mixed messages out there. In the end you will do what you have to do. And why now does it seem ok to walk away? Ask the government; they keep bailing out the banks rather than helping the people.

Anyone who thinks short sale is the best alternative should read this article. (You might think differently.)

http://online.wsj.com/article/SB124104990739271023.html

People keep saying short sale is the better alternative but in fact it still ruins your credit scores, the banks still come after you for the difference, you may (or may not) have to continue to make payments and you drag on the pain until they can agree to the sale. By the time they can agree to the short sale, you probably end up having to foreclose anyways.

I’m not sure the added stress is a good option for everyone but it depends on your situation. Banks need to do more to help without hidden strings attached especially if you see how much money in interest they take at the beginning of the loan.

Hi Monroe Carey,

In my humble opinion, you have to consider what is the equity you have in your home.What is the amount you owe to bank ?
Also think of other out of box solutions eg. Are there any ear protecting device with which your husband can continue on current job without any adverse impact ?

My husband and I are in our thirties and we bought our house 7 years ago. We are making good money we both have jobs. So we feel like we have more than some people. Over time we have noticed my husbands hearing getting worse. Last year he went to an audiologist and they said he was 70% deaf. They told him if he continued to work in his currant job then by the time he is 40 he would probubly be completly deaf. We have excellent credit. Never paid our house payment late. We have a job offer in Florida a 1000 miles away. Do we walk away from our house. We bought it for 124,000 and over the years we have done tons of upgrades, last year it was appraised at 166,000. The realtor came today and said it would only list for 99,000. WHAT!! Do you walk away? He has looked and looked for a different job here in Michigan, they are not out there. Since we are not behind we can’t get Wells Fargo to do a short sale. Do you walk away? We need advice!!

Current situation is very dicey.Both the decisions ( abandon or throw good money) have their own pros and cons. The end decision should depend upon one’s uniques situation. One has to weigh in taking hit on credit history and facing consequent circumstances versus really struggling to make payments. In my view one has to evalute what is best for one in current circumstances for him or her rather than regretting over past mistake.
I duly agree easiest thing is to give advice. Reality is known to who faces it.

the guy with two (2) no money down, interest only loans should be put in jail, 20 years, for fraud.

My goodness, I can’t even count how many comments I’ve read from people calling everyone who is upside-down or in trouble and facing foreclosure morons who are getting what they deserve. I hold a bachelors of science in biology, and my husband holds a bachelors of science in economics. We live within our means. We operate on a strict budget and never deviate from it. We have 0 credit card debt and our credit scores are well over 750. We both are employed at the same place as we were three years ago when we moved to Arizona. We decided to buy a house rather than throw away our money on rent. We were fresh out of college when we bought the house and were “green” to the home buying business. We assumed if our circumstances changed in a few years, we would just sell our house and move somewhere else. Not to mention, that is what the lenders (who were supposed to be the experts) were telling us. All we had heard is over time home values go up. No one I knew was predicting this painful crash back when we purchased. Everything looked rosy. We have made on time payments for the last three years – never once late, and always BEFORE the first of the month. Now, if anything changes in the next ten years – if my husband loses his job, if I lose my job, if I get pregnant, we will have no choice but to walk away. No adjustable rate. No purchasing a humongous home not within our means (we purchased our house for 234,000 and it’s 1400 square feet). Nothing irresponsible. But since we purchased the value has plummeted by $70,000. We were supposed to see this coming? We were supposed to somehow predict this? My goodness people, get off your high horses! And look over your shoulder, because all of you who are puffing yourselves up with pride because you got LUCKY and managed to escape this mess unscathed will have bad things coming to bring you back down to the level of the rest of us mere mortals. Get over yourselves, and whoever said people should be thrown into debtors prison – my goodness, I feel sorry for anyone that knows you. Heartless unfeeling jerk who is CLEARLY incapable of experiencing any form of empathy, and who heard a couple of stories about a couple of homeowners who bought ridiculously huge homes nowhere near their means with an adjustable rate and decided they were an expert on everyone else’s situation.

I think that home values in the U.S. are artificially blown up by the readily available mortgages/credit from all kinds of financial institutions. A financial crisis is bound to happen when 90% of Americans are living on credit. Leased or financed cars, mortgaged homes, financed TV sets and so on. Real estate prices wouldn’t be as high as they are right now if you had to put up at least 50% down payment on your mortgage. In a sense, our own greed and desire to have things we can’t really afford is what caused the current financial crisis. That and the fact that our banks eagerly and happily accepted our greedy desires in order to profit on them.

From another angle, I am a Realtor in Gig Harbor, WA. For the last 20 years I have had income of over $250K each year. This year I have made $7,200.00 from a closing I had in March. No one ever thinks about the Realtor who can not get unempoyment and now can not refi our home. I have to walk away and as a realtor will not be able to buy a new home in years do to new guide lines set up with the banks. So I have no good feelings for thebanks that put us here in the first place.

There IS a more responsible alternative to walking away that will allow the homeowner to save some of their credit and land on their feet. You can negotiate a short sale — either take a course and learn how to do it yourself or have someone do it for you. Check out http://www.thenegotiatedsolution.com. This is an online video tutorial that teaches you everything you need to know to do it yourself. If you want help or want someone to do it for you…they offer Coach and Full Service options as well.

I have posted a comment 3 months ago in response to the diverse opinions posted on this site and still the economy is worse than it was 3 months ago. The anticipated bottom has not hit and if it did, we will most-likely be on or near bottom for a long few years.
Has anyone has thought of a solution to walking away. I wanted to do what is right and not just walk away. I will hold on to my house as long as I can. PLEASE GIVE ADVICE OR SHARE YOUR EXPERIENCE TO A SOLUTION THAT WORKED IN PLACE OF JUST WALKING AWAY (e.g. – Short sell/Negotiate with Lenders/Put house on market/Bankruptcy/etc…).
“Us folks don’t have the political clout some Big Fellas out there who has blank checks to write off their debts from the Feds- All we have are just political schemes or mere rhetoric to vent off our steam with no action behind it”

Many so-called “responsible” homeowners complain they will have to carry the financial burden when distressed homeowners walk away. Where were you when the banks and mortgage companies swooped down on unsuspecting buyers/borrowers with clever marketing, slick promo’s and outrageous and unscrupulous apprasals? That’s the problem, we sit back in our little shells and watch the tragedy take place. Then we sit back further still and wag our fingers and tongues when it all hits the fan.

I’m certain a few of you knew exactly what was transpiring and could really see what was coming down the road. But nobody said anything! Nobody warned anybody! We continued to let the situation blossom until it burst. And like it or not: It’s too late to complain!!! The wheels are in full forward motion and I suggest you get ready for a long and bumpy ride.

I asked my CU how a home appraises for one amount at closing and another when it’s time to sell/refinance? It seems that when the bank wants to get you in a home, it will appraise for exactly the right amount. But it’s a entirely different story when it’s time to sell or refinance. The banks and credit unions will get their money, one way or another. It’s money game and we are the pawns!

Don’t place your financial future in the hands of hands of your local bank or credit union, they don’t care about you and your family!

I’m tired of hearing from people shaking the proverbial finger at would-be “walkers.” This environment could have been controlled better by lenders either demanding down payments or refusing to allow homeowners a certain percentage of equity. I’m not here to necessarily blame one side or another for this situation as this environment has been created due to a number of factors. I am a little disappointed though in hearing from people who don’t know what it’s like to suffer through a job loss or a financial shortcoming and have to provide for several children on very little money only to scold those who have. If you make an investment that gives you negative returns then do what you can to cut your losses. All I know is my family’s well-being is what’s important to me and if you don’t like my decision to walk away then turn your attention to other factors that lead to this situation.

Fixed rate mortgage 20 yrs. Then Homecomings buys the mortgage and in less than 1 yr., they deny me the use of my equity and refuse to release payoff figures to other would be lenders. They committed a crime worse than rape. Each documented victim should receive $550,000 dollrs from GMAC/Homecomings and this still would not cover the pain and suffering this company has knowingly caused so many hard working American families. Who reaped the benefits from all of the stolen properties/equity taken? Will anyone go to prison for life? Will our government give us money to survive like it sending to Iraq? I work everyday and some of my money is in Iraq but the real terror is White Collar Crime in America. The greed, lies, stealing, and corruption has brought this once proud country to it’s knees. Please God! Save America.

No Regrets , Hell banks fail every day,
When a lender accepts (interest)it is simply a business transaction. If the bank is in a bind for capital ,they have no trouble cutting your credit lines. so whith that being said , plan your business (mortgage escape)with yourself in mind and do what any business would do , cut your losses. Banks and insurers are the the best at protecting their
interest(play on words.)

To the people who lost jobs, have health issues, etc…things beyond their control (assuming they could afford the mortgage in the first place), well that could happen to anyone. BUT for the rest of you: Why are you blaming banks, and brokers? Didn’t you READ before you signed? What, did you think an adjustable rate could only go down? Don’t you realize an adjustable rate is not for YOUR benefit, meaning the rate goes UP and the BANK makes MONEY? I have no sympathy for these people. I have sympathy for ME who have to pay for all these deadbeats in the long run.

I read some of the comments posted hear enough to see 3 sides, the righteous people, the ignorant people, and the special interest/politicians. Interestingly, I have put myself on the 3 sides. I have taken a position that I should be responsible enough to the mess I put myself in. Also taken a position that I realized for being ignorant, I was only part of the reason how I got into this mess; I have succumbed to my weaknesses aided by corporate predatory tactics. But, I strongly have taken a position that the special interest and politicians are mostly why I am here in this mess. The special interest is special because, it is for their purpose and profit. The politicians are the vehicles to make this special interest into law; which further widens the great disparities among us. Now don’t get mad of my statement yet, because we know that there are many laws have been passed to protect the interest of the general public – without question. But, the political and legal wheels at congress are far to complex for us ignorant people to see the net benefits relative to corporate America. There’s more than one way to skin a cat; that is us the ignorant people about 95% of us…

WE ARE ALL TO BLAME. There’s one way to beat this system is to be a member of the 5% and become Robin Hood for the 95% – I hope I can be one

Get on top of the food chain…

Henry/Hauppauge (Long Island) New York

We too are having trouble with our mortgage; the lenders would rather take the easy way out and foreclose, then allow us to restructure the loan so that we keep paying! and keep the house. It’s not our fault, its the greedy lendors and investors. yes, we’re going to walk away when they finally kick us out. we’ve lost 40% of our homes value. Did you see that?? 40% of the the value!!!!! In our entire neighborhood!! We can walk away, take a credit hit, all our other credit is fine, then just repurchase again after all this smoothes out in a couple years. The bank wont help? Fine, Im outta here, take your $500K loss on a home that’s now worth $225k, because you’re too stupid, Countrywide, to see that not only are you crashing your own company, (they dont care anyway, their job is not to help homeowners, but to make money for the investors) but making it harder for those that want to keep the house, keep the loans and keep it going. O well, 26 calls to the lendor over 5 months…we’ve tried. Do they care? Not really, as the 50+ homes forclosed by CW in a town so small as ours, shows, Capitalism at any cost, profit now trumps losses later and damned those who cant handle it, is their motto. Just waiting for the NOD in the meantime as I save our money for rent and the next downpayment….

My wife and I bought our home Sept. 2006. Jan 3, 2008 I lost mt Job due to the Construction Industry Crash.
I found a very good job out of State. Due to no work in my City. With all plans to rent my home here. Our dreams crashed. We found out that our Mortgage payments are going to jump from 1700.00 per month to 2400.00 come this september.
We phoned the mortgage company and they were willing to extend our current term for another 5 years, as long as we stay in our home. Which we can not afford without my Job.
We have checked every avenue, to keep our home. Selling is not an option because of the Market Crash.
Nobody will talk to us until we are 2-3 months behind on our Mortgage.
We have to move now.
So, we are being forced to walk away from our home.
We told the lenders and everyone, this is what we will do. But, either they do not care. Or, they do not believe us.
We feel for all of you out there that are having to loose your home. This was our first home we bought. Who would have ever dreamed such a horrible thing would happen to so many, mamy families.
We have Excellent credit. In 3 months our lives will change horribly!

As long as big business has control over how politicians decide to spend tax dollars CEO’s in corporate america will do as they please never contemplating the consequences for their actions. (Hence, the bailout of investment firms with tax dollars)This has come to be the American way.

My wife and I bought a house 3 years ago for $480K, which was well within our means. We got in with a $30K down payment and in a neg-am loan. We knew what that meant but only had it for 1 year when we refinanced the house for $540, we took some money out to redo the driveway, pathway to the house, lawn, etc. We signed up for an adjustable to keep our payments low with the idea of refinancing into a 30 year fix in 2 years. Well, our house appreciated up to $615K last year and we had high hopes of a great 30yr rate with equity in the house. Then the housing market crashed. Our house is now worth just about what we paid for and sinking. A slightly bigger house near us just sold for $425K. We thought we could ride out this “storm” by giving up on luxuries like vacations, going out to dinner, movies,
etc etc. Well it lasted a good 4 months and then we started to dip into our savings. Another 4 months have passed and no more savings and behind in all our credit cards. We were denied any help from our lender “due to the fact that you have never been late on your mortgage payment”. Are we irresponsible for what we did? No we weren’t. We bought a house we were able to afford, lived a comfortable life, and still able to save money. But ever since the housing market has plummeted, so has our lives. My wife and 2 kids mean more to me than anyone telling me I deserve what I got especially when we did nothing wrong in order to be a homeowner. I would rather rent and live a comfortable life than be a homeowner scrounging for our next meal. FYI we are in the process of getting help to “walk away”.

Yes. Consumers often have no other viable choices, even if the mortgage lender is a supposedly “friendly” credit union.

Non-responsiveness is often the first tactic the mortgage lenders take when contacted by a mortgage-borrower in distress & asking for loan modification or another remedy, including short sale.

Soon non-responsiveness, at least in my experience with a so-called “friendly” Federal Credit Union, gives way to the credit union’s hiring (& spending close to $6,000 of the credit union’s members’s money in totally unnecessary legal fees) of an attack-dog attorney who begins his attack by submitting a demand letter–two days before a national holiday, for full & immediate payment & the even more outrageous demands that the distressed borrower (who had worked with Hope Alliance & provided a third-party certified Income & Expense Statement illustrating the borrower’s inability to pay the densely complex hybrid–97-3/piggyback & ARM mortgage) sign away his constitutional right to a trial by jury & to file for bankruptcy–among other incredible & unreasonable demands.

So walking away, by default & by necessity, many times becomes the only viable alternative the distressed borrower can consider & implement.

It is never OK to just walk away. These folks that were afforded a 0 down / interest only loans should be held accountable. They knew what they were getting into when they signed on the dotted line. When the owners walk away from their responsibility they turn that responsibility over to the rest of us.

Here is a revelation. Good job; Good home and lifestyle. No job; nothing goes unpunished and lose everything. More downfalls unforeseen? Sure. Spouse leaves and children need provisions and down to child support in most cases. I agree a bullet could be in order. But for the postings I see here on the this subject where other feel people like me should take responsibility, I did exactly that. When you people who have it so good realize the same things those that are losing right now, and it happens to you, we will see you posting the blues as well. We pay for it now, you’ll be paying later. It won’t last long with your pious attitude about taking responsibility. I did meet my responsbilities and thensome. When you leave things not because of your judgement, you still try and try and scrape on by but then have nothing. Why work harder when you did already? When you stop and say it’s time to start over. Learning from the past mistakes is what makes us human. But if we as a country are supposed to be protecting our special interests why not give more money to ourselves before helping out the rest of the world with that same money because if we lose that even more, there is no telling how much all of us will truly lose. Then how will it matter then? Maybe now I will just move to Australia.

I believe when all the odds are against you, such as in my case. Lost job marriage caput, child support, outstanding debt, barely scraping by on unemployment and just short of eating a bullet, yes I can say it was very easy to walk away. By the way, I will filing for bankruptcy very soon because of lack of options. So, Mr. Bank what will you do with all the new homes you’ve reclaimed that cant be sold even on short sale? You are now in the boat like the homeowner was. Gee, what’s your solution now?

IF walking away is your last option.. by all means do so.

Purchase a home in 2005. A fixer upper. Put the last 2 years and our money into the home. We hadn’t financed 100% and had an Alt-A ARM mortgage..because as stated I didn’t qualify for a fixed at that time. So.. the plan was.. fix it up, increase it’s value while also paying down the principle we had AND get a higher FICO score so that we now had a higher LTV better score as well as having made payments ON TIME for the past 2 1/2 years. BUT come time to refinance.. I did get my score up, fixed the house. BUT the value of the home went down so NO higher LTV.. actually LESS at this point (house appraised at $450K.. loan for $400K.. mind you it’s a small house in a middle income neighborhood on LI.. 1100 square feet. NOT a high end neighborhood AT ALL). Refinancing for me was NOT a possibility and so I started callign my lender telling them that i couldn’t afford an adjustment.. got nowhere…
Then comes Bush’s subprime fix in Dec..BUT.. I”m NOT subprime.. I’m alt-A.. SO I don’t qualify.. THen “project lifeline” comes about early this year with Wells Fargo (the investors of my note are within Wells Fargo).. oh.. but how convenient.. the group of investors MY note is with WITHIN Wells Fargo that is supposed to be participating.. conveniently ISN’T participating!! Hmm… wonder how many of us got THAT Answer..
Still trying and trying and getting nowhere.. adjustment kicked in.. $800 more than original and NOW WELL BEYOND what I can afford. Due to adjust AGAIN. Already 3 months behind.. still NOTHING from my mortgage company.. I’ve told htem i DO NOT want to walk.. I AM INTERESTED in staying.. and they would LOOSE A BUNDLE if they put my house on the market against 200 others in my town on LI!! STILL NOTHING!!
I think all these “we’re helping our borrowers” are just a bunch of PR magic meant to make the gov’t and the public think they are helping us while on the other hand taking money from the government AND STILL taking houses. THEY ARE MAKING OUT LIKE BANDITS.. and the average JOE is left without a home etc.
So..if they won’t work with me. I will not only LEAVE .. BUT will take all my appliances and all the stuff I put into the house to improve the house. I gave it my best and tried to no avail! So as far as I’m concerned the banks can go to hell!

Before you decide to “walk away”, you should ask what price you put on your honor and integrity.

When is it ok to walk away? NOW. I am one of those responsible Americans with a very high credit score and a good job who happened to buy a condo during my single years who then happened to have a life change due to marriage who is now trying to sell a condo in this crazy market where other people were largely irresponsible! We now have two mortgages, my condo has been on the market for one year, we are stressed to the max and YES I am willing to walk away and lose my very high credit score. Afterall..I am not a credit score..I am a human being.

What if you lose your job and cant afford to stay and because of the lousy real estate market cant sell it even for a small loss? Is their another option besides walking away?

We can no longer afford to be confused. We are so very accepting of what he hear through the Media, i.e. weapons of mass destruction. It is no conincidence that America (the powers that be) create situations and then go in after the fact to ’save the day’ If anyone believes that after years of desiring to own a home (the American Dream), it suddenly became possible and everyone practiced the buy/flip scenario. We didn’t go looking for homes, lenders showed up out of the woodwork with the buy with no moneyh slogan. If it could be done on ‘Flip this House’, certainly would we. It looked so simple. No coincidence that as soon as we learn the game, the games changes. My home was appraised at $1,200,000 last year while my credit would allow refinance/no doc. Coincidentally my house cannot even sell for $550,000 right about now. With the laws changing from day to day and infinity being the time frame, no amount of salary will cause me to pay $7000 monthly for a house that’s worth half the price. If and when my house ever reaches $1,200,000 again, it will be antiquated. I’m sure builders will be offering perks beyond belief then. (remember we’re all going GREEN). I think it is a personal decision one that does affect the rest of life. Having credit and money is a wonderful thing, I’ve been there. Having no credit is a terrible thing considering it is the ‘name’ we are known by. I have never seen anyone refuse cash. Short sale, foreclosure, bankruptcy…great choices; would I rather get hit by a bus or a train…same result! Liquidity vs paying for a loan that will never end is truly not an option…and has nothing to do with the morality of the buyer, morevoer all those who really got paid.(lenders, contractors in Iraq, for-profit prisons just to name a few. Cut your losses, wake up and realize how this system really works and live in this world but be not of it. Love and be loved, do not set out to hurt anyone and continue to choose life. Accept the challenge and rise to every occasion with dignity. Let us focus on what is real and choose public servants who have respect for this country and the people in it, people who remember what our ancestors went through and those of us who care abour the legacy we will leave to our children They are the future, it is time for change. Let us encourage the senior citizens to retire, after all they can all afford it! SMILE…

Of course its okay to walk away from a bad loan, and you can do it whenever you want. However, that is why I remember a time when banks used to make people pay a hefty down payment for cars, houses, etc. It provided a cushion for liquidating repossessed assets quickly often at inopportune times. If lenders were stupid enough to not set standards for down payments and wall street and its investors were stupid enough to buy these collateralized debt obligations, then the only smart person in the room is the one ditching his upside down loan.

These people and the economy will be much better off without the weight of a mortgage to keep them from being good consumers for the next 30 years.

I encourage everyone who are upside down to ditch your loans, suffer 2 years of bad credit, and move on with your lives. In the end, it is the credit card companies and lenders that need borrowers to make money. Everyone needs to remember that.

Walking away from an upside down mortgage you can’t afford? I believe each case should be judged/handled separately. My divorced daughter’s ex put a second mortgage on their home just before he walked out to be with his girlfriend. He fraudulently signed her name to the mortgage. She was “awarded” the home in divorce court. Having been a Homemaker most of their married life, she was working at 3 part time jobs to try to earn enough for the home payments. The low paying jobs were all she could find that would also allow her to care for 3 very young children. Yes, she should have read the fine print when later she refinanced to get lower payments. She had “faith” in the lender who pushed the type of loan that’s for people with bad credit, even though she had never missed payments on anything, and had excellent credit. All she lacked was the ability to make sense of the legalese language of the loan papers. This loan was predatory (and now illegal in her state. So now, everything is going to go down the drain; her home and her good credit. She has actually been advised by financial counselors to “walk away”. Some reward after putting her husband through law school and being a conscientious mother! There’s no way she can keep up the payments. The lender who has bought the original loan has offered the “solution” of paying them $500. to refinance again, paying only on the interest; but the payments are still too high. This is not the same situation as someone who gambles, or speculates on their home trying to make a lot of money. She just wants an affordable roof over her famiy’s heads; and NOT a handout, but a reasonable way out.

As for Kevin in Palm Harbor, Florida who said:

“It’s ok to walk away whenevr it makes sense for you to do so. Period.”

May I translate?

I think what you are really saying is:

“Whatever benefits me is ok regardless of how it affects those around me.”

Sound selfish? God help us if you reproduce.

Since when is it okay to sign a contract stating that you will repay a loan and then walk away from it?

I have read many articles on the subprime fiasco as of late, and most of these seem to blame the lenders, the government, pretty much everyone else except the ones taking out these loans in the first place.

Now people are crying foul and hoping the government will come in and bail them out. I’ve got news for you the government doesn’t have any money that it doesn’t receive from us. So, in the end, we get to bail out those who made foolish decisions in the first place. Count me out, thank you very much.

Not reading the fine print is not an excuse to walk away from your responsibility. Who do I think the real culprits are for the mess we’re in? The people taking out loans they can’t afford. Thanks for the mess, guys.

I think its ok to walk away, under certain circumstances, i bough my house in 2000 with a 4.5% interest rate, my mortgage including taxes and insurance was approx. $400 a month, with the rising interest rate it has grown to $650 a month, which doesnt sound bad, but to top matters off i have lost my job and cant find another one, i am behind on my mortgage by 5 months and the mortgage company will no longer help me, my only other option is bankruptcy, but why should i not pay my other bills when i can afford too and i am sure the mortgage company has made plenty off of me, i am walking away.

The Great Depression was caused by allowing people to buy stocks for pennies on the dollar. When those investments soured, the investors should have been left to suffer, and the depression would have been over quickly. Instead, FDR spent 10 years with screwball schemes that only made things worse.

The same is happening now. If we bail out the people and the banks that made stupid investments, what’s the incentive for being smart? Instead, the smart people will be stuck paying the bills, which will be paid for by printing tons of money and the resultant Jimmy Carter-like inflation.

Don’t bail out anyone. Capitalism requires that stupid investments not pay off. If you change the rules, it isn’t capitalism – it’s socialism or fascism. You may as well expect the government to not allow apples to fall from trees if you expect to revoke fundamental laws of economics.

As for me, I took my money and retired to Brasil a few months ago, eager to escape the looming disaster before the next President and Congress make everyone suffer in order to prevent a small percentage from suffering.

My son lost his job and was in the middle of a divorce. The $265,000 home he bought with payments at $1900 became a nightmare. He walked away and is filing for bankruptcy. Life has no guarantees and he is an honest man but when there is no other alternative, nothing is worth the ulcers and agony of paying on a home where there is no income.

This is a problem created by the FED and this administration so they should find the solutions, to all these people that are boohooing over “irresponsible homeowners” being helped out need to know that most did read the “fine print” as well as you did, the problem is the irresponsible people who first of all kept interest rates too low for to long thus making loans very easy to obtain therefore causing values to go up excessively then over correcting by raising them to fast to long therefore people couldn’t qulaify for those loans causing values to drap dramaticallym cause values are controlled by affordability of the consumer. The govenment bailed out big time lenders when they got into trouble why didn’t these people complain about that, but if the they help out the homeowner they are righteously indignant???? You need to know they got into trouble through no fault of their own in most cases, they can’t quualify for a new loan because most don’t have any equity. I priopose FNMA refinance those mortgages at present value and pick up the tab for the differece since their policies is what caused this mess in the first place. From an unemployed bank loan officer.

Personally, I am amazed at how many of you who are saying “stick it to the banks” are misusing “lose” and “loose.” Well, then again, I’m not.

It is not right to walk away from a mortgage that you took out. I see all the forclosures in the news and wonder why all these people had to go out and buy gigantic homes they did not need. Doesn’t anyone try and live within their means anymore?
Are people really so stupid that they think the mortgage on a $300,000 house will only be $900.00, I would like to know what school they attended.
On the other hand, if the homeowners are held responsible for their greed then so should we hold the banks responsible that made out the loans. They knew also what they were doing and we should not bail them out, because it was greed that had them lend money to people they knew could not afford these houses.

It is never OK to just walk away. When you take a loan to buy a house you give your word to pay back the loan regardless of what the housing market does. If you agreeded to an adjustable rate mortgage in order to get the house you wanted, then you have to pay the higher rate when it resets. It is dishonest to not pay back the loan just because things did not work out the way you wanted. And blaming the banks or anyone else is just a way to excuse your own dishonesty and bad behavior. For anyone who has children, and walks away from their mortgage, you have just taught your children that they do not have to honor their word and that they can blame someone else when they are dishonest or behave poorly.

I wouldn’t know, I paid cash for my house. paul

As a licensed broker I witnessed unbelievable “twisting” of fugures to qualify families who had no business buying homes, but the state and the counties and the developers needed the tax dollars and to move inventory, so BS loans were approaved right and left by all the national banks scrambling for business in my area.
In a time when our government forgives foreign loans in the billions at the expense of John and Mary taxpayer – when our elected legislators pass laws that allow usurous and predatory lending practices by the same big fanancial institutions that are now whining for a TAXPAYER-funded bailout – when the lending institutions hood wink the public into the validity of a unilateral credit score system that caters to the sloth of the banking industry – I say YES – let over-taxed and over-exploited John and Mary American taxpayer just walk. Enough of the “little guy” having to maintain his / her morals when the big guys – including Washinton DC – exploit him / her to death. Shame on Washinton!

People who don’t pay credit card charges are “thieves”. People who walk away from houses because they can’t pay mortgages should be thrown into debtor’s prison. Buy what you can afford………or go without

Every situation is unique and if we have the opportunity to walk away why not do it. I paid 15,000 on interest and only 2000 on the principal. Who is making money? I just lost my job, the value of my house went down and the construction jobs and many others have dropped, my house needs some repairs, why should I stick with it after paying over 45,000 on the last 3 years? Thanks God that we have an opportunity. I hope I can walk away from my house…

What most people do not know is that most of these people that are in Foreclosure have used the Equity in their homes like an ATM Machine. They have used every cent the minute that it became available. It was not just one Loan that went bad that put them in Foreclosure. They have Refinanced and Refinanced with the 2nd Loan usually being an Equity Line. They were not all purchase money loans. When asked where the Equity went they said, “well, we had to live”. Which means, New Cars, Renovations, Vacations etc. The rest of us lived within our means and should not be paying to bail anyone out.

Please people, fight kicking and screaming any kind of bail out that requires OUR hard earned tax money. They gambled and they lost, wah wah wah.

Lenders lied to homebuyers and put them in unpayable mortgages so it is time for buyers to walk away from a mortgage they were lied about in the first place. It is time for unscruplous lenders to get their just deserts.

Oh yeah, lets pray for the poor innocent banks harmed by the criminal actions and mal intent of those desparate low income devils trying to find a place to live for their families, in areas where wealthy scum have purposely driven up home prices with lavish spending laced with greed and selfishness and hippocrisy. Thats the American way.

But lest ye forget, the number of brokers, appraisers, and lenders that have actually broken laws, frauded consumers, intimidated unsuspecting, and trusting individuals from a position of default trust, mostly first time home buyers. Thousands are being not only prosecuted but tens of thousands being investigated nationwide for lending fraud. Of course lets blame all the consumers of lesser experience and financial girth, for the crimes committed agains them by Profiteering mortgage companies and the pressure influence they routinely place to get what they want in a system they devised.

Excellent brain scans there. Blame the victims, unless its you.
How about on that same line of thinking, we blame anyone who lost money in investments due to this mortgage scandal as being an ‘irresponsible’ fraud and totally deserving of losing everything because their investment managers made bad decisions based on foolish greed? can we blame all the victims there too? How about all the people that lost their jobs at the mortgage companies, lets blame them for daring to take a job at a frauding mortgage company, they should have known better!

but really, no one with a $10/hr job was getting a $300k mortgage, or a $200k mortgage. likely not even a $100k mortgage. Most poor people were getting mortgages they could afford according to those ‘professionals’ selling it to them with ‘creatively’ designed numbers.
They might have been put on the edge of affordability, but no one in the last 6 yrs was to have known our cost of living, (gas, heating, electricity, food, insurance, interest rates) was going to skyrocket like it did and hammer the poor 10 times worse by percentage than the middle incomes or upper income households.
So critics, get a new perspective because yours is wrong and sucks.
thanks

No, I don’t think its ok to walk away. BUT…We had to! We bought our home 10 years ago, and never late on a payment. Two years ago, I was forced to stop working. Health issues, and I am only 46 years old. My husband tried holding down two jobs and ended up hurting his back. We had to file bankruptcy about 10 months after I stopped working, by that time we had nothing left in the bank and a ton of medical bills/credit card bills. Four months later, my husband got hurt on the job, and they fired him! He herniated himself and the company Dr. even told him that he will need surgery because of the hernia. Very painful. They fought him and he fought back, but we did not have a dime. We went 4 months without a pay check, plus my husband was involved in a car accident and totaled our only vehicle we had left. Thank god he wasn’t hurt too badly. We contacted our mortgage company right when he hurt himself at work, they basically said keep us posted and never heard from them since. We kept them posted, but they just wanted their money. By the time my husband started to work and receive pay checks again, it was way too late. Now my home will be sold at an auction, and I finally received my hearing date after a long two years of waiting for Social Security Disability. I will have two incomes again, but we lost the battle. So, my words are, it is ok to walk away when you have no control of what life sometimes deals you. I would love to still be working and living in my home, but I cannot work. So you see, not everybody who walks away is a dead beat or just didn’t want to make their house payments. We lost the battle and couldn’t keep up. Now my husband struggles every day because of his back pain. It is excruciating at times, but he is bound and determine that he can keep going. We sufferred a double financial hardship, and now we will suffer for the rest of our life. We tried to refinance before it was too late, but nobody would refinance our mortgage with just one income and bankruptcy on our credit report. We also found out that when we took out our loan, this company over-appraised our home by $15,000. That was in 2005.

Walking away is justified in some cases. I bought a house in good faith last year for 400K. I qualified and have the income to afford it. My loan was full documentation and I make every payment plus pay my taxes.
The value of my house has plunged to 325K and there are numerous foreclosures in my area.
I will be unable to refinance in December as I had planned.

Should I be “joe responsible” and keep paying for something that ‘might” break even?
I bought in good faith but find now that the banks and adjusters were colluding and putting people into houses that should never have been there. Is it my responsibility to pay for those bad loans just because I can?

If I was buying stock and found out the company I was investing in was corrupt and upside down should I still keep buying the stock to be considered honest and moral?

Walking away from a mortgage is never the answer. It will destroy your credit. When you purchased the house you made a commitment and signed the mortgage documents and you understood the consequences. You made a decision and you are responsible. It is unreasonable to think that the government should have to pay you for your bad decision.

Solutions:

· Revaluate your budget, cut cost wherever possible
· Speak with a financial advisor.
· Refinance your loan to a fixed rate.

Not all people are irresponsible and not all cases of foreclosure are because of the economy. my brother helped pay a land contract baloon payment in 1994 with money from my dads estate. then he decided that he didnt want the money back he wanted half my property. the property is a 150 year old 5 acre farm house my ex and i bought for 24,000 in 84.but he left my with 5 kids and no plumbing at all. He has had me in court all these years. i remarried to a wonderfull man and we decided to renovate the house. we now had a clear title to the hous. we got our first mortgage and started looking for a contracter to raise the house and add a basement. we got our mortgage and began the project. then we got another mortgage and continued the renovation. all the meanwhile my brother was pursueing me. the renovation was complete in about 2005. my brother and i were in arbitration to settle our dispute. In broke our hearts to say ok well sell and pay my brother. so we got the assessments which was our first shock because the value on our last mortgage was 278,000 and these realotors said they valued the property at 200k you tell me how could we pay him off when the value of the property and the balance was quite different. So then we decided to let them split the property but the judge wanted 2 surveys before and 2 surveys after. and that is when we said thats enough. we stopped making the payments and filed for bankruptcy. we now live very close to that farm and it is just sitting empty and lonely. We were never late on the payment and had paid off all our bills. this is what we got for our hard labor and heartache. yes you can walk away

I am in the same boat; however my financial problem started 14 months ago with a plumbing leek in my home, & to this day State Farm has not denied my claim, nor have they paid.
Everybody tells me to walk away; my interest rate keeps going up & I am behind in payments.
I think it is time for Americans to stick together & fight for what is fair.
i do not think any hard working, honest, tax paying citizen should ever be put in a situation of “walking Away”
America was not built on just “walking away”.
We need to stick together & work together.
Never Give Up….

You are welcome to contact me & use all of my information if it will help any other individuals in a similar situation.
John Mraz
jmraz@bellsouth.net
404-454-6944

If you lost your job and can’t make payments then you won’t have much of a choice but to walk away (or risk foreclosure). If you have a job and can still make payments, along with refinancing, and planning on being in your home for more than 10 years, then don’t walk away. Odds are the price of your home will be worth more than what you paid for it in 10 years time. Seems like the US economy runs on about 10 year cycles.

Hello,

I am a California teacher who had a second job as an online instructor. This allowed me to have enough to keep up my mortgage payments. Needless to say, with the economy on the downward slide, I’m not getting as many classes. In fact, I’m not getting any classes and am not making any extra income. SOOO, I’m having a difficult time making ends meet and meeting my mortgage obligations.

I am not at fault for losing my second job. I also feel that it is not the fault of about 95% of the people caught in this mortgage crisis that they can’t meet their obiligations. If there is no work, you make no money, you can’t pay your bills.

Walk away? I don’t know. I don’t want to have my credit impacted but, if I can’t work out a mortgage restructure with my bank, it may be the only option I have. Judging from the comments I’ve read hear, that may be the case for me and my family.

If the government is ok with bailing out the banks and Wall St but will do nothing substantial to help out the home owners, they are definitely within their moral rights to bail themselves out.

This is the only way out and home owners should not be castigated for helping themselves.

They should fine and jail them for not paying, in other countries they would be imprisoned!

I think that anyone who walks away who has lied on their loan application should be fully prosecuted. And do jail time. It will not happen because of the politics of the current mess. But any greedy person who lied to try to buy a nicer house or expecting to sell the house at a higher price is fully at fault. The lie on the application is a crime. If you have just run into a job loss or experienced sudden unforeseen medical bills, and were fully truthful on your loan application, sure, walk away, file bankruptcy. That is what bankruptcy is for. But if you lied, even if supposedly “everyone does it”, even if it was in a conspiracy with the real estate agent, the broker and the bank, you ought to be in jail. YOU ARE A CRIMINAL! And I resent that your criminal actions will cause my credit to be more expensive, less available and come under closer scrutiny, and you will get off with only a few dollars damage. I am not advocating debtor’s prisons, I am advocating fraud prisons.

To the writers “Perfect People” who say that walking away is unethical and morally wrong: I hope you never find yourself in a situation where you have a good paying job and and got a responsible mortgage only to be laid off and need to move to another state to find employment. Not all of the “walk aways” made poor decisions or got in over their heads. Some, like myself, had the choice of paying for a house in another state where I no longer can find employment, or paying to live in the new city where I found a job. Guess which one I chose? Am I proud of walking away? Hell No! But when if comes to a choice of pride over survival, I’m going to choose survival. I hope none of you ever find your life turned upside down by a lay-off or any other finacial disaster. You may just find yourselves with some hard decisions to make.

Exactly how can you blame people who had vulture brokers, banks, and appraisers? We were lied to every step of the way – our paperwork was unclear and difficult to follow. They set our house in a different area, with better square footage, and stated it as a townehome, not a condo-conversion. They lied to get the value up, they lied to get me into the loan, and then they lied when they advised us that everything was just fine and there would be no problems. It will be easy for you to change your loan once you are in it.
Mortgage fraud on multiple levels – first-time buyers terrified they will never own anything because of prices going too high, and add to that a frenzy in the lending industry and what do you have?
I thought our work was vetted by our realtor AND the city in which we bought (it was a city property and we were assured that there were many measure in place to make sure that everything was OK.). It is not our fault – we went with the value our bank told us we could afford. Aren’t we supposed to be able to look up to our banks for good advice?
Shame on the industry now – you have brought this upon yourselves! And shame on all the people who say we should lie in the beds we made! We were LED and encouraged and lied to in the whole process by everyone involved.
Fraud on the highest level – have some compassion and don’t judge us so harshly! We are not deadbeats looking to get out of our responsibilities.

Mortgage companies and banks made it possible for ANYONE to borrow money and then encouraged them to do it. The result is that anyone who could sign their name bought a house no matter how small the chance was that they could pay it off. Greedy banks and spoiled buyers caused this and I’m not in favor of letting any of them off the hook. I live within my means, read things before I sign them, and always get it in writing so I don’t have this problem. What is the advantage to me for doing the right thing if we allow anyone to just walk away?

It’s a sad commentary on our society when people can blame the banks for their mortgage problems. Even sadder that they believe it’s acceptable to walk away from their commitment. This has absolutely nothing to do with how much money the banks made off of you. You took the risk when you agreed to the terms of the loan. You signed a contract. If you failed to read and understand the fine print (or find someone who could do it for you), shame on you.

Yes, some lenders are unscrupulous and that’s equally sad. But anyone with half a brain knows that you don’t get something for nothing. ARMs and non-conventional loans come with lower rates because they present more risk to you, the borrower. Don’t shirk your responsibility to do everything possible to repay the loan just because it didn’t work out as you hoped. Why should those of us who are responsible bear the burden of your negligence?

Yes, it is OKAY to walk away. Why not? The predators, i.e., realtors, morgage lenders, didn’t have any regard of whether or not you could actually AFFORD the loan they granted you. All they were interested in was the bottom line, in other words, lining their pockets with your hard-earned cash. Now, let them share in the sorrow. I have walked away in the past, and I would do it again. Shame on them, but what goes around, comes around, and now it’s affecting the predators. I believe your sanity is more important than living in that 9-bedroom house you so desperately needed last year.

The people on here who say it’s not ok to walk away are naive. They don’t realize that the mortgage industry has changed over the last 10 years and no matter how hard you try to play fair with some mortgage companies, they will force you into walking away.

I’ve arranged the sale of my house for a very minimal loss, and the company that holds the mortgage refuses to take the money! What choice do I have?

Wake up people. They want me to walk away because they think the house has appreciated beyond the mortgage value. It did for awhile, but now it’s back down to the value of the mortgage. But they’ve raised my payments, the city has raised property taxes and I can’t afford that house any more. And I can’t sell it either – not because I don’t have buyers, but because the mortgage company is refusing to work with me.

I don’t know what they think and I don’t care. I finally decided to let them have the house since every action they took made me believe that’s what they want – they “lost” payments I made, wouldn’t call me back, claimed I didn’t have insurance when I provided proof of it multiple times, and generally harassed me by sending foreclosure notices every other day.

The real estate industry has some really bad companies in it. If you haven’t encountered one, consider yourself lucky, but do not look down from your high horse at people who were taken advantage of.

It’s interesting to me that so many posts seem to consider walking away from your house an ethical issue. I completely disagree with this, it is a business transaction for all parties involved, including the buyer. Consider the gentleman in the article who bought 2 properties he intedned to sell. Those are what we in the mortgage business call investment properties. He was investing, and like all investments, real estate can and does lose money sometimes. In his situation, would it be unethical for him to cut his losses and sell a stock that was losing money? Any bank that lent him 100% of the sales price for investment properties deserves to take the losses for poor lending practices. Like the borrower, they gambled on real estate investments and lost. This is all part of a free market economy, and the free market should dictate the end result. Let the buyer’s credit be ruined, let the bank suffer the losses it should, etc etc. What should not happen is a massive government bailout that ends up costing all of the responsible/smart people (like those of you who posted how you bought houses you could afford and make your payments). Why should every tax payer in this country bail out stupid banks and stupid borrowers.

The story of David is an example of how the whole mortgage mess got started. People flipping houses and banks being stupid enough to finance the whole affair. I can garner no sympathy for either party. It reminds me of the tulip bulb fiasco a few centuries ago in Holland. One day they woke up and realized all they had were some tulips.
Same thing here. Nice houses but not worth the run-up that everyone was banking. What got us here? One word – GREED!!

I understand that there are certain situations where a person would have to walk away. At the same time, when you buy a home, you should think of what could happen down the road, i.e. death, illness, job loss. If you only think of today and not what may happen in a week, month or year, then you will lose your home. Plan for the future. That seems to be the problem with a lot of people. The home they buy isn’t to live in the rest of their lives, but to make a profit. A home used to be just that, a home. Not an investment. We have lost touch with reality and figure that the more money we have, the happier we are. I may want a huge home, but right now, all I need is a small apartment until I can afford a home.

Don’t walk away until you have exhausted all of your options.

I agree with the very first poster in this string. My wife and I also clear around $100,000 together and we opted for a safe, 30yr, fixed mortgage and bought a house that was $209k. Our mortgage broker tried to tell us we could afford a $375k house and were cleared for that amount! We knew better than to think we could afford such a high-price home.

In the age where you can research anything online, there is no excuse to be ignorant when it comes to buying a home. Just go to any news site with a “money” section and I assure you that they will have a tutorial on how to buy a home. That article will include types of loans and thier advantages and drawbacks as well as a warning to borrowers that tells them to start by realistically deciding what they can afford per month and then go from there. Lenders are not soley to blame. I read the story where the lender actually added money to Mrs. Cruz’ income by telling her “Now you work for me.” She knew he was falsifying the bottom line to push her loan through and she let it happen. That is dishonest on both ends. She is not a victim, she is a co-conspiritor and should go to jail and sit next to her broker while they press and paint auto plates together.

It is never ok to walk away from any responsibility you have undertaken from a mortgage to a child. The fact that people are doing this is shows what is going wrong with the country. People must accept responsibility for their actions. Whether it is the result of poor decision making, economic bad luck, or receiving bad information it is incumbant on the person to work through the difficulties and make the best of the situation. I am tired of the masses paying for peoples bad judgements.

A house is like a T-bill. It goes up, it does down in value, but if you are not a seller why do you care? In many places the same defaulters will reap the rewards of the upside shortly. I think there should be two groups. Speculators and real deal homeowners that have trouble. It is in the best interest of the bank (pun intended) to work with homeowners who really have trouble. Speculators have the United States Bankruptcy code to help them and an orderly process to deal with it all.

But to a middle class person who should have understood the paperwork (there are plenty of lawyers that could have helped them read it if they did not), they should hang in and get things fixed. Don’t go to a service. See an attorney.

In some ways, buyers were speculators too not reading the papers (or now claiming not to have) showing the ignorance of some who externalize it all and blame the bank or mortgage lender. That always makes me mad. If you can walk, you can read the papers or ask questions. Part of being an adult.

Sure if you have been the victim of a scam, contact the police or your attorney (i am not an attorney), and it will get fixed. But that aside, I am confident most of you can make it. Your personal choices of consumption are your personal choices. They can be changed. The greatest capitalistic country and the world and we suddenly know nothing about business? Work harder like our grandparents did and get the job done. It will all get better soon enough.

The concept behind “secured” debt is that the debt is tied to an asset of a similar value – the theory being that if you do not pay this “secured” debt the lender can take the asset to repay the loan.

Theoretically this is smart. The reality is that lenders seem to have moved away from the true concept of secured loans and have no invented some strange sort of semi secured loan – where the asset can not cover the full value of a loan.

Under the true theory of secured lending there is nothing wrong, or unethical, or immoral about walking away – under a traditional secured loan -as they were originally intended – handing over the asset to pay the loan is a perfectly reasonable option. That is the whole point of why the loan is secured in the first place – so that the collateral can be put to paying the loan.

The problem now is that lenders have decided to extend loans that they call “secured” but are in excess of the value of the collateral. And it was the lenders choice to decide to start handing out “secured” loans that were in fact not really secured as the collateral could not cover the loan.

Frankly I think it is on them. They made these silly choices, let them live with those choices. I see nothing wrong with expecting a lender to accept collateral as payment in full for a loan, after all they were the ones who deemed the collateral sufficient to “secure” the loan.

Ohh so you say the home is not worth what the loan was for? Well then that is do to one of two reasons likely. 1 – The lender over extended the loan to a silly amount such that first grade math is sufficient to see that the collateral is insufficient, or 2 – the market has dropped terrible. The first is the lenders choice, and their gamble and their mistake. The Second is still a reflection of risk and investment. Lenders charge interests to cover their risk, and high rates for high risk – they get this concept. Same with real estate – it is a risk – a good business should be able to access the risk and set rates and give loans in a manner that they make a profit. If they handed out a loan at too low of an interest rate, and with too little down payment and the market plunges, than they lost on that risk, the same as if a stock went down.

The lesson to be learned here is that lenders desperately need to go back to requiring down payments – what a novel idea! Somehow I doubt anyone would care about people walking away from a home where the bank can sell it for more than the balance of the loan. A secured loan should have the option of walking away, and frankly lenders should not grant loans unless they are happy with that option. If more lenders were forced to eat their losses, they would start being smarter about their lending practices.

NEVER !! a contract was signed, whether or not the buyer is able to read and understand it. It is a PROMISE to pay back. period. these folks that just walk away probably should never have been homeowners in the first place. IGNORANCE IS NO EXCUSE.

By all means walk away and don’t look back. This debacle was caused by the lenders and the lenders alone. People did what people will do. Lenders departed from ethical practices, which lenders never should, as they are never loaning their own money.

As individuals have different capabilities for determining a viable deal on a house for themselves and, individuals are subject to changes in income, mindset, health and circumstances. It is up to the lender to make a sound loan that takes this into consideration.

That means, always loan an amount less than the value of the house. Check the buyer out very carefully and make sure the buyer has a contingency plan in case they lose their job, and make sure they have a few house payments in the bank, make sure the loan is insured in case the borrower dies. Get a big downpayment to make sure the buyer is in earnest.

Only loan the money when this criteria is met. As people’s ability and willingness to pay varies, bank and lender practices never should.

Saying that banks failed because people failed is stupid. Sermoning people on being accountable is an exercise in futility.

Some people are so judgmental and ready to condemn people who find themselves in financial problems. The majority of Americans are decent hardworking people who are just trying to take care of themselves and their families.

This housing crisis is not just about investors who took on too much or people who stated their incomes too high. It effects people who thought that they were doing the right thing, but got caught up in other people’s greed. Lenders and servicers are not being helpful, so should you conitnue to stuggle and pay a mortgage that jeopardized the stabiblty of your family r do you walk away and start again. The system is set up for redemption, so walk away and let the healing begin.

It seems there are two major problems: Predatory lenders who are not completely honest or intentionally deceptive, and Consumers overstretching to buy more house than they can afford. I realize that some people have difficulty affording a house at all and homeownership seems like a much nicer thing than renting. The lenders pander to these people to try to make it possible for them to get a home to maximize their returns. The homeowners try to make it work “somehow” and since they can get approved for much more than they can actually afford they take it.
Now things go bad and both suffer. The banks lose money when a homeowner defaults on their loan. Banks typically can afford to eat the losses more easily than a homeowner can, but when thousands upon thousands default, the banks are left with property that they would really like to liquefy, but can’t. The property is also decreasing in value, which is expected because the real estate market has been super inflated the last few years.
Now everyone is looking for an out. Banks are losing money. Homeowners are losing homes. Who can help? Can the government help? The Fed cuts interest rates. The Fed pumps money into the banks to keep them moving. When interest rates drop, it helps those in debt, but causes savings and CD interest rate to drop as well, which discourages saving money. Pumping money into the banks means that the money has to come from somewhere. Where does it come from and who is the Fed going to have to pay back?
Sure if the Fed stays out of it, the market with eventually adjust and right itself. Thousands of homeowners lose their homes, and tens or hundreds of lenders go bankrupt. The housing market “slows down”, but in reality the housing market settles to the actual market value. Not the super-inflated value of three or four years ago.
Perhaps the measures the Fed is currently taking work. Let’s say the cut interest rates allow homeowners to refinance and keep their homes. Homeowners are happy and banks are happy, but again, who does the Fed now have to pay back, and where is that money going to come from?
So what is the solution? Homeowners just walk away and let the banks eat the cost. This is apparently legal, but may violate many’s sense of ethics. Of course, the ideal solution is also a two part solution. Banks and other lenders shouldn’t approve people for more than they can reasonably afford, and people should be much more cautious in assuming debt. Nice lesson for the future, but that won’t help us out of the current situation.
For a homeowner, perhaps a better bet than allowing their home loan to default is to refinance. They will get bitten by the closing costs, this is true, but with lower interest rates they can either reduce the monthly payments, or pay more towards principal to increase their equity. Also, some homeowners may be able to increase their loan duration. Change a 15 year fixed mortgage to a 30 year fixed. Change a 5/1 ARM to a 30 year fixed or even go with an interest only loan to reduce your monthly payments to something you can afford till a better arrangement can be worked out.
Ultimately we cannot rely on banks or the Fed to bail us out. Avoid walking away if possible, but you’ve got to do what you’ve got to do. Just remember walking away from your load can have lasting consequences and it is always best to try refinancing first before losing your home and hurting your credit for years to come.

My wife and I are facing the same unfortunate dilemma. We both lost our jobs last year and spent several months falling behind. We tried to be responsible and called our lender…Litton Servicing Group. Their response was to put us on a repayment plan- which (surprising to us) added $300 per month, instead of lowering our payment. Then when we couldn’t make contact with our rep, we went to a mortgage broker to see about refinancing into a 30 year fixed. To our surprise, Litton had not only increased our payment, but also submitted “payment plan=late” to our credit bureaus on our loan, which has essentially crushed our credit scores. Our home is now worth less than our last appraisal and loan. Our interest rate is adjusting for the second time in June- an increase of another $1,000, or $4,000 mortgage payment. And contact with Litton- is only getting us the run-around with the promise that they can perform a loan modification for us. That has been in talks for the past six months. The last thing we want to do is walk and loose our dream home. But eventually, homeowners will be forced to make a tough decision… either “HELP” work with us, or come pick up the keys. And we’ll gladly let the Loan Holder take a loss (on average) of $80,000- common on most foreclosure properties.

First time homeowners do not, under any circumstance, know all of the ins and outs of buying a home. They believe whatever is being told to them. If you can’t afford it WALK AWAY because it is not illegal to walk away if the money you make is not enough to afford the home you bought. Also lenders never fully explain fix versus adjustable rates they talk to potential buyers as if they understand what is being told to them. The housing market was doing amazing. Lenders were giving credit without verying income and explaining detail fully. Its their own fault now not the buyer’s!!!!!!!!!!!!

I have sympathy for the idiots who didn’t read their contracts, for the idiots who don’t understand what “adjustable rate” means, and for the idiots who signed a credit application that had false information added to it by a lender – and signed it anyway. I have no sympathy for speculators. Letting speculators walk away will devastate our economy, just like bailing out banks will.

The people who bought 2, 3 and 4 houses and now can’t afford them are just plain nuts. A law should be passed such that folks may not “walk away” from loans on houses that they do not live in. There are too many families that need help keeping the one houses that they live in, so I say, stick it to the speculators and give help to the folks who are in danger of losing the home that their family lives in.

My suggestion to the banks . . . for one-home owners, foreclose, but let the “ex-owner” of the house stay and rent from the bank at the monthly payment of the original loan. Wait for market conditions to improve. Sure it won’t be profitable, but Mr. Banker, that’s your fault. Make your investors eat some of the speculation your bank was guilty of doing by writing these shady deals in the first place. Teach bankers to be responsible adults.

For folks with a second, third, or fourth home, rewrite the tax code such that these crazies can’t take any write-off for losses. Let the banks go after any equity and assets that a speculator might have. Teach Americans to be responsible adults.

Walking away isn’t always the best decision, but I’m sure there are folks out there who have no choice. I’ve owned 3 homes and fortunately I haven’t been put in a bad situation like some of these poor folks are in, but I’ll tell you this – if it were me, and the banks refuse to help me settle the situation in a way that is affordable for me to keep the home, I would walk for sure. You do what you need to do. If you read some of these stories, especially the ones where the mortgage lenders took advantage of the home buyer, what is the homeowner suppose to do?? The mortgage industry is just as crooked at the rest of corporate America.

I think its wrong to call some of us idiots- when its absolutly neccessary to walk away! I have a 30yr fixed mortage and I will soon be walking away! I live in southern Florida where the construction industry has tanked, I was a constuction manager and lost my job over half a year ago. I cannot get another job in this area that pays good enough to make up our old household income! My wife is a teacher and she only pulls in a fraction of what I was making….so for all the critics out there- this is a perfect portrait of why ALOT of people are forclosing!!!! If the housing market took a crap and now thousands of well payed workers in the construction industry cannot find a job- well then your going to have thousands for forclosures!!!!

It’s not about “walking away” or not. The problem is that the banks are unwilling to work with people who are trying to reach out.
I have contacted my bank several times explaining that I can’t afford to keep losing money on an investment rental that I had intended to sell by this point.
The income is negative, which served tax purposes and would have been offset by equity, and the property has gone from $283,000 to $200,000.

It will take 10 years for that property value to return, and to keep it rented I will have to put more money in to the investment for up keep.
I have offered to sit down and work something out with the lender, but they are unwilling to negotiate.
They leave me no choice.
Even if there are tax consequences, they will be cheaper then than losing $12,000 a year in negative income and another $5,000 to $10,000 in upcoming repairs.
You don’t hold a stock that is going down and you don’t keep putting money into a business that is closing or going under.
This is nothing more than a financial decision, and the banks are leaving few choices.
I offered to work it out, but they don’t want to realize that we are all in this together and that we need to work with each other rather than against.
“Fine then, enjoy your new house!”

It’s youre personal situation that matters. Here in CT, You’ve got to have a lot of money to begin with. But everything(necessities) costs two or three times what it did just a few years ago.
If you’re lucky enough to afford a house here, then you might have a variable interest rate. Our pay didn’t go up by nearly the same margin as inflation. Top that with a mortgage that’s 30% higher and you’ve got a financial meltdown.

From a banking perspective. All the bank’s really done is buy a property while shifting the financial responsibility to you. If you can’t afford the place, then the bank keeps the property while you lose the equity.

I would say that’s the situation where you can walk away. Never take food off the table to keep a fancy home. It’s not going to hurt the bank in the long run. Property values will go back up eventually, so buy and hold on if you can.
If you do have to walk away, consider the consequences. Don’t let the “Honor your commitment” argument starve your children. The people saying that are the ones who have ALWAYS had money and have never had to juggle bills.
You just have to be willing to accept that your credit score may as well be written in crayon from that point on.

I am a law abiding and tax paying citizen. Unfortunately…I bought a condo on a Realtor’s income in a good market and now I am a Realtor in a bad market. I do not have a college education and can not match the salary I had when I took out my mortgage. I have excellent credit and haven’t bounced a check or paid a bell late in 8 years. Unfortunately, I am in a position where I have had my home for sale for 8 months, no offers and very little interest. I begged and borrowed to stay afloat. I am sick of putting more debt on credit card to pay the mortgage.I thought I knew the market and did not think I was taking a risk at the time of purchase. Boy…was I wrong! I wrote my lenders(Countrywide and Citimortgage before I got into trouble and gave them all of my financial and condo listing information. They did absolutely nothing to help me. At first they said you are not behind. Call us later.They offered no deferrments or payment adjustments. They told me that that would set me up for failure!After many phonecalls… The person handling my file at Citimortgage called me 3 months after submitting paperwork to tell me she no longer worked in that department. Anyone who says write your lender before you are in trouble… has no clue what they are talking about. The lenders are overwhelmed, controlled by the investors and do not have experince or time to deal with individuals. I find myself in a position of having to give the house back! Mainly due to a lack of help from the lenders, and income loss too. I am finding bankruptcy the only option. I am going from excellent credit to no credit in a matter of 3 months and I am devistated. This was not an easy decision…It has become the only option!

Frustrated Borrower,
Shelly in California

Bought a $330,000 townhome 3 years ago. The wife and I have consistently made 6 figure income with no debt except some minor student loans. The townhome was built improperly with major issues. Tried to sue but we had to mediate which did not work. Arbitration has been ongoing for 2 years. The city of Tampa will do nothing because it will implicate their inspectors not actually inspecting the property. This is not a stand alone case. So my wife and I now have a house with issues and now on top of that, its gone down in value 100K. We pay all of our bills on time and have never been late. No collections ever and both with 700+ scores. We would like to move back to the Northeast. We have been planning this move for 2 years. This house is the only thing holding us back. Should I take a huge loss on a piece of crap property that has been nothing but a 4 year headache? Don’t think so. This was a conventional mortgage with money down. I’m walking away. Screw it. I’m over this. No where have I seen anything mentioned about the gobs of houses built improperly by idiot builders that came out of the woodwork in groves over the last 5 years. Its not just a subprime issue.

I’m not walking away. Here’s my story.

Our house went on the MLS last Thursday of the previous week and by Tuesday this week we had an OFFER!!!

My house is a short sale. The buyer offered $330,000 less than what we owe on our house. They offered about $50,000 less than what we listed our house for. We counter offerred $30,000 more than their first offer. They accepted. So our total loss will be $300,000.

Unbelievable! We are going to sell our house for the exact amount we paid for it five (5) years ago – so no total appreciation at all over five years! Of course the house appreciated up (inflated up) and then depreciated down – deflated down $300,000 over the last 18 months. Even if we had never refinanced our house nor taken out second mortgages or refinanced those first and second mortgages we still would not have gained anything.

You can argue that all the second mortgages we took out are gains in income. So I tried to account for the total $300,000 in losses (refi’s) here:

$300,000
- 45,000 – 3 refi’s of fees to lenders, brokers, escrows, etc. expenses = $15,000 each time
———-
$255,000
- 56,000 – prepayment penalties multiplied 3 times
———-
$199,000
- 36,000 – negative amortization loss over 3 years starting in 2003
———-
$163,000
- 30,000 – About $30,000 of bad luck, bad decisions, broken down cars, medical bills, etc.
———-
$133,000
- 36,000 – 2005 through 2007 of wasted money in Payday loan fees = legal extortion
———-
$ 97,000
- 97,000 – subsidized my income over four years = about $24,250 a year or $2,020/month
=======
0000000

And that’s the best I can come up with looking back the last five years on what happened to $300,000 from refi loans because I sure don’t have anything to show for it.

I support a family of four. I have two college age kids that commute to the local community college – no big name college for them. My wife went back to work a year and a half ago – after 20 years of being a stay at home mom – because of our financial needs. She brings home $1400 a month. We have no new cars, no boats, no vacations at all in the past 3 years. I have taken on part time jobs so that I worked 70 hours per week. My family suffered so I dropped the part time jobs and now I only work 50+ hours a week in my regular job. I’ve been laid off a total of 9 months since 9/11. I burned through all my life savings ($90,000) since 9/11 trying to stay a float. I’ve cut expenses – no lawn service, no gym memberships, no fancy blackberries, no HD TV let alone plasma or LCD, no electonic toys. We drive automobiles that are 4 years, 8 years and 17 years old respectively. We rotate 3 cars among 4 adults. You tell me how I profited from this???

The banks and greenspan set up a situation where the average person had no idea that housing prices would collapse. Why would anyone feel an obliagtion to pay a loan off in those regrads? WOuld you feel obligated to pay off your poker bets if you found out the cards were marked? If you have to walk away!!! Its not worth killing yourself over a rigged game.

A lot of people here seem to think that the people walking away are deadbeats or liars. For many, like myself, their life has changed without warning and without an option. I bought my home 8 years ago. At the time my wife and I were making $120k combined. We bought a $170k home. WELL within our means. We started a family, and my wife changed careers (part time) to spend more time raising our children. We were still earning $80-90k. I was laid off. Never again found a job in that industry. I changed careers, and my wife went back to work full time. Today we earn a mere $55k combined, and our home is valused at $148k. With 3 kids and a 3yr ARM ready to adjust in the next 6 months, we may have to walk away. There is nothing more we can do.

Everyone’s situation is unique. I had purchased my townhouse in sw florida. This was my first home. I have a fixed rate 3 yr rate. The home was appraised for 338k which I have a 295K on the first and 40K on the Heloc. Fair market value on the home today is 100k less. I was diagnosed with a health crisis and no longer work. So you see…..I can’t sell my home w/o walking into the closing with money I don’t have. I put it on the market for 299k. I don’t want to walk away I want to RUN!.. Shame on me for wanting a piece of the American Dream. I’d might just take my losses and run!

I just can’t believe this. Bernanke is proposing that banks accept whatever price homeowners can afford to pay. Hey, 20% off; I’ll throw my hat in the ring!! I sincerely hope that every one who takes advantage of an offer like that is unable to resell their home for a profit later. I honestly believe that those homes should be re-appraised for whatever the reduced value would become–and
ONLY those homes. After all, you get out of it what you put into it.

People dumping homes never deserved home ownership to begin with. They afforded home loans on flakey zero down payment and stated income financing programs created by irresponsible lenders. They are still the same people that couldnt pay bills on time to begin with. We have no right to be shocked these people that never deserved a loan to begin with would do what they have always done, not pay bills and walk away.
Lets take our financial lumps and move on…

I don’t really ant to walk away, but I am in a situation that I have no choice. After learning about the predatory lending, I realized I was a victim as well. I never was told anything about the how much the rate would adjust in two years and if we qualified for the higher amount. I wanted a home soooo bad, that my loan officer asked me to ask a friend to get on the loan with myself and husband to qualify. I have ruined her credit, my credit, and my husband don’t care because he lefted my children and myself due to a gambling addiction. I am lefted with this very high mortgage, high debt, and monthly household expenses for my daughters and myself.I feel bad to walk away from my responsibilities….I don’t know what to do at this point. I rather start my life over and get back on track financially, but I don’t want to be a renter again.

Obviously anyone who walks away (a rather simplistic term, in my opinion) doesn’t purchase a home with the intention of failing as a homeowner. A year ago I moved to another state with my fiancee and put my house on the market. A year later, and on a teacher’s income, I cannot afford to pay an extra $1900 for an empty house each month. I’ve already cashed out all my retirement and stocks to make this payment in the hopes that the home would sell in the traditional fashion. The idea of foreclosing pains me like a bowling ball hit to my stomach every time I think about it. That was my first home- I tiled the kitchen floors myself, had the kitchen and bathrooms renovated, planted and tended a beautiful vegetable garden, and have many memories there. I am in the process of ‘walking’ because after faxing my lenders everything required for the approval of a short sale, they won’t return my calls and when they do call, it’s simply an automated message. My realtor says this is because of the sheer volume of paperwork with which they have been recently overwhelmed. What- they don’t have the manpower or time to get back to me now? Furthermore, all the other foreclosures in my neighborhood have driven the price of the home down impossibly low for me to sell. I live modestly- cut coupons, shop at wal-mart, and drive a 97 civic. TO ANYONE OUT THERE WHO THINKS PEOPLE WHO ‘WALK’ ARE IRRESPONSIBLE- PLEASE OFFER US ANOTHER OPTION!

Wow people think a foreclosure will only affect their credit score? If you foreclose on a mortgage you may never get a mortgage loan again. Have fun renting the rest of your lives!
I make $80k/yr and I live in a $200k condo b/c I wasnt foolish enough to let someone tell me I can afford a $500k house payment.

These jerks and smart people that say “try to work it out with your lender”. Well, my story is that for the past three months I have tried to communicate and work something out with Countrywide. Get this, I have two mortgages (2 seperate properties) with Countrywide. They assign a “negotiator” (kind of funny – the name). Well, I have no way to contact the negotiator, as they won’t give me a direct number, so every time I want to contact them, I have towaste twenty minutes talking to a new person, that asks the same fifty questions each and every time I call, and I never even get to talk to the negotiator as that person emails the negotiator a message. In the past three months I have contacted Countrywide at least 50 times via mostly phone calls – get this, the Countrywide negotiator has only contacted me and called me 1 time to notify me that my request for a Deed in Lieu was denied! That is really working with the customer to work things out! You people are really funny if you think they want to work with the customer or will make an effort – they obviously do not want anything but your money – and all of it! My opinion is – walk away before you have no money left to feed and clothe your kids!

This is not only about mortgages, but in Florida, the rising cost of Insurance (went up 3 times what it was 3 years ago) and and thanks to Charlie Crist, Taxes have been increased 10 times what they were three years ago! I see this as a Bush plan to attack and rob the middle and lower class people of this country! Bye bye middle class!

Objectively – get over it people. Many of these respondents did not take the 4.8 ARM with a 30 year I/O. They simply do not want to be victimized by the resultant of greed should they need to sell their home for any reason – RELO or otherwise.

If it’s all you had right now in cash reserves, would you, with a track record of buying and selling 4 homes in 30 years with excellent credit and multiple fixed assets, consider using retirement accounts to fund the sudden lost value of your home at the closing table to facilitate the privilege of selling at a huge loss that is linear to the banks gain??? Not to mention the tax penalty next year just so once again you could (post loan agreement) further accommodate a fattening of the hog??? If you’re not considering your family – you’re loose!

True, there was some poor decision making from buyers and, life is about decisions but as an observer, I see the bleeding hearts saying “you signed a contract” without making that vital distinction. Where did the contract say that the everyday, responsible consumer should be “providing funding in abundance to support reckless, almost fraudulent lending activities”. That single practice was in stark contrast to any reputable firm’s credentials – and clearly, they’re decision was calculated, bloodthirsty and premeditated as witnessed by any entry level MBA. Can you say “Jingle Mails – Jingle Mails???”

It is totally OK to walk away ANY TIME! Anyone that says otherwise is a FOOL! So, what you are saying is that me and everyone else in this situation should drain every last cent out of savings and retirement money to save a home that may never be worth a dime. All I have to say is “Do you want to buy my home at 60% of what I bought it for two years ago?” – I don’t think they would do even that!

I don’t blame the homeowners, I blame the banks. If a person can’t afford housing, they should not received loans from the banks. The banks don’t care because 95% of the first five years of payments go on interest. They get their money up front. You actually agree to pay three times what your house is worth after the interest is added up. I say walk away, it’s a no win situation. As homeowners, we will all be affected by people walking away from their homes because it will drive property value down. Not to mention, NOW that it’s harder to qualify for a loan, most people can’t afford to purchase a home. My biggest concern is will I ever be able to sell my home. It’s a no win situation. We have to realize that in the real estate business no one gets paid (it all commission) unless someone buys or sells a home so when the realtor, loan officer etc. get hungry, they’ll do whatever they have to do to get someone in these homes. This is why the subprime mess is just that, a MESS.

Although I understand the desire to walk away and propensity to blame the mortgage companies, the fact is these homeowners made bad financial decisions and need to live up to their obligation. Its not just the one that walks away that pays more. The rest of us do as well. My husband and I have excellent credit (scores in the 800s) and a combined income of over $240,000/year, yet we are having a hard time getting good rates on a home loan because it is considered jumbo – although almost everything in this area is jumbo.
In the end, everyone pays more because irresponsible people want to walk away from their obligations.

Each situation requires analysis to determine if it is “ok” to walk away from debt. But in the main, when you get a loan you agree to pay it back – duh. If you were to borrow a lesser amount from a friend and then at a future date tell your friend, that you can’t or won’t pay them back because it cost too much and you have other things you would rather spend your money on….who is bad guy? Just because lenders have corporate balance sheets does not mean the ethics change.

When is it OK to walk away, how about NEVER. It is never ‘OK’ to walk away from one’s debts, however sometimes it may be necessary. If someone has a dramatic decrease in income (loss of job, health reasons, death in the family, etc.) then it might become necessary to simply walk away in order to keep ones head above water. Life altering events aside, people always have the responsibility to pay their debts if they have the means to do so.

However all of these people who whine that their payment magically ‘went up’ and they can no longer afford it or that they were planning on their house appreciating and were going to re-fi before the new rate kicked in yadda, yadda, yadda are simply ignorant consumers. They went into the home buying process with their eyes glued shut. Don’t get me wrong, there are pleny of culprits in the mix here (banks with loose underwriting standards, mortgage officers encouraging people into loans that they probably knew people couldn’t afford, etc.) but when the day is done and the BUYER is signing his or her signature on the dotted line, the buck stops right there…end of story. If the consumer doesn’t read or at least have a general understanding of what they are signing, then they probably should not be signing…period.

There was a time not too many generations back that people were put in the stocks or in prison for being deadbeats and not paying their debts. They would be put on display in the town square where their neighbors could walk by and taunt/spit on them for being slackers. We are now a more ‘civilized’ society and people have the legal ability to bail on their debts and remain free; however people who have the means to pay and don’t simply because they have ‘lost equity’ or want something cheaper or and want something nicer or more financially advantageous should face stiffer consequences. The rest of us end up paying for their actions and that is simply wrong.

For the record, no matter how poor I have been over the years (and there have been severely lean times) I never skipped out on a credit card payment, car payment, house payment, student loan payment, nothing. I’ve never lived beyond my means and I never plan to. It’s called personal responsibility folks and if more people lived within their means rather than trying to keep up with the Jones’ we probably wouldn’t be in this economic mess in the first place.

I have a suggestion for anyone who thinks they should be buying a house with no money down and less than $5,000 cash in the bank. Rent. Don’t buy a house if you really can’t afford it. It is not a right granted to you by the constitution. There is absolutely nothing wrong with renting and in many ways it is much less of a hassle. No taxes. No maintenance. Cheap insurance. Come and go and live your life. Be happy and living within your means.

America will recover from this dark period and hopefully a lot of folks will learn something from it. Then again, maybe not because as Americans we are forever optimistic. But as bad as things get, and I think they’re going to get worse before they get better, there is no place I’d rather live than in this great country. God Bless America!

What housing crisis? Buy a house you can afford and live within your means. A fancy house with the Cadillac Escalade and 2 jet skis parked in the driveway allows no excuse. You just can’t protect people from themselves!

Not everyone who walks away is a deadbeat, or attempted to live beyond his or her means. I bought a house for 340,000 with a fixed 30 year mortgage of 5.25% in July 2001, right before the bottom fell out of the economy. I make 200,000, so that was not a problem, at the time. I lost my job in Michigan because the company I worked for went out of business, as is the case with a lot of Michigan businesses. I found a job in Arizona, and I am happy with it. I had my home on the market for 18 months and dropped the sale price to 20,000 dollars less than what I still owe on it and planned to use savings to make up the balance AND the realtor commission. Not a single offer. I took the house off the market 6 months ago and rented it out NOT for the entire house payment, though. And now that it is not my primary residence, I am told that I will now get an increase in homeowner taxes of about 5000 per year because I can no longer take the homestead exemption. You gotta be kidding me when you say I shouldn’t walk away. I will give this market one more year, losing over 1,000 per month on this house. Then, if the market doesn’t turn around, I am walking away.

Our society has been educated to think of taday only, get what you can, how you can and whenever you can and your a sucessful person. When the banks started to lend money to people who were in over their heads in monthly payments by consolidating loans, the bottom came up fast and hit a lot of stupid people right in the face.
WALKING AWAY is the American way of life now as illustrated by the millions of people who filed for bankruptcy just before the deadline. Many of these people had 30,40 thousand dollars on credit cards alone. Ah!!! Only in America. It’so wonder the country is in the shape it’s in. WAKE UP AMERICA!!!

I think people have to remember that a mortgage is a secured debt. Meaning it is the promise to pay OR the underlying security is relinquished to the bank. Is walking away ok? Did you make a promise to pay? yes. But you also said that if you can’t the bank gets your house. Bank should have managed their risk. It would be unethical to continue to live in it after relinquishing the keys. But to walk away? I think everyone needs to review the definition of secured vs unsecured debt. The bank managed their risk by controlling the home. They are the ones that should have double checked their apraisals. They loose the drop in equity the owner should take a hit to their credit and loose all the interest and money they put in. Everyone take a hit where they all agreed to take a hit. So is walking away wrong? No. the banks estimate a % of owners that will walk away. I think they just got too greedy on this last run. Everything else is just ranting and raving this way and that.

I lend my own money, and I have no objection to the ethics of borrowers who walk away, if/when I am stupid enough to lend them too much. Needless to say, I have never made any 100% loans, and I am not now making 90% or 80% loans. I have had some small losses, always connected with my having permitted the LTV ratio to be too high.

Yes, i agree on the comment. Homeowners signed the document, that they will complain about their loan. Why should government backed them for their luxury choice and not able to pay the loan. So, if somebody is irresponsible government should not encourge that. Government should value for the valued people who are responsible and making choice within their limit. Government should not come and rescue for everything for the bad choice people making. It is like breaking the system, then people will stop believing the system which they follow as responsible manner.

Foreclosure is “NOT ILLEGAL”! Do it all day long if worst comes to worst. Banks will never lose! They make money even through foreclosure and or defaults. Bottom line is their shareholders suffer maybe a few cents off the stock price, boo-whoo, cry to your mother. They will magically create another “sub-prime” option for middle -> low class income homeownership seekers in the near future which will create “another spike / bubble” in the housing market! ‘Nough said……

I am surprised at the number of people who are ignorant in this country. When I bought my house in 1994,I did research because it was my first house. I also researched what the utility bills would cost and the property taxes and how much crime was in the area in the last 10 years. I also took into consideration what I could afford which was not much in those days. I had a 3 thousand dollar debt which I had to clear up before the bankers allowed me to sign my John Hancock. I went through like a razor blade the terms and aggreements, the APR and interest rate which by the way I have found a lot of people in this country don’t know what that is. people here get caught up in to the so called dream but are not ready to pay for it. Guess what people “Dreams Cost”. Decrease your consumerism. You don’t need the cell phones, the Gucci dress or the Coach Handbags, nor do you need designer coffee of Tommy Hilfiger shirts. Get yourself educated of what an adjustable rate Mortgage is and do your own yard work. Walk to the grocery store, then you want complain about being overweight and having heart problems

I think it is disgusting that these folks (the one mentioned in the article who bought two properties for almost $1M with no money down, interest only, and expected to sell them for a profit), now are just saying that they are walking. Pathetic! What a loser who is costing all of us money! I guess it was fine for him, the big “investor” who obviously was anything less than that, to just walk. While the lenders gave out loans, what ever happended to folks owning up to their commitments and resposibilities? And NO the government does need to bail these people out – they got us ALL into this mess. I actually feel that we really need to start getting tougher – a) criminal charges for anyone who abandons a house and b) anyone found still collecting rent monies and yet not paying their mortgage payments (again another scam) should also have to repay and/or face criminal charges. Once this is enacted and enforced by the government can we truly address the needs of the people who need assistance. And the rest of these “investor” folks who messed up the market need to start paying up and apologizing for their ignorance.

How would you answer this question? My house was purchased in Dec. 2006 for $720,000.00. One year later, Dec. 2007 the identical home next to my house sold for $420,000.00. In my book that is a $300,000.00 loss in 12 months. The builder sold it for under cost just to get rid of it. In the mean time, lowering the value of all the other homes in the development. I still do not understand how they (the builder) got away with this. So what about me? How long do you think it will take to recoup $300,000.00? Not only that; I have used every last penney to save my house from foreclosure. I qualified for my loan when I signed for the mortgage, however, since then my income has dropped considerably.
I may be FORCED to walk away. Stop throwing stones and get real! This makes me absolutely sick to think someone paid $300,000.00 less on the same house. It is so unfair. If I knew the builder would drop their prices so draastically, don’t you think I would have waited one year to purchase the same house? My heart goes out to everyone in this disgusting mess. When you spend all the money you have saved over your lifetime to try and save your home, AND you know you are throwing good money after bad, WHAT WOULD YOU DO????? Oh, by the way, I have excellent credit and have always paid my bills on time.

To those of you who say NEVER, I say I hope you NEVER have to go through what some people are going through right now in these foreclosures.

For one thing, foreclosure and bankruptcy law exists for a reason. It is because sometime’s life circumstances are beyond your control (yes, it’s true!) no matter how smart you are and how much you save, things can happen that wipe you out financially. I don’t wish it on you high and mighty, holier than thou people, but it does happen. Foreclosure and bankruptcy are NOT criminal. That does not mean we would want to do this, but sometimes it happens. It doesn’t even mean we are not ashamed. There are many people who are too ashamed to come out and discuss this.
Now my story. I am a MUST MOVE. A MUST MOVE is someone who has to put their house up for sale in this, the worst market in 25 years. A MUST MOVE is someone who has to move due to a medical reason (I happened to have Stage IIIC uterine cancer), a job change, family reasons, retirement, divorce, etc.
So, you put your house on the market and it doesn’t sell. You rent in your new location, because you can’t buy.
In my case, instead of filing BK right away to protect my assests, we decided to gamble on a short sale of the house. We tried to do the right thing. We spent our entire retirement account paying down some credit card debt and keeping the house payment, taxes and maintenance current.
The lender scared our short sale buyer away with a counter offer. We now have no offers. The only sales in our neighborhood have been foreclosure sales. The only possible buyers are waiting for the foreclosure sales. Why should they offer more now, when they know the price will go down further? There is too much inventory, there is no move up market, people cannot get loans–there is no market.
I also have a second mortgage on my house. Whether I short sale or foreclose, the lender can come after me for a deficiency judgment. The second mortgage on the house in CA is the same amount as the rental home I am in now COSTS in PA.
Now, because I did not default on my loan sooner, I have nothing left and will have to be renting for a very long time.
The lender who gave me the second mortgage in January 2007 appraised my house at 1.1 million. The BPO they conducted in Feb. 2008 was $750,000. Eighty-three percent of the loan is documented to have been put into the house in improvements. The rest of the money did go to pay off a car and credit cards, AS A REQUIREMENT OF THE LOAN CONTRACT.
Does the lender not have to share in the risk they took? They were the experts and appraised the house a year ago. Should they not have expected the market to fall?
The first will be paid off either by a short sale or and auction, but the second mortgage is the issue.
Even though I have cancer and my husband was forced to change jobs, the lender has approved a short sale only; they will not give us forbearance or deferment of the monthly payments until the house sells, so we most likely will foreclose before we get another offer.
Any person who MUST MOVE in a market like this is in bad shape because in certain areas you just can’t sell a house right now. You can’t pay two mortgages forever.
Rather than bash and blame, people need to think this economy through and come up with solutions. What kind of regulating can we do to stop the housing market from making major increases and declines? We need to regulate commissions and fees on the sales of homes and mortgages at every step along the chain, so their constant churning does not cause artificial inflation. The bubble had to burst in certain areas, because there finally comes a price that the market will no longer bear. It is a vicious cycle. Lenders were encouraged to offer ARMs so that people in expensive areas could get into a home.
This is all along with skyrocketing utilites and other prices making home maintenance and ownership much more expensive. Add to that, cheaper areas to live also come with longer commutes: gas at over $3 a gallon anyone?
Come on everyone; quit elevating yourselves over peoples misfortunes and remember the day you could use your brains and come up with some ways for our government to keep the economy on a more even keel.
I have moved to an area with a much cheaper cost of living and a housing market that stays more even/flat. I wish it could be this way all over the country.
Because I came down with cancer at this time and my husband changed jobs, I am paying a great price. Even though I tried to prevent it, my credit will now be ruined. My mom also lives with us, and she is a six time cancer survivor in follow-up care. My husband could no longer take his high-pressure job and 2-3 hour per day commute. We are now near his family and great medical care.
If this had happened to us before the market collapsed, we would have sold our house for a modest gain and put that down on a new house here. It was bad luck and bad timing.
But people need to look at this subprime crisis along with the WHOLE economy. High utilities and high gas always equals inflation. Thank you for listening.

The only people who will tell you not to walk away are the bankers and mortgage holders. If you owe more than the worth of your home, Walk away now! Period! It’s all going to be bailed out by us anyways. Remember folks, the bailout will come from our pockets! Remember the Saving and Loans debacle bailout? Now that you do, Walk away!

Several years ago, we made about $85,000/year, and bought a $200,000 house with a fixed mortgage, which is what we could comfortably afford, even if our situation became less than perfect. Our income has gone up somewhat, and we would now like to buy a larger house. Unfortunately, the market was been artificially inflated by others who have borrowed more than they could afford, didn’t consider the possibility of “what goes up CAN go down”, lied on documentation-free mortgages, or taken out HELOC loans on “future equity”. Now, it is simply reverting to where it should have been in the first place by now, but loans are becoming more difficult to get even for people like us with patience and good credit, because of less responsible buyers. I learned to read in the first grade, and my mortgage documents, and current and possible expenses were written in very clear 12 point type. And OF COURSE banks are in business to make money. That isn’t a surprise, I knew that when I signed my mortgage, which is why I READ IT FIRST! This is to a large extent a zero-sum game, and walkaways ultimately raise the costs for all those NOT walking away or looking to buy. Why shouldn’t the people who were responsible and patient be rewarded by lower prices and easier morgages.

I think that the only people who are saying that it’s never OK to walk away are the ones with some sort of interest in the housing or lending industry. My wife and I bought a 1 BR condo for 130k in 2006, we’ve been trying to sell for over a year without even a SINGLE SHOWING. The condo has been listed at 115k and now I am competing with 2 BR’s priced LOWER then my 115k. Another 2 BR was sold last month for 70k. Obviously, my only option is to walk away. We are now a 4 person family confined to a 1 BR condo. My whole life I was told BUY, BUY, BUY, you won’t lose money. REALTORS and LENDERS destroyed the American dream.

Too many folks are ‘thinking’ with their intestines. An individual who has made a bad deal, for whatever reason, should not be forced to spend several decades of his/her adult life working without reward to pay many thousands of dollars of [essentially] punitive damages just because an asset that they agreed to purchase happened to lose a portion of its value. He/she should simply give the asset back. The nature of the deal, from the beginning, was/is that a homeowner must make regular monthly payments or else lose his/her house. Losing or surrendering the house was/is a legitimate part of the agreement. If a homeowner deliberately chooses to surrender his/her house, it’s simply an economic decision. It’s a part of the original deal. Walking away from an unacceptably bad deal is the logical thing to do. Why should any underwater homeowner be legally bound to contribute even a single dollar towards the financial health or survival of whichever gigantic multi-national corporation that happened to purchased his/her securitzed mortgage loan?

Oh yah one more thing….

Has any one thought about how much trouble we all are in? We all live in the American Empire. The prices for food are going up, gas prices? (Need I say more?) Raises? (If you are lucky enough to have a job in this economy!) They are only 4% if that a year. Every thing is going up and up, electricity, gas, any thing and every thing you can imagine. Oh lets not forget about the Health Care issues, our Borders, and Children killing Children. I am tired of going into a store and picking up 100 items and all of them made in China.

The housing market is only the beginning of what is yet to come. Every one cares only about greed and jealousy, and ignorance runs ramped as though it was the most dangerous disease. Wake up America before it is too late!

Sure, why not.I am a home owner and hard time to catch up with my payment. Try to talk to lender about that and they really don’t want to listen until you miss you payment. Trying to do the right thing but can’t do it without doing it wrong.So,live there for free a few months, keep the money and walk away.And let’s see how my lender feel.

When I signed that paper, I know I am responsible for that loan. However, the lender also knows I could walk away and they loose money if the price of my house in under what they lent me. Fair game, as a business, they are aware of the risk and I was aware of the risk – nothing new people, there is a reason why lender doesn’t let us borrow if their risk is too high. So if it is legal for me to walk, I walk. It’s only business.

In response to Janet’s comment below, not everyone in this crisis can be neatly lumped into the “idiot homeowner” category as it was so eleoquently put.

My husband and I purhcased a $685,000 home in California in Spring 2006. Not even 2 years ago. It appraised for MORE than that at purchase time. A mere 2 months went by and our value decreased by more than $30,000. Now, 2 years later, our home value has most likely decreased by $150,000.

A professional in the industry (the appraiser) valued it even MORE than we paid at time of purchase. We paid this man $350 to appraise our home accurately (a check and balance of the home-buying process) but the reality is, they didn’t see this coming. Nobody did. For those who say that buyers should have known better let me remind you that lenders, appraisers, our own government failed to see this coming and did nothing to protect themselves or buyers.

I legitimately bought my home. My husband and I made and had been making for several years over $200,000 annually. However, we both work in the housing industry. We have both been laid off, as many Californians have been because of the downturn of the housing market.

So where does this leave us? We are $150,000 underwater. We don’t have the cash to sell for less, and we literally have little income coming in. We have 2 children. We bought a home in 2006 based on our real and current salaries that we had been making for years. There’s was nothing illegal, illegitimate about our income. But now it isn’t there.

What to do? Is it “wrong” to leave? Can anyone say we were incorrect to buy a $685,000 based on a joint annual income of $250,000? Unlike Janet in Colorado, you can’t come by a $200,000 family homes in Southern California. We purchased this home because that was what was the inventory available to us at that time.

If Janet is intimating that we should have symptahy towards these banks, let me remind you that they are the root of this entire problem, as they feverishly gave loans out to make a buck to anyone who wanted one. Giving out ridiculously low-rate, short-term loans caused housing prices to spike, and fall just as quickly. If you ask me, it is the banks who deliberately skipped the process of screening customers and verifying incomes intentionally in order to generate more business for themselves.

Sure, some people made a pretty penny flipping thier homes or refinancing, but so did the banks during the height of the housing boom.

Now we all pay the price. The lenders, the people, and our economy are now currently suffering.

So my opinion is, as long as it is not illegal to walk away, then it is OK to walk away. Our government has set it up so that we legally can walk away. It’s likely because they know that the people are what drive the economy. The last thing the government wants is for all of us to be saddled to rising mortgages or mortages that are no longer affordable because of the market’s downward spiral, because that means we aren’t spending money, and that means recession.

As for my husband and I, we are still deciding what’s best for our family. But you can believe that if we decide to walk, we will not feel the slightest remorse.

Sure, legally it may be OK to walk away, but that doesn’t make it morally right. No matter what nice name you put on it, it’s still fraud. Fraud again the same companies the debtors are accusing of fraud, and fraud against the public , those of us who will end up paying it for you in higher costs. We curb our desires with common sence. You knew you couldn’t afford it in the first place.

It’s Ok to walk away when you have loss your job and the only means of employment is working at fast food restaurant. You have 3 kids, so I do understand. Sometimes in life you have to walk through it to really understand.

Many folks counted on increasing, or at least stable home prices to help with their retirements. An investment.
At this point the investment aspect is lost. The only homes moving/selling are the forclosures…and not that many of them. Forget the MLS listings…thats just dreaming.

How low will prices go? Probably much, much lower…and the recover from the bottom could take many,many years. A whole generation now understands that home prices can drop big. It will take time for them to forget…lot of time.
Many folks I have talked to in my area (Tampa) are planning to buy new cars and TV`s and arrange to rent a place before stopping payment on thier homes and loosing thier credit.

They can rent for a fraction of a house payment and bank the rest for a down payment on a home in the future…after prices have bottomed.

Walking away is the best solution for many. They can live to buy another day at a much lower price.

It doesn’t matter what I think. People will walk away. It makes financial sense for many people to do so. The banks who wrote these loans allowed sub-prime borrowers to leverage the banks money, with no almost no strings attached. They assumed, as did the borrower, that prices would continue to rise forever.

Both the borrower and the lender made this mess, and both will pay a price regardless of what happens.

The real shame in all of this is that people such as myself, who bought a house well below my means, will also pay a price. It makes you wonder why anyone should play by the “rules”.

I feel for any and all who have lost out on the Governments latest scheme. But I hope this will be enough for all Americans to learn the meaning of a commonly used word in politics. “Deregulation”. This mainly conservative word has been pandered as the cure all for our economy and business. Deregulation of the Real Estate industry, like all other industries, is a license to steal. Regulations that were previously in place, would have protected 80% of the present foreclosures, by illiminating those who really couldn’t afford it and by keeping the predator mortgage lenders out of the market. Let no one try to convince you that the Government didn’t see this coming. Representatives of the Real Estate industry lobbied our representatives into deregulating the industry to their advantage. DEREGULATED MARKETS ARE NOT YOUR FRIEND. The next time you here a politician prop up deregulating a market to improve conditions, choose somebody else, or run!

Oh, and I forgot to mention that in early 2005 Greenspan, head of the fed, was encouraging loans that were doomed to failure. This fraud is not the responsibility of the homeowner in distress. It is the responsibility of the federal reserve that lusted after Iraq petrodollars and used easy money to finance the Iraq War. I don’t feel sorry for bankers who have left their senses!!

Of course it is ok to walk away. It is like selling a stock as it goes down. The investment was bad, it was rigged to be bad, by a greedy federal reserve and member banks. It was done to finance the Iraq War and whatever happens to the banks is their just reward. Individuals should not be held responsible for a government and banker ponzi scheme.

as long as you understand the you are going to go through foreclosure and have your credit reflect this decision, the call is yours.

More math classes..

Wash DC median HH income: $40,127
Wash DC median Home price: $364,900

BTW the “Median” home in Washington DC is a 2bdrm condominium. How does a family live in that?

Just a thought…

Walk away. I got a 7-year arm, I’m on the 4th year now. I paid $238k for my 2bdrm 2bath condo in the Washington DC area. I put 5% down, borrowed 80% on a first and 15% on a second. My condo fee is nearly $600/month (includes utilities). The condo was last updated in 1984.

I FULLY renovated it MYSELF and dumped $30k of material only in it, not to mention the weeks and weeks of labor. I’m talking tile, granite, stainless steel, hardwood floors, new carpet, you name it…

now I will be lucky to get $259k for it. I will probably walk away from the closing table with $1000 in my pocket after I pay the real estate agent who will walk away with $15k.

And that’s ONLY if the market doesn’t fall more. If I have to produce cash at settlement for my sale, fergidaboutit! Walk away, it’s total bull!

But if us home owners are getting stuck with losses, I think the agents need to lower their rates too.

Your just plain stupid if you walk away!!!

Walking away is leaving money on the table! If you can afford any type of payment the Mortgage Servicing Companies are typically willing (depending on the Servicers level of competency) to put homeowners in programs that will reduce monthly payments, i.e., Modifying loan terms. Some investors and mortgage companies are even willing to forgive debt or to set up balloon payments in order to keep loans cash flowing. It’s not in their best interest to foreclose.

The only time it is ok to walk away from your home is when you have a true hardship and cannot afford a reasonable payment even when the lender reduces your interest rate, payment, loan terms or even attempts a balance reduction.
Work with your Servicer – Call them! They will help.

It not OK to just walk away just because the law allows it. Ethics in this country are in the toilet, so it’s no wonder that many will walk away,. I pity their arrogance and want to let them know that they are in part to blame through their contribution to the demise of honesty and integrity. A handshake used to mean something. Shame on them!

I’m sorry that the mortgage company’s appraiser overvalued my home, but that is the bank’s fault, not mine.

I owe $150,000 on my house and nobody will buy it or put in an offer (it’s listed for $149,000.)

We already have another home and are making payments on it. If nobody buys our first home by the time we need to move into our new place, we will walk away from the first one. Sorry, that’s life. If it’s worth what they said it was, the banks should be happy to have acquired a new asset.

Here is the thing. The government shouldn’t be bailing any one out. However the lender made a bad business decision by loaning money on over valued asset ,and has to be held accountable. If you where to walk away your credit would take a hit, and the lender would take a loss. So as I see both sides will end up paying for their mistake.

The greater public, government, and honest working man should not have to bail out the ignorant, ill informed, and poor decision making masses. You should be punished to the extent of the law for a default and deal with the future consequences…..

I think it’s really sad in our society today that being poor makes you a bad person? No one wants to be homeless! The lenders need to take some responsibility. Keeping up with the Jonse’s has always been an issue and now it’s time to live within your means. Stop being ashamed of who you are and what you can afford!!

I say 110% WALK AWAY!! The lenders irresposible greed is what got everyone into this mess. The banks greed and loose money has significantly reduced the american standard of living. Real estate values MUST come down for the average american worker to live within his means. If a bank is willing to lend me 400k NO MONEY DOWN, who is taking the risk? THE BANK! The banks went into risky investments and they failed. It is their problem and hopefully real estate will go back to being a place to live and not an investment.

The only people fearful of homeowners walking away from a bad situation are those who stand to lose out on their own investment in the lending industry or who fear empty homes in their neighborhoods will affect their values.
As a hard-working, morally intact and sensible person, I’m insulted by the comments that assume the millions of us caught in this crisis are idiots or that we somehow caused this situation.
My wife and I were more than able to afford our home and fortunately we continue to be able to afford the adjustable rate mortgage – for now. It was on the advice of a lender that we took the ARM so as to save money initially. Well, no one saw the values dropping by $20K, $50K or more. Regardless of what some may think of us, this situation that we did not cause is keeping us from being able to refinance the ARM that only two years ago would have been no problem (the lower rate was still in effect then so it didn’t make sense). The lower value of the home and the higher interest rate and the refusal of 8 lenders to refinance us AND the refusal of our current lender to work with US, has led me to consider something I never thought I would -walk away. It is a legal option and when the monthly payment is no longer buying equity, it doesn’t make sense to stay in a negative revenue situation.
If anyone has suggestions on how to convince a lender to work with you when you have the income and have an action plan but no liquid cash please do post it. We have been at it for almost a year now and there is no help. Ironically, most of the programs designed hastily in the last several months to help alleviate the situation actually require that foreclosure is either imminent or proceedings have started. We’ve called all the ‘help/hope’ lines and, since we’re being proactive, there is no help and there is no hope…only a future in a few short months when we will no longer be able to make the increased payment (of course, then perhaps there will be help offered when it’s too late).
I’m in full support of walking away. At this point in time, it’s just good business sense for some of us. And, the damage to your credit can be rectified in far less time than if claiming bankruptcy.
The lending industry is so fearful that further regulation will occur that they’ve come to define the terms in the Housing Act of last fall with such a strict and narrow sense, that practically no middle-class wage-earner is able to refinance.
Even deferred student loan repayments are counted now in the calculations of debt to income ratios, which was not an issue in the past. Remarkably, our excellent credit score and excellent payment records mean nothing as well in this latest market trend. After sacrificing to achieve those excellent ratings and to still be in this situation has me wondering what point there is to those years of sacrifice. I would ask those who are so judgmental of us in this crisis to please do more research…if you’re fortunate enough to have substantial liquid cash (another growing requirement for lenders who regardless of size/name/etc are cash poor),a fixed rate loan and you’re not losing value in your property, good for you. But, your reality is not the reality that millions of us are facing in this crisis through little or no fault of our own. Thank you.

Did everyone forget that the appraisers that appraised these homes for almost double of what they should have appraised for are laughing all the way to the bank.

As cold as it sounds, the sooner that we get these people out to the streets, the faster our economy can start recovery from this mess. The more we help these greedy people who are addicted to easy money trying to keep up with the Joneses to show off their pretend wealth, the more we are dragging to keep the economy down. In the end they did not lose anything anyway, except for prolonging to display their fake wealth. They never own their houses anyway, the banks owned them. So time for them to hit the streets and learn their lesson to live within their means. Their addiction to easy money will hit them hard. These kinds of ignorant and greedy people are the very reason why we are suffering with a bad economy. True, the lenders prey on these ignorant and greedy “victims” but no one forces them to sign the dotted lines. Isnt that what capitalism and democracy is all about? They did this to themselves. IGNORANCE & GREED is never an excuse. Let the greedy, ignorant weaklings fall.

It is ok to walk away when you owe more than the house is worth. The losers are the lenders. I know someone who got a new house for 135K in 1995, then refinanced 2003 to cash out 50K, refinanced again 2005 cashed out 100K and then took 100K equity loan on early 2006, using subprime minimum payment ARM, then never make a payment since then. After series of default notices, the house was foreclosed. That was after cashing out 250K on a 135K house that was overassessed to 495K that they used as rental. They were very happy with the outcome. Even though their credit was ruined, they came out $250K richer. It’s really the lender’s loss if you look at the whole picture. Why hang on to a mortgage that is more the the investment value. Just stretch out the foreclosure process until it’s over.

Walk away if you can. As long as you don’t go to jail or breaking the law, do what you can do for your best. Th reason is,
That is how this word (at least US) works. If you see big American corporations, they play game on the border line of legal and illegal. If you can do illegal things without being caught and if ONLY YOU can do it, you can easily get rich. Imagine you can sell drugs on the street with no fear of going to jail while others can’t. Those banks who gave out ridiculous loans and wall street genius who invented this chaos, got rich by working this way. Their basic attitude in the business is like this. “We will steal from others if the law does not says it’s illegal”. They have no moral. There is no moral in business at first place. So why would you have one especially when you deal with these blood suckers?

Yes. you are to be blamed if you got a morgage loan of 80,000K when you make only $10/hour. But you are not the only one who to be blamed. We must blame the banks too. Are you going to blame only who bought drugs but not the drug dealers? They sold you drug. So they must be blamed too.

I don’t want any of my tax dollars to be used to save these banks. Not even a penny. They too, must take responsibility on what they did to themselves.

It is a sad day when a reputable news agency like CNNMoney uses the plight of a get-rich-quick speculator as the lead part of a story on housing woes. Of course David doesn’t want to use his last name, because he should be embarrassed by his shameless gamble that didn’t pay out. Buying two homes for over $1 million with interest only variable loans is on par with blackjack. Unfortunately, his bet did not pay and the rest of us will be left to bear the burden as he simply walks away from his obligations. The sad thing is that some people actually feel sorry for people like David. You gambled, you lost, now pay up. A house is a home, not an instant money making venture with no risk. Perhaps the worst thing of all is that David’s actions, and the actions of others like him, are what created this giant mess. They bought houses they couldn’t afford, with loans they couldn’t pay. Now that reality has set in, they are further depressing their local market by leaving homes vacant. This leaves their mortgage paying neighbors who actually live in their homes feeling the pain of depressed home values as another foreclosure sign is raised.

“It’s never ok to walk away.” I challenge that response. My wife is now on permanent disability and her income is less than a 1/3 of what it was. My business has taken a major downturn. We have tightened out budget and given up all of the “extras” however, we simply cannot afford to pay our current mortgage.
We have made countless phone calls and sent over a dozen letters over the past 9 months asking our lender if there was some way we could lower our payment. We presented multiple options that made the best of a bad situation. The lender only responded over and over and over again that they were not willing to do anything.
We are done. We will now do everything allowed within the legal system to stretch out the foreclosure process so that we can replenish our reserves. We plan to rent and wait out the down turn in the market. Currently we can rent a similar home for HALF of what our current mortgage is. I hope the lender takes as big a hit as possible.

How on earth can anyone blame the bank, government, or anyone but themselves. If you’re not smart enough to do simple math, maybe you shouldn’t be buying a house. It’s not hard to figure out your monthly income and see what you can afford. Quit trying to keep up with other people and live within your means. It’s not a right to own a home. Get off your a** and take a 2nd job to save money for a down-payment and stop the interent-onl loan.

Sure, walk away. My wife and I are first time buyers with good credit. The more houses that banks have to dump to keep a cash flow, the more prices come down. The more people who default and screw up their credit rating, the fewer competitors we’re up against on the houses we look at (and so the prices come down). By all means, keep it up!

Sorry if I sound like a jerk, I’m just trying to get into a home that is currently overpriced due to people like this writer who bought two (or more) homes, no money down, because they wanted to make a quick buck. I know there are real owners out there having trouble, but I have a hard time being sympathetic when there are so many stories of poor, innocent so-and-so who can’t afford the payment on their 2nd $500k home. Boo hoo.

The banks and borrowers got in bed together. Let them reap the rewards of their acts. Why should I, a accountable and responsible homeowner and taxpayer, subsidize others’ terrible decisions. Yet, the IRS s providing tax incentives not only to forgive this behavior, but promote it, the Secretary of the Treasury is working with banks to provide relief, and how about the Federal Reserve handing out $100 billion in clandestine loans to the big commercial banks, as well as indefinitely providing exemptions to the law of separating banking and financing sides of the house? This isn’t over–not by a long shot.

For those of you that are talking about morality or some obligation to not walk away from your home or investment property, you are living in an incredibly narrow world.

Not only is it ok to walk on your mortgage, it is an option that the lenders give to you in writing when you purchase a home with a loan. You are basically given these terms by the lenders as far as repayment goes.
1. Pay your monthly obligation to the lender. If you miss a payment or two we will report to the credit reporting agencies and there will be late payment fees. If you pay on time we will report that to the credit reporting agencies as well.
2. If you are unable to pay your obligation to the lender then you may surrender the house (collateral) as the second option.

Its right there in the paperwork you signed when you took the loan on the house. The kink in this is that the lenders are COUNTING on peoples unwillingness to make themselves look bad (to whom I just haven’t figured out yet) and to continue making the payment regardless of thier financial circumstances or the value of thier INVESTMENT.

THose of you that continue to make your payments and are so quick to cry foul on those that walk away are doing that for purely personal reasons as well, even if you wont admit it. THier walking away is damaging your property values, leaving areas of your cities empty or with many forclosures, and the possibility of some taxpayer paid bailout. You are merely expecting others to suffer so you don’t have to. I can’t say as I blame you for feeling that way, but again its just a business decision. Each of you still have the option of walking away as well, so its not like its an unfair playing field.

Personally, I have no obligation to anyone but the bank when it comes to purchasing my home. Not to my neighbors, not to my community, not to the economy, not on any level be it financial ( I am not responsible for the value of YOUR home), or moral ( ITS BUSINESS). I am nothing more than a number to the banks and lending institutions and am not treated with any sort of true decency or morality, why should I be held to a high moral standard when the banks have no such compunction?

Get a grip and realize that you cannot ask others to suffer for you to not have to. Talk about morality problem! If your palnning on staying in your home, have made the payments, dont mind being upside down for 5, 10, 20 years on your loan because you plan to die there or something then someone walking away doesn’t effect you anyways. If you plan to refinance and take that equity out so you can live a better surface lifestyle or sell in a year or two to upgrade once the prices have fallen enough, well all I can say is your INVESTMENT has taken a serious dive (like many other investments that have RISK involved) and you are going to suffer the market decline.

Get off your moral high horses and realize that people can rent a better home for less per month than they can pay thier mortgages.

To the mortgage proffessionals that are saying its just wrong to walk away, quit trying to protect or rebuild your incomes, thats all thats about. I can say this with complete accuracy, since I was a Mortgage proffesional until a year ago working for a lender.

Those people that are walking away, for whatever reason, are not asking you to do anything for them. You all need to quit asking them to do for you.

It’s OKAY to walk away anytime. With a mortgage amortized over 30 years the banks have made their money in only a few years of their usurious loans.

If you can live free for a year and stiff em for a good amount go for it in fact, if you were smart and sucked out an equity loan and stuffed the money in a shoebox (or better yet in gold coins stuffed in a shoebox) good for you!

Send them some jingle mail and laff all the way to the bank.

It is always ok to walk away. Getting a loan on a house is a business agreement that can be broken. Of course, their are potential costs to breaking this agreement such as a poor credit rating and a possible tax burden if the bank sells the house for less the value of the loan. Banks and individuals were blinded by greed in this house price bubble. Unfortunately for the banks, they were stupid enough to not require that borrowers put some significant skin in the game in the form of large down payments. I happen to have sold my house 1.5 years ago with a significant profit, and I will wait out this downturn renting one of the many nice houses that are available. However, I would not have any qualms about walking away from a house if the price was significantly below what I owed on it – especially knowing that it would likely go down even more the next few years.

The sooner you walk away, the better. The amount you might of debt forgiveness you might have to pay taxes on will be less, and you can begin rebuilding your credit now in preparation for when housing prices are more more affordable in a few years.

Do not be afraid to walk away from a loser investment.

The first time I purchased a home, I qualified for FHA and a bond program that was available to low income people. I had a team of people making sure the house was up to code on all electrical, plumbing, roof, etc. etc. We worked as a team; my loan was affordable, I had to pay mortgage insurance since my down payment was less than 20% which also helped to protect all parties involved. What resulted was I had a great home, I could afford the payments and the realtor, mortgage company, title company all made money. Wonderful!!!! I sold that home 10 years later and made a nice little profit and shared it with the IRS. Everyone made out.

This time I felt I was coerced into a bad deal. My realtor swindled me out of an inspection; the 80/20 loans I got once escrow was added in; was more than my monthly income due to the hurricanes, homeowner’s insurance was outrageous. I ended up with a home that had two broken appliances, central a/c broken and septic tank problems. I fought with everything I had to pay the bills; repair and replace the broken items and improve my homestead. When my husband got into a car accident and we lost his income; it all fell apart. I hated myself for not being able to keep it together. I ended up having a nervous breakdown. I tried to get help to resolve the crisis. There wasn’t any. The realtor, the underwriter; the mortgage company all made money and now that didn’t want anything to do with me. The realtor wouldn’t even get out of her car when I saw her in the shopping center; she couldn’t even face me. I had two choices; walk away with my head hanging low from embarrassment and failure or pull the trigger. My life was more important to me than my home; credit score and reputation as a good citizen. Because none of that matters if your dead! Have some sympathy folks; the majority of us who got into this position was pushed, coereced and manipulated by experts wanting to make as much money as possible while the going was good.

Has anyone actually stopped for a second and read what they wrote??? Your not a 5 year old walking away from a soccer team or a teenager walking away from a car they can’t afford that gets repoed…. Your grown adults that are walking away FROM THE BIGGEST INVESTMENT OF YOUR LIFE THAT YOU GOT YOURSELF INTO!! If you bought a house and settled into it for a couple years and bought a house YOU COULD AFFORD than you wouldn’t be in this mess. But no, America lives off the equity of their homes and lives day to day never thinking about “what if”. Well that time has come where you can no longer live off the equity of the house you couldn’t afford to begin with. Educate yourself on what’s out there because there are PLENTY of programs out there to help you save your house. I’ve been a mortgage banker for 6 years and i’ve seen there best of the best market and unfortuantely the worst of the worst market recently. EDucate yourselves on what mortgages are out there. FHA is a government insured mortgage that HAS NOTHING TO DO WITH CREDIT!!! It’s entirely income driven and it can go up to 97.75% equity in your home at a 6% interest rate!!. WHY?? HOW IS THAT POSSIBLE?? because the Federal Housing Administration (FHA) is insuring thebank that’s writing the loan. Are you over 62 years old?? and have a decent amount of equity in your home?? GET A REVERSE MORTGAGE! not only will you get rid of your mortgage payment, but the bank will pay you out of the equity of your home for the rest of your life. it’s a no brainer. I’ve been doing this like i said for 6 years and theres always an answer. If you took all the equity out of your home 2 years ago and you owe more than your house is worth than sorry you can’t be helped and you deserve where you are at. IF you want some help email me, im here ALL DAY EVERYDAY. MMAXWELL@CONCORDMC.COM i’d love to see if i could help you BEFORE you walk away….

To those who say: you made a promise to pay, it was a contract… The agreement signed stated something like, “I agree to pay. If I stop paying, the “bank” gets the property back.” When this agreement was signed, the bank decided that the property was worth enough to cover themselves if the buyer stopped paying. It was not just the buyers who believed the homes were worth more than they really were. The banks made the exact same judgement. The best and most fair solutions will come about when the “banks” work with the “buyers” to reach new agreeements based on the new realities. Banks that won’t work with people will see more “responsible walkaways”. Buyers that won’t work with banks at all will “walk away irresponsibly”. Everyone gets to decide whether or not they will do the right thing, and it will take two parties to make it work.
Let’s talk about the money for a bit. The money didn’t go away. It got redistributed. The last seller of each house took a portion of the money, and is out there buying things with it. Maybe more houses now, at lower prices. Maybe stocks. Maybe cars or vacations. So in the end, money was extracted from some people and some businesses, and is now going to other people and other businesses. Capitalism at work, frankly. You love it if you are on the upside. The same thing happens every single day in the stock market.
An impressive outpouring of emotions on this topic…..

I’m in a situation where giving up the house is our only solution. I live in FL, and when we bought our house we did see the amount we would be paying, but after insurance companies and taxes skyrocked we’re paying almost double what that bottom line said and cannot afford it anymore. When you also add in gas prices forget it.

I will walk when it’s time. One thing is certain, I believe, when the leaders of this world cannot help us progress beyond where we are now we are doomed. Finances or lack of won’t save any of you from anarchy. Think about it… should we be having to pay for water, electricity, gas to heat your home? We spent a TRILLION dollars on Iraq and Afganistan… what would that done here? Power plants, pipelines, natural gas exploration? Thanks gov’t for putting us all in this mess. I like the thing where the Aliens come from space and say “Man, you people are so screwed up we’re just gonna put you outta your missery. Zaaaappppp! a little puff of smoke here.

It’s never OK to walk away from responsibilty! We should bring back prison for these people.

I am sorry..But, I am about to walk away from my home. I tried to work the problem out with my Bank and they did a loan modification. But, It did not help at all… I was on a ARM…But now I am on a 30 year fix. They even reduced the loan amount. Everything sounded good. I thought we would be ok. But, then I found out that the payment was about a 100.00 more than what it is now. So, it just put me in a another postion where I have to walk away. I told the bank that this is not going to help. But, they ignored me on that. We took it anyways just to buy us more time to figure it out.

I have really wanted to do it. It seems you get more help if you are behind than if you keep up with your payments, even I am making it, I am thinking about letting everything go behind that way I can get help.

Wow. The thought that abandoning a home is even an option or a consideration saddens. The biggest problem with our society, the one that has caused the most problems, is the sense of entitlement that has been thrust upon us by left thinking people and politicians. I especially have no sympathy for investment purchasers who used no-interest loans as a way of stockpiling potential revenue. If your first action in a tough financial situation isn’t to do all you can to meet your obligations, you are a deadbeat, hands down. If you have to sit on a property for a few more years, so be it. If you have to get a second job to make more money, so be it. If you have to swallow your pride and borrow from Mom and Dad, then do it. I think we should enact some legislation that says if you abandon a home/mortgage, you should have a penalty on your credit as severe as bankruptcy. Be responsible America, pay your debts and quit being so damn greedy…

No, I don’t think it’s okay to walk away. All these people who got no money down mortgages or are paying interest only loans are ridiculous. You know what your payment is going to be every month before you sign those papers. I don’t think the government should be involved in the mortgage crisis. You know what you can afford to pay–stop living beyond your means. If people get bailed out now they’ll never learn.

It is never ok to walk away. The banks paid out all of the profits that homeowners earned when they flipped their homes. When a homeowner purchases a home, they are agreeing to take on the responsibility of the house. These idiot homeowners who try to blame others for their irresponsibilty truly knew whether or not their $10/hr job would pay for a $300,000 mortgage. My husband and I make just over $100,000/year and we settled for $200,000 home to make sure we should comfortably afford the home (we have three kids we want to put thru college). This is not brain surgery. Not to mention, most of these people LIED about their income or they would’ve never received their mortgage. Why doesn’t the government assess punitive damages that can’t be BK’d out to the homeowner’s that signed any false documentation??

If you find yourself in a difficult situation and foreclosure seems a viable option, by all means walk away! It’s not like you’re doing anything illegal…

Although many people may think this is a bad decision, shows a lack of “moral fiber” or whatever, walking away is a LEGAL option. Many corporations — Enron, etc. — don’t even abide by the law. They simply take the money and run. And many banks and creditors that do operate within the legal limit have teams of attorneys working for them to determine just how “legal” they have to be. Despite what they may have you believe, profit is their number one — and often ONLY — priority.

I agree that foreclosure and bankruptcy may be “bad”(?) decisions but that’s why you take the hit to your credit score — at least for awhile. But it’s not like you will never again be able to get credit or buy a house or car. The credit industry WANTS to give you it’s money — all they want in return is the most profit they can squeeze from you.

In 2003 I bought a townhome valued at 92,000.00, obtained a 30 year fixed rate mortage for 6.25% , a monthly payment of roughly $700. I make an annual salary of $45K, so making the payments is well within my means. So whats the problem? Now I’m looking to sell and move in with my future husband. My house has been on the market now for over a year with only minimal interest, and no offers. I cannot afford to lower the price as a sale at a lesser figure will wind up costing me thousands of dollars out of pocket. I have considered biting the bullet and taking the hit as I don’t see this mortgage crisis making a turnaround anytime soon, and why should I wait when there is no chance for me to come out of this deal with any kind of profit??? Isn’t it better to try and engineer a short sale now?? This sounds like a cop out, and I’m in no way a deadbeat. I have owned two homes and have never missed a payment in 9 years. I’m just very frustrated at what I’m seeing and there appears to be no relief in sight for this debacle. Walk away??? Put me on the fastest jet out of here!!!

Our government has made new tax laws allowing us to walk away from our mortgage obligations without a tax consequence. So the message is, if you can no longer afford your home, feel free to walk away.

Our government is printing more money, sending it to us to spend, and increasing our federal debt to make sure that Wall Street will be fine. So no worries.

But if you choose to walk away, accept that you’ll pay more for car loans, credit cards and mortgages in the future. For a little while, anyway.

And you’ll have created an opportunity for homes to be purchased at lower prices for others, so it’s all good.

What do you say we just move forward and do our best? It’s what our government and Wall Street wants. It’s the American way!

I agree that it is not ok to walk away. I am mentioned in the article and we deal with over 10,000 homeowners each month in distress. We is concerning to me is tha we are getting more and more people that are upside down and they ARE NOT working with their lenders to rectify the situation.

There are solutions. I would rather borrow money from friends and family to sell a house than to just turn it over.

We also work with people who are willing to do anything to sell their homes, we have just launched a website for people in preforeclosure and distress sale situations. It can be found at Houses DOT net.

Duane LeGate
HouseBuyerNetwork

Walk away…Only in the good ole USofA. I have lived modestly all my life and I sincerely hope that I don’t have to pay for other people trying to live beyond their means. I am in banking and know the disclosures that these people have to sign. I think if I was going to spend 250-300k on a house I would read what I was signing. We have already dumbed down the paperwork associated with loans to 5th grade level, what else can we do to baby sit these people?

It’s not OK to walk away. In the current crisis, many people readily and willingly took on mortgages they couldn’t afford and didn’t ask the right questions before signing. Many put no money down and had inadequate savings for a crisis. Most lenders will work with their borrowers to resolve issues, but consunmers need to reach out to their lenders early in order to get help. In addition, they forfeit many rights to a workout solution when they just send the “jingegram”, and they severely damage their ability to recover financially.

After recently reading an article that reminded me of the more terrible times people living in the U.S. back in the early 30’s (depression era). In the article they mentioned what type of loans the banks were offering consumers then. Money was being offered in the exact same way it is now, and what got them into trouble. Obviously they don’t believe in history repeats itself, but it did to the tee! Only times were allot tougher for the average consumer. Most home owners are a paycheck away from losing homes. There are a few that have done it the right way. We bought our house 7 years ago in Southern California where the market is still okay, considering the depreciation and all. We borrowed on a line of credit to open a family owned and operated business. Three and a half years later, with no capital to draw from, all our hopes and dreams are just a step away from allot of folks. I don’t feel sorry for myself, but it’s just the facts. We will work very hard and not to try and default on most of our loans, but if business doesn’t pick up, we will then be forced to make some heavy decisions.

I have superb credit, a great job and a long-term positive history.

I do have a 5-yr adj libor-indexed arm. I bought a $550,000 home with a pool, on a golf course and it has plummetted more than $100,000 dollars.

I am grateful I did not put 20% plus down – I would have lost it all. I will attempt to refinance when the time comes, but if I can’t, I’m leaving.

As good as my income is, there is a limit – and as far as the banks losing money – please don’t bore me.

I pay close to $30,000 in interest alone each year and they could still sell the house and make money – I don’t think they’re hurting but if they don’t refinance me, I’m not going to hurt.

Everyone, myself included, knew these homes could not continue to go up and up and up without eventually coming down.

The housing market was insane making people bid or telling them the next phase is $60,000 more if you don’t buy “right now.”

We all deserve this.

So, would I walk away? Of course, I would. I’m living somewhere and eating and wearing clothes, etc.

You do the crime, you pay the time, or money in this case. Nowhere but America can people profit as much as possible and be protected from loss by the government or cowardice. The risks inherent in any investment are known by all. Ignorance is no excuse under law. If you sign up for something, you live with the consequences. Stop sniveling and TAKE RESPONSIBILITY!!!

Sure you can walk away. The bank is taking a risk/gamble just like you are taking. They are marking up the % of the loan and making money off of you. THEREFORE, they are assuming part of the risk. You shouldn’t just burn your home as you did enter into a legally binding contract that if you don’t pay – they get the house back. Guess what – give the house back (in tact). There is nothing immoral about it.

I am somewhat encouraged that most of the posts to this ridiculous and irresponsible article are promoting self responsibility and ethical behavior. Look folks, the buyer beware rules are all over loan documents, and assuming you can read English (loan documents are available in Spanish among other languages upon request), and if you signed the bottom line, it’s your bottom on the line, not anyone else. Suck it up and make the payments however you can (rent a room or two, get a second job, cut out the Starbucks, and on and on!).

I have, I should say “had”, some friends that bought a house, it lost value, so they just moved out for that reason. That is mega bogus, totally sickening. I can’t believe the “loved” the house when they bought it, showed it off at parties, told everyone who would listen about how great it was, and then just walk when the equity dried up. They suddenly hate the house? They made the payments before and can make them still. Dumb and dumber. Here’s the worst: They went out and bought a new home before they let the other one go. Double unethical. Worst, they could get caught for premeditated bank fraud and go to prison. Now that is really dumb.

C’mon, be a man/woman, take care of your debts and don’t blame anyone for how “hard” it will be to pay your bills.

Fed=Inflation $$$ “They Just Print More Money”
Fed=Bank’s=Rate Hikes (They work together)
Fed=Down turn in home prices 25%-?
Gov. =Open Borders=Under-Cut $$$ job’s for all Americans jobs.
Yes every one will loose 25% or more on your homes equity.
Wake-Up America you do not owe the bank or Fed. Anything, they have stolen your all money!
And look who is the moderator big media.

My simplistic logic tells me that if lenders had not offered sub-prime loans, they would not exist. Hopefully they have shot themselves in the foot, but I doubt it. Big lobbyist. Those borrowers who were (who were greedy (who are they?)should not be surprised if they take the hit. Walking away, in general, is a no-no. All other options should be explored (bankruptcies,working with lenders, etc). Hind sight is always 20-20. I suspect greedy ones were sophisticated enough to read all the fine print and thought they could make a quick buck. Maybe they skewed the downside. Anyway, I have no pity for them. If they couldn’t afford to lose, they shouldn’t have gambled.

I cannot believe the following post!!!! I pasted it here because I am amazed at what I am reading:

I’m walking away. This is the bank’s fault, not mine.

Posted By Judy in Ohio : February 8, 2008 8:35 am

To the contrary Judy YOU signed the paper YOU are responsible. I am tired to people’s word/signature not meaning anything. It is time for us to grow up and not expect Uncle Sam or some other entity to bail us out

I got an 80/20 loan with 9.1 rate on 1st and 12.7 on the 2nd for a $300k new house about 18 months ago. Recently, the builder couldn’t sell a home just like mine and was asking for $40k less.

I tried refinancing last year and just didn’t have enough equity, so in October, I contacted the lender to do a rate reduction modification. THEY HAVE DONE ABSOLUTELY NOTHING. I’ve decided not to make another payment.

Question: Should I live in the home as long as I can to save money or give the house back (deed in lieu of foreclosure) to save my credit rating somewhat?

I purchased a condo in SW Florida and it’s lost almost $100k in value. I got into an interest only loan and I can’t afford it any longer. My original intention was to flip it w/in 2-3 years expecting the value to continue to climb. To make matters worse, I used my HELOC loan for the down payment which was about $52k. Yes, I am walking away. This is just as much the bank’s fault as it was mine. They are always in it for the money. It has never covered all my expenses even while renting it since I live out of state. It’s been one headache after another. I’m looking into doing a deed in lieu of foreclosure. Hope they will go for it. And to the commenter that said, only banks open up whenever another business leaves same here in my city. And they take over large retail space. So don’t tell me they aren’t making money. Greed was their downfall and i am partly to blame too. This is what happens when you don’t research properly before taking such a big jump. Don’t we all wish we had crystal balls back then. Live and learn.

The truth in lending disclosure shows in BLACK AND WHITE what the payment will change to when they start to pay interest AND principal. The loan closer verbally told them as well but borrowers put on blinders and sign the documents because “it’s the house they dreamed of”. Even though they couldnt afford it.

Four years ago, I bought a condo for $162k. I put 10% down, I got a conservative loan, I have a modest monthly payment. I have been in banking for 10 years. I had to move. I projected that I could maintain my mortgage payments for a year and a half. My condo has been on the market for a year and three months. I am close to slipping. My condo board has twice denied my request for an exception to allow me rent the unit. I just got my first offer for the property. For $80k. The mortgage company is unwilling to work with me because I’m not currently in default.

Abandoning your commitments for profit is unethical. There have been a lot of comments snarling at the deadbeats who don’t feel like paying. Some of us are struggling to meet our commitments and face an uncertain future.

Judge not lest you be judged.

So walk away from the loan? WOW! What about the families that are in situations like my wife and I? We were moved to California because I am in the military. We decided to rent because it was pretty obvious to me that the housing market was WAY over inflated! Our landlord decided to stop paying his mortgage 6 months ago, said nothing to us, but still decided to illegally keep our rent check every month, our house is now in foreclosure. Now I am stuck with the financial burden of not getting my security deposit back and finding a new rental house to move my family into that “hopefully” will not go into foreclosure. When will people figure out the fastest way to get rich, is to do it slow and steady. Also, live on less that you make – what a novel idea. Greed has overpowered our country to the extent that this housing crisis will affect all of us not just the people “walking away” from their loans.

I’m curious as to where all of these “walking away” people are going to live. They won’t be able to buy a house and do they think landlords don’t do credit checks? If they can walk away from a mortgage contract, why would anyone take a chance on having them sign a lease?

My name is Greg Leber and I am a realtor for The Forward Team. Type in The Forward Team on youtube and you will see our commercial run here in the midwest region. We help people avoid foreclosures by doing short sales. Our team focuses on getting ‘market value’, the banks then consider the offer for less, and take what is called a ’short sale.’ Congress just passed in December 07, that any debt forgiven by a bank, will also be forgiven by the U.S. Government regarding the previous tax consequences which were law. This law is in effect until the the year 2009. The real estate industry would rather keep the economy moving by executing short sales. Consumers pay less for homes. The banks liquidate their debt and cut their losses. This helps the industry establish the true market values of homes throughout the nation. This is a national epidemic and short sales are a viable solution to drastic problem.

The unfortunate part of all of this mess is that it really shows the mentality of our country today. I have one word for all of you people that think walking away is your answer, ACCOUNTABILITY! This attitude of that it is the banks fault is ridiculous and you should be ashamed. How many of you continue to make your car payment? Do you realize that is a depreciating asset? But a car is your status symbol isn’t it? You have to maintain your image don’t you?

I work in the real estate industry and I’ve been to more closings than I can count. I’ve have NEVER been to a closing where the lender didn’t describe in detail what their loan was about. Everyone of you that is considering walking away jumped on a band wagon. Have you ever heard the phrase, “Anything too good to be true, probably is.”? If you didn’t have any money and bad credit to begin with, this is your track record. My guess would be if you could look at the history of these people who simply feel they can bolt every time things get tough, there home foreclosure wouldn’t be the first time they’ve hit the road in tough times.

Not everyone gets to own a home in their lifetime. It is a privilege not a right. The privilege goes to the people that work hard to save their money and establish good credit. There is an entire generation that is living the “American Dream” on nothing but credit. Where has that gotten us now?

It always easy to blame the banks, mortgage brokers and builders. I am in the mortgage business and all I have to say, the blame is shared equally by all mentioned above and the buyers. If you don’t qualify for a normal sized house in the traditional way, why would you buy a even bigger house and pay interest only? There are a lot of predetory lenders out there and I sure am glad I don’t work for them. I can sleep at night. Yes, I do have to turn borrowers away on occasion, but they usually come back after they have cleaned up their credit issues.
Walking away from your responsibility of paying your mortgage is not an option. You should always try to negotiate with your lender, because they rater receive some money, than none at all. And maybe the next time they want to buy a home, they will think about it more clearly.
People need to realize, that if you work at McDonald for minimum wage you do not qualify for a $ 400,000 mortgage.

If my home dropped in value 20-30%, I would likely walk away myself. It would be in their best interest. That said, if these losers walk away, they should receive a foreclosure tattoo across their foreheads and never allowed to buy again.

Buying a home used to be much more than just a business venture. It used to be a defining moment in a persons life. You worked hard, established good credit with a history of timely bill paying, saved up some of your hard earned money, and you bought the house that you were going to live in for a long time – maybe even the rest of your life.

The easy credit of the last decade, combined with the plummeting ethical standards of both lenders and borrowers, has turned home buying from a life long goal into just another business decision.

Americans have grown accustomed to thinking that everything that ails them can, and should, be blamed on anyone other than themselves. Consequently, when buying a house amounts to little more than a business decision, walking away is easy. They think that, because this is someone else’s fault, then the consequences should be some else’s problem. As I said in my last post, the responsible folks are always left holding the bag.

Wally, again…

Is this some kind of joke? When is it OK to walk away? Never. When you sign papers buying a house you are signing a legally-binding, promissory note that you will pay the lender back according to the terms under the note. To do anything else is irresponsible. I have a son and a daughter to raise, and I suspect a lot of you reading this also have children — do your really want to teach them that it is OK to promise one thing and do another?

And don’t just blame the brokers/lenders for your situation. True, there may be some people in trouble now who were misled as to what their mortgage papers said; maybe these people have a case if they were lied to. But if you, like many people, are making the biggest financial decision of your life, shouldn’t you take the time to understand the papers you are signing? If you don’t understand what you are looking at, hire someone (e.g., an attorney) who can assist you.

Besides, walking away from a home loan will cripple your credit for years, affecting interest rates on such things as car loans and student loans. And if you can’t buy a house because of bad credit until you can clean it up, how do you think landlords will look at you in the interim? Being one myself, I can say it doesn’t look good.

It’s really sad how many people in this country can use one bad decision (signing loan papers for a house they can’t afford) to justify other ones (walking away from a mortgage or blaming the lender, real estate agent, title company, etc.). Be a real man or woman and take some responsibility for your own actions.

I’m walking away from this one but maybe I can use my stimulus check to pay the closing costs on my next interest only home loan.

I think people facing this problem should just walk away, you see people dont know that what you call the american dream “home ownership” was a term coined by banks and developers, its not real, banks only care about the bottom line. So in case you owe more than whats worth just walk away, its not worth the pain.

On the side of consumers, americans have a bad habit of buying junk they can live without, why buy an SUV just because you have a kid, just one kid for a whole SUV, thats silly esp when you cant afford, buy a small car, why eat out everyday when you cant afford, cook at home, americans should stop the silly habit of shopping shopping and learn how to save save and save.

The bottom line is you wont be able to buy a new home in 5 years. Credit will tighten. A foreclosure will stay on your record forever. Not on your credit report but there are other reports such as Lexis Nexis that will show this. Dont listen to these Idiots that claim that its Ok. There the same idiots that got us into this mess in the first place and are just trying to justify there actions. They are weak and unethical. The first step to wealth is owning a home. Ride this out and
you will reap the benefits once the market comes back.

It is never OK to just walk away. You signed the form to get the house, you stick with it through formal, legal charges if needed. It’s not just the banks at fault for giving you a loan you could never afford – it’s mostly your fault for taking a loan that you couldn’t afford. Own up to your stupidity and pay the price.

When will everyone open their eyes and see that banks and investors have been making tons of money collecting interest. There is a simple way to pay down the principle of a loan and therby reduce interest saving most home owners ten and hundreds of thousands of dollars. It will not even matter what the present rate is and they don’t have to pay bi-weekly or re-finance. There is too much info to post here. Go to http://www.rodney.wexlsolutions.com for the gist of it.

To Richard who can’t find a financial institution who has posted losses: do you read anything? How about B of A, Wells Fargo, Wachovia, and Countrywide to name just a few. And to Bill: what tax dollars are going to banks?

THE BOTTOM LINE IS YOU OWN A HOUSE AND IT IS WORTH A LOT LESS THAN YOU PAID FOR IT. WHO’S EVER FAULT IT IS, WALK AWAY FROM IT. COMPANIES AND CORPORATIONS DO IT ALL THE TIME DO AND SO ON. TAKE THE DING ON YOUR CREDIT AND MOVE ON, IN FIVE YEARS YOU CAN BUY A HOUSE FOR A LOT LESS… IT’S JUST MONEY AND BUSINESS, SOME TIMES YOU WIN, SOME TIMES YOU LOSE ON BOTH SIDES OF THIS ISSUE…

It looks as if what we have here are uneducated buyers. It’s amazing how people will compare prices and research to buy a TV, but not when it somes to a six figure thing like a house! Guys, your home price should not exceed 3 times your salary at most! That means if you and your spouse make $80,000 total, that the houise should not be more than $240,000. And that’s assuming you don’t have children or any other debt service. If you make $40,000 as a single parent, then your house should not have been more than $120,000. If you couldn’t find one for that price than you should have rented a place!

Unfortunately, people got greedy and wanted the status of homeowner now. Big business made renters look bad in society and no-one wanted to be one. It’s shocking how awful people’s math skills are. Just take that payment that they told you you would be paying, and multiply it by 12 for one year, then by 30, or however many years they told you the loan was for. Obviously the numbers could not have worked. You didn’t even need to compound interest for that. A sad example of how our school system is failing citizens.

And walking away is legal but totally unethical. Just think of how society would be if everyone did that. Obviously it would not be a good thing. Unfortunately we see immoral and unethical behaviour from the mega corporations down, so of course it would trickle down.

And walking away doesn’t hurt the bank. The bank is a corporation, it doesn’t feel pain. That idea is a fiction like the War on Drugs or War on terror. When you walk away, the bank loses money on that loan, so it makes that money back by laying off more workers or keeping intersr rates on credit cards or other mortgages high. Everyone else pays for your mistake. Now the house is empty and becomes a target for vagrants and criminals. And think of how many people
’s salaries at $30,000 will be cut to make up your $300,000 loan that you gladly signed for in your ignorance!

For the people who got caught up, chances are that you will walk away, and that this will happen to you again. many people who go through foreclosure and bankruptcy are multiple offenders because they don’t pay for their mistakes, the rest of us do. Please try and remember why you got in this mistake. Hopefully some of you will learn from this. Your family and health is what is important, not a big, nice house, not a nice car, nothing else. There is NOTHING wrong with renting if you can’t afford a house. Don’t sacrifice your family and well being just for imaginary staus, whether it be homeowner or husband or wife or whatever.

Now home prices will tank quite badly, and on the bright side, the younger ones will get a chance to buy homes at more affordable prices. When you think of the types of salaries that America pays the average person now due to globalization, you can imagine how little the average home price should be at.

No, you are not a failure or scum, but please learn from your mistake and try to have better judgement next time. Please research and NEVER think that anyone is on your side. All the brokers, marketers, agents, bankers are in it to make money and are not your friends.

Everyone please pray for this country. We need to stick together as Americans. All the race and class issues, as well as party issues are just a tactic to keep Americans divided. It’s a myth to think that what happens to other Americans doesn’t affect you. Please hold our elected officials responsible! Until we can get over other people’s ethnicity, income level, political affiliation, sexual orientation, etc, we will keep being taken advantage of by the politicians and big business.

When professionals who specialize in this industry such as property appraisers, Real Estate Brokers, and lending institutions, make it possible for someone to purchase a home and they are wrong with all that experience and procedure how can the home owner be held responsible if they cannot rely on the services of those professionals whom where paid for their services?

It’s never ok to walk away. Your credit will be shot beyond anything you can imagine. Plus, it dramatically lowers the Country’s financial strength and, subseqentaly, the overall strength of the country.

Take also into consideration what it does to a neighborhood. An abandoned house with an unkept yard doesn’t help the neighborhood out.

Walking away from a mortgage is irresponsible. Do you homework and find out what it takes to save your home. Find out what kind of assistance is out there.

I’m walking away. This is the bank’s fault, not mine.

I think we live in a country of people who are not made to suffer the aftermath of their choices. I have been a real estate agent since 1978 and have specialized in foreclosers for the last 10 years, I have seen many people lose their home because of death,medical problems,loss of jobs, divorce and other disasters, but today, these are not the reasons people just don’t seem to care and have a lack of commitment. Once more our goverment has rushed to the aid to save people who can’t and won’t stand on their own two feet. (kinda like our children today)If the American public does not suffer from the course of their actions, I can promise you this will happen again!

Buying a home is a big responsibility and the buyer must be informed, financially sound, and ready to make a committment. The other side of the coin starts from the real estate agent to the loan company. A large percent of them have had only their best interest in mind. They make the buyer think they are crunching numbers when it only amounts to “fuzzy math”. Most buyers should know and have a realistic amount they can spend for closing, down payment, interest rate, type of interest rate, etc. But, they come with blinders on to the negotiating table and let the shysters make fairy tale deals for them, usually using variable mortgage rates to close the deal. The buyer is mesmerized because he wants the home so badly, and against his better judgement, he jumps in, feet first. Big mistake. besides there being a lot of wolves in sheep’s clothing posing as caring real estate agents, and loan companies who really, really want your business. The buyer beware goes out the window, and the big butt bite takes place. Who benefits? The real estate agent, the Broker, and the Loan Company. Who loses? You, the buyer. It is sad to see so many families displaced because they didn’t “think”, they trusted the wolves, so I must say some of the blame is on the buyers too. But, the RE agents, their Brokers, the Mortgage Companies deserve to lose their businesses, their jobs, and their money. That excludes a small percent that did try to be truthful and wanting the best loan possible for their clients, but the majority were as wolves at a slaughter of lambs, a feeding frenzy, and they deserve to pay for their unscrupulous deeds and business practices.While the useless loss of lives in Iraq have been going on, the Corporate World in America has taken advantage of, “WE, the people”, from plastic in dog and cat food, killing hundrend of beloved pets, to lead painted children’s toys, baby bottles, etc. And the unscrupulous businessmen in the corporate world have had a hayday screwing the American Citizen under the veil of the made-up war.Pretty soon, we won’t be referred to as American citizens, we will be knows as American, China, Korean, Japanese, etc. citizens because with all the money that has been borrowed from those and other countries, they own us now…I don’t think we will ever have a “made in the USA”, as that will long be forgotten, just like out US Constitution, and greed will have traded us for trinkets. America, wake up. It’s not about Britany Spears showing her “tu-tu”, it’s about America showing their behind because we are too lazy to want to know what is really going on in our world. Let someone else do it. Most people on the street with their Starbucks and reebocks can’t even identify the candidates running for the nomination of president of the US. Wake up America! You are being spoon fed crap and you are too stupid to care or at least find out the ingredients you are ingesting. We have given over our American ownership to other countries and sold our freedom for pennies. Shame on you! Our forefathers fight and deaths to keep America the Land of the Free and Brave has become a mockery with our disinterest. Well, let me tell you, VERN, all is not well here in America and it’s almost too late to start giving a damn now.

In our city in central FL almost all home building has come to a halt but at the same time we have 6 new banks being built. (That should tell us something.) We have faced forclosure twice now but managed to salvage but don’t know how much longer we can hold on. We may end up having to walk away, the stress is so great that I’m afraid I or my husband are going to have a heart attack any day.

well the way housing is going and has been for a long time people charging more for them that they are worth. plus the ones that rents them is making more and more money off of their appartment building than they are worth. i know this because i see it ever day right across the road from me.i have lived here for 30 some years and i pay my house payment ever month i dont have credit cards because all of them is just rip off and people needs to cut them up and never get a credit card all they are fit for is putting you in dept i will not use them because i would be in dept and i would lose my home no thank you.plus i dont need any thing that bad to get a dum credit card in the first place just wait till you get paid or wait for your check dont spend what you dont have. the goverment should put credits cards out of commiction als a lot of thing people is comming uo with using people to get rich this is not right.plus more jobs are needed here in the united states for americans. but all you hear is americans want work no more and that a lie i know better they just dont get paid for the work they do so a lot of them just quite i dont blame them. if i work i better get paid for what i do or you want see me no more. ever person fills that way. the jobs is give to people that will work for 5 or 6 dollars a hour and all the time the company make millions from them no way pay people right and they will work dont cheet them out of a living the way it is now. all the companys that is poping up we dont need them phone companys credit card comapnys housing coast more and more ever day when most of them is not worth paying 1 hundard a month to live in. and money is the rout of all evil that all companys is out for no matter who get hurt by them no way. we need the goverment to get it fix and make sure people has jobs so they can make payments on the things they need like housing and the cost of living. just mark it up to we need a new goverment everone that in a office job needs to know how to live on 5 or 6 hundard dollars a month plus pay their bills to. then tell me how you like it. our goverment need to care about it people not just throw them away and let people work for chicken feed. know what i mean,

The problem is irresponsibility. Now I do agree there are certain situations, illness and things of that nature, but for people to think that it is acceptable to just walk away is rediculous. Most buyers could afford their homes, but they have the expensive cars, cottages and all the toys. Then they get an intrest only loan or an ARM, knowing that the rate is only set for a short period of time. In my opinion, most people purchased homes that they could never afford, if they had to put money down, and get a thirty year fixed mortgage. Mosy people that I know that are in this situation still drive high end vehicles and stop every morning to get their $4.00 cup of starbucks coffee. We as a society are sending the wrong message to the youth of this country. We are teaching them that when things get tough, dont work harder and make things right, just quit.

Back in 2005, we got a 2nd on our home at a fixed rate. Our home was appraised over and above what it was worth and the mortgage company knew it.
When our daughter graduated from high school and went onto college, we decided to put the house up for sale.
Bad timing.
Then we got into an auto accident which set us back financially and had to quit our jobs due to the nature of the work was too much when we were still having surgeries and doctor appts,etc, back to back. In fact, I have delayed having more surgery due to the fact that I am trying to find a job despite the on going problems I now have from the accident that I NEVER had in my life til this accident.

The house wasn’t selling and we weren’t able to pay bills or the house payments ( 1st & 2nd ) and our realtor said the last option was to try a Short Sale. Mortgage company said NO DEAL. They then started calling us
and getting real nasty and making threats and even showed up at our doorstep!
With no other recourse, we had to file Chapt 13 and hand the house back to them because they didn’t want to work with us.

Those of you who poorly of others and think they’re running away without trying all options…
You need to walk a mile in their shoes.
Til you do, you really have no clue what goes on. It’s best to keep your mouth shut then look like a fool.

As the saying goes: ” It could happen to you.”

Well, it did to us.

Porters Bay (Allsbrook), SC. One such family walked away from their new home in this new development of 104 homes. The family stopped making payments, then after 6 months they disappeared overnight last August.
Several other homes are already in default. A lot of the new homes are not being sold, prices reduced and the contractors keep on building. The builders can afford to do so, because of the cheap illegal labor hirees.
Then the County Council allows for more such development. What was once farm lands and golf courses is now a land of For Sale signs, with no buyers in sight.

Do not walk away, you can do a short sale with the bank and your credit is
o.k. Realtors get paid by the bank, they may get less, but it is the right
thing to do. If they won’t help you
go to another, their are some greedy
people out there. Sell your home
to investors.

I think it’s outrageous! What is a contract worth if you can simply ignore it? Defaulters should be punished by law! So should the lenders if it can be shown they knowingly enticed borrowers who couldn’t repay!

It’s never OK, but so many people get away with it that there’s little incentive to do the right thing. In the early 90’s many people in So Cal walked away. They’re the same ones who were able to get back in with little or no money down during the current run up.

When the choice is down to mental health, I’d say walk. It isn’t worth losing your life & if the whole issue is making you suicidal or worse, homicidal, it is important to remember what counts in life. Have you tried prayer? You’ll get an answer…may not be the one YOU think you want, but it’ll be the right one.

I agree that this should be viewed as business decision and applaud the author of the article for bringing the issue to light.

It’s simple economics, if you purchased property at the peak of the real estate craze with no money down only to see the value drop by tens of thousands or hundreds of thousands of dollars why in the world wouldn’t you walk away from the mortgage?

It will take 20 years before your home is worth that again, financially speaking, you have no equity and haven’t invested much beyond your credit score. Your monthly payments will be increasing and the value of your house will continue to decrease in the short term. Sounds like a no brainer to me, get out!

For those of you who believe it’s morally wrong to take this approach I’d like to point out that it’s the lenders who were offering 100% financing and often times approved loans to people who were less than qualified. They made billions collectively when the market was booming.

I believe many home owners in this situation will hold onto their homes however; many are either too emotionally connected to their status as a “home owner” to make the rational decision or lack the analytical savvy to fully understand their options.

It’s irresponsible for CNN to peddle this garbage.

No one twisted your arm to sign on to this venture. If you want to play you should know you may have to pay. If the shoe were on the other foot how happy would you be if you were left holding the bag? You failed to use common sense or do the research. Now PAY! Scatback Echo

this is about greed. both on the lender side and borrower. I doubt many defaults are occuring because someone bought a house to live in it and raise a faimly for many years. and dont forget the greedy relators. they have no ethics and had no problem watching a house sell for 120k this year, 500k the next, and the last guy got stuck. the real long term solution is to not bail anyone out. the market will shake itself back into shape after this false economy passes.

I love all these people who act like they are perfect. no one WANTS to walk out on their loan but things come up thats out of our control. like my story. my husband & I both lost our good paying jobs. we havnt walked out yet i am fighting tooth &nail to keep my house but if it come down to us starving or saving the house im jumping ship!!!

I run a mortgage division for a bank and have written many loans in the past 5 years. Everyone wants to blame the banks and “interest only loans”. There is nothing wrong with an interest only loan when it properly fits the borrowers goals. What happened during the “boom” is plain and simple greed and too many average Janes and Joes thinking they can make a quick buck and too many people selling loans and only caring about making a quick buck. When your taxi driver is telling you about properties, its time to sell. When everyone you know is in realestate or mortgages its cause for a reevaluation of who you are trusting with the biggest investment you most likely ever make. No one buys a home with a gun to their head, but everyone gets in line to blame everyone but the person that ultimately chose to do 100% financing and interest only just so they could buy a bigger house. Dont buy the HUMMER and then cry that you cant afford to fill the tank, buy a honda and pay less to fill up.

I AM IN A SIMILIAR SITUATION, AND YES, IT’S OK TO WALK. MY HUSBAND HAD SOME HEALTH ISSUES AND THEN BEFORE THAT 9/11 HAD CAUSED US TO SELL TO A BROKER AND RENT OUR OWN HOME. WE BOUGHT IT BACK A YR LATER AND MY HUSBAND HAD A HEART ATTACK, WHICH CAUSED OUR CREDIT TO DEFAULT AGAIN. ALTHOUGH, WE HAVE CAUGHT UP ON OUR HOME MORTGAGE, WE ARE IN A LOT OF TROUBLE SINCE WE CANNOT FIND A WAY TO REFINANCE US, AND WE COULD RISE UP TO SIX PERCENT WHICH MEANS WE WOULD BE PAYING OVER 1800 PER MONTH FOR A HOUSE WORTH 160,000.
THE BUSH ADMIN. HELPED CREDIT COMPANIES WITH BANKRUPCY LAWS, BUT FORGOT THE CONSUMER WHO IS THE REAL BACKBONE OF THIS COUNTRY.

Low and no down payments are the exclusive reason for the walking away problem. It’s just getting started. Now that Fannie, Freddie and FHA are going for $730,000 mortgages, you can bet within twelve to eighteen months, they are going to set off a financial catastrophe that will end Social Security and a lot of other programs too.

The problem isn’t housing, it’s the financial industry that has insinuated itself into every nook and cranny of American society. The deluge of mail, e-mail, calls, faxes, “take this FREE money, no payments for 12 months — only make $10 an hour? No problem! We have $200,000 for you.”

Housing was one of the few things in American that hadn’t been turned into a gambler’s Ponzi scheme. Now I’d say there’s almost nothing left.

I feel for homeowners in fixed rate loans watching this happen. They don’t want people to walk because they don’t want prices to drop faster. But they sure didn’t mind when these nutty loans were being handed out to people who couldn’t afford it and it was bidding up prices in their neighborhoods 100%. Wishing that what’s coming won’t happen will not make it go away.

Many Americans have little money saved outside of their expected home equity. So they are going to intensely resist allowing the reality of this situation into their minds. Prozac, whiskey, anti anxiety medication, whatever it takes to put off letting the seriousness of this sink in.

But it is coming and nothing can stop it.

Telling people to hold out is a terrible idea. Even if the Feds can print enough fresh money to keep things on life support until after the election, 2009 is going to be the biggest horror show since the 1930s. Telling people to pay every penny they have each month into a house they will be forced to abandon in a year or two is stupid. They’d be better off saving the money to keep from being homeless in a year or two.

What happens if there is a real recession, like the ones we had from 1900 to 1985 (instead of the last two, which were uncharacteristically mild)? What if there is much higher unemployment combined with higher food and fuel costs? Do you think it’s better that some of these people risk homelessness in a couple of years because they are blowing 50% of their income on house payments for a property worth less than their loan?

Also, while homeowners with dollar signs in their eyes can’t understand this yet, dramatically lower prices will be much better for America after this painful period is over. We were en route to the most ridiculous system where the only way our children would be able to afford homes with the income/price disparity is if people passed homes through families like the middle ages – where nobody moves for better jobs, or any reason at all.

High housing costs contribute to offshoring, which is why real high paying jobs are being created in India, China, Ireland, and many other places outside of the United States. They aren’t just $1 a day jobs, there are really good jobs over there because the gap between production and costs here is getting so big.

This is going to hurt, but we’ll be better off afterwards. The key is to do what’s in your best interest and not to get too pissed off about the numbers. Some people are going to barricade themselves inside their homes and shoot their spouse and children and then themselves. Others may hurt people unnecessarily, commit suicide, etc.

All of this is unnecessary. It’s just numbers. And if you look back at American income and home prices, the last ten years are going to look like a bunch of people won the lottery and then misplaced their winnings. If you think about it, the bottom 95% of income earners will simply be put back to where they were before this happened: stuck with their incomes.

But don’t get worked up about people walking away. Two years from now, you may look back and say, “wow, I should have walked away two years ago too.”

There are two kinds of people in the world….those who take responsibility for their actions and those who dont and expect others to clean up after them. The lenders offered a product and the consumer bought in hopes of making money…no one tricked anyone here. The solution? Allow those who cant pay to refinance at a fixed rate and tack on 10 years to the loan. Especially now that the rates are going down.This allows those unfortunate a way to own up and not dump their mistake on the rest of us.

Clarification – I bought both of my houses owner-occupied, 3-years apart. I qualified for them both and by filing chapter 13, I had to surrender one because I was over the limit of 1m. But, with my fortunate layoff, I could not pay the plan and the BK was dismissed and my lenders on the surrendered property are trying to work with me. (The 2nd reduced $400, I meet with the first mtg holder on Sat.)

Yes it is ok, if the lender doesn’t help you refinance your adjustable mortgage into a lower rate mortgage. IF you were making payment before it adjusted, why not refinance you to the rate you were used to paying. Also these greeted lender are getting what they deserve…..like Countrywide loans.

I worked in the mortgage industry for 15-years. I bought two houses, owing over 1m. I got behind on 4 mortgages 80/20. I filed chapter 13. I was laid off, so I could not continue the chapter 13. The day after the ch. 13 dismissal I called my lenders, 2 of my lenders agreed to a modification of my (note) loan terms – so far. My HELOC cannot be changed and I meet Saturday with the 1st mtg lender on my 2nd property about a modification. My first mod reduced my adjustable rate from 9.8 to the original 5.8 start rate and it is now a fixed rate. The 2nd on my other property reduced my pmt by $400.00 a month fixed rate. Call your lender now. In December, they were stupid with the 4th qtr schemes. Now, they want to help. Good luck.

Lenders set the trap and some desperate, but mostly greedy people, snap them up. I’d rather sell for a loss and make a deAL WITH THE MORTGAGE PEOPLE.

I wanted to respond to the question of whether or not it is okay to abandon the house, if you are not able to pay the note, after the ARM posts a higher interest rate, and thus, a higher monthly payment. If you cannot pay the higher amount, what choice do you have? If you try to stay, foreclosure is inevitable, as refinance is no longer attainable. Save yourself some grief, and just get out

I bought my home at the peak of the peak in Phoenix after fleeing the hurricanes in FL. My home isn’t worth what I owe and my loan doesn’t qualify for a “loan modification”. Advice from WAMU was to do a short sale, to recieve less of a blow to my credit. BUT, it isn’t a guarantee that they won’t come after me for the balance..yet straight foreclosure guarantees that they can’t sue me. SO obviously it makes since to just give it up. I can assume someone elses loan as a rent to own for nothing down because others are desperate to save their credit, it is a terrible situation for a homeowner with good credit (over 750 score) to be in, but it makes financial sense.

I think people are just following the examples of our politicians. They run up enormous debts, have the Fed print more money then walk away don’t they?

The problem is that the banking industry has been sucking the wealth out of the American people for too long. Who can justifiably say that amortization is a fair markup? If you paid equal amounts of principle and interest, the bank would still make great returns, and people would actually own something to have pride in more quickly.

Credit cards at 30% interest…why not hack off an arm for late payment too?

It’s about time the bank felt the sting they’ve been reaming out of people for so long. I can’t say I feel sorry for them.

Why work for 30 years with no pension, a 401k that loses money, and a 30 year mortgage so you can get to retirement with nothing left and lose your house then anyway? It’s not like the politicians haven’t spent our social security in the meantime.

Too many thieves at the banquet. People are slowly waking up to this rude betrayal. Now the thieves and elitists can start tasting loss.

Would you stay in a job or marriage that was killing you? Might as well leave the house and mortgage and next time do the math before doing something so irresponsible. Information about housing getting ready to go down was everywhere in 2005 and 2006 if you’d just look.

Why were these loans offered in the first place. These types of loans should of never been available!! A lot of lenders don’t explain in detail exactly what your getting into.
They offered the loans, now they should creat a plan to help everyone out~!!! There is always a solution to every problem. It’s just finding the answers to fix this mess, and fast.

I am a conservative person that believes in paying my bills. In july of 2007 my husband’s job transfered him to another state. We put our home up for sell and moved. Hoping that it would sell. Well here it is Feb.2008 and we haven’t even had an offer and now we are paying two mortgages. We are to the point of desperation, barely paying our bills trying to make this mortgage payment. I want to just walk away from the house and forget the whole thing, but I know that is not the right thing to do. But how do average middle class people who actually work for a living, make ends meet. The way our government is it’s almost easier to stay home, have more babies,get food stamps, live in low income housing, get free transportation, free medical care and the list goes on for all those who don’t work and could care less about those of us who try to take care of our obligations. I feel sorry for the rest of you guys that are in the same situation as us. Our country needs help.

All of these folks who bought what they couldn’t afford deserve what they get. Their credit scores will be exactly what they should be – CRAP. I’m not buying this crybaby stuff about being sold down the river. You knew you couldn’t afford what you bought or refinanced – you knew because you knew you would HAVE TO REFINANCE TO STAY! You made crappy decisions which were fueled by crooks. You were no better than they! Integrity and self responsibility are gone in America. This crisis proves it!

We have learned that real estate is arbitrary. The greed of banks, mortgage brokers and Re agents have brought us to this problem in the housing markets. The only other people to blame is the unwitting home buyer who has placed all their professional angst on the “professionals” who have used that positionon on all to bend them over the home buying desk! Enough said?????????

Comment on Walkaway:

The House: 300K McMansion-
Lot Size: Same as house footprint-
The Buyers: Joe and Joan Twobitmillionaire and family-
Occupation: Countersales, Wendy’s and McDonalds–
Income each: Joe-7.50 per hour/ Joan-7.15 per hour.
Savings: Nada

Should they walk a way or run a way? NONE OF THE TWO–THEY SHOULD TAKE AN UNDERSTANDABLE MATH CLASS!!!!!!!!!!!!!!!!!!!

whqt are people to do the subprime companies knew what was going to happen and the are all owned by banks like boa. and insurance companies read comment about katrina homes i was there the developers were there before no pay insurance companies many of the developers are owned by boa, state farm,allstate they did every thing they could so they did not have to pay and condo developers that boa and insurance companies own could move in and get property for nothing then sell units for millions not caring about the people that were forced from there homes or concrete slabs.

Mortgage companies are so outrageous in their fees and interest, and they are pretty inflexible for those who run into trouble. If you’re going to lose your house anyway because you know for sure you won’t be able to make the higher payment, then why throw more money at the mortgage company? Walk away. At this point, any decent roof over one’s head, a warm meal on the table, clothes on the back and a bed to sleep in is all you need to survive.

People who “buy ” a property with a no money down, interest only loan are glorified RENTERS not homeowners.

What is being advocated here is a prelude to anarchy. It is a lesson in cause and effect. A lesson in the economic cycle. A lesson in what happens when the ignorant become greedy and are convinced they are worthy of a short cut. Convinced they are deserving what they covet. The line, “there’s a sucker born everyday” has been around A LONG TIME. Now, simple math and the demise of natural selection amongst human beings has brought us to a very historical moment: THE SUCKERS ARE BECOMING THE MAJORITY. This article is kind of a proof of this hypothesis. The media always panders to the majority. If enough people walk away from the system of trust built into our financial system, it will be crippling. Revolutionary, even. It will make for very interesting T.V. Ultimately, we live in a house of cards. Do you think you have money in your pocket? You don’t. It’s PAPER. It’s only money if we ALL believe it is. Go ahead and walk away. Let’s see how deep the rabbit hole goes.

I have an adjustable rate loan that will soon rise. So, I started to talk with mortgage lenders about getting a new fixed rate and every one of them, I mean EVERY ONE OF THEM, would only talk to me if I raised my loan amount! Evidently having $120,000 first and only mortgage isn’t enough to underwrite. One lender said “your house is worth about $330,000, you can take another $100,000 to buy a new car, take vacations, etc….”

So, I asked each if they would personally cover my loan if I did it…you can guess what they said.

A lot of people bought expensive homes that were over priced and over appraised. They fell for the ultimate ponzi scheme when in reality, the truth was out there via mail or the web explaining this deception. Yet the stupid people had to feed their instant gradification (feeling rich) at the same time going broke making others richer – “Stupid Americans”

It is OK because the real property is collateral for the mortgage. If the bank was willing to lend on the basis of an inflated appraisal (and I think many were treating the process as pro forma and not really assessing value), they are the chump in this picture.

so many people knock others for walking away from a home, we walked away and cried my eyes out while doing it, my husband and i both worked had a good morgage,my dream house, then i became sick and lost my job a 16.00 an hour job, we tried so hard to keep our house didnt even get my sons graduation pictures we needed it for the house tried to get help from the bank that didnt work because ther were going to make us current but our payments went from 1200 a month to 1450 a month(how does that help) we tried but couldnt do it, we could make the 1200 a month it was the behind amount we were having proplems with we asked to put those pmts at the back and was told no. so our house was forclosed on we paid 140.000 the sold it for 100.000 i dont understant that

I find it amusing that so many here are concerned with what foreclosures will do to house prices. As I see it, homeowners are in one of three categories:

1. You bought an overpriced house recently and will be underwater soon if you’re not already. I’m sorry but you made a very bad decision. Just a little common sense should have left you concluding that home prices were extremely overvalued.

2. You bought a house years ago, made a ton of money as the house tripled in value in a few years, and chose to use your house as an ATM. Now it’s time to pay back some of that money you took out. Sorry, no sympathy here.

3. You bought a house years ago, made tons off of it, and are sitting on a lot of equity. Great! But don’t think that you deserve every penny you had at the peak. It was a speculative manic bubble.

I know homeowners would love to get rich off their house but historically low affordability is not in this country’s best interest. Our children and grandchildren will need to own a house someday. A country that spends all its income on shelter is not a healthy or a productive country.

I don’t think you should be able to just walk out-

The problem with society as I see it is many people buy houses they can’t afford, buy lavish furnishings for that home, take luxurious vacations they can’t afford- They go out to dinner more than they ought as well. The have amazing wardrobes filled with expensive name brands and great shoes- have manicures, massages and pedicures all too often. Then— the bills start coming in and they cannot manage them. Their throats start closing and things become overwhelming very quickly!

I think people should look at WHAT is necessity and what is purely fluff- You do NOT need a flat screen TV, nor that Ipod, that wonderful set of stainless steel appliances and you didn’t need to go to Disney World for the 5th time- You need to pay your bills!

I am a 33 year old woman who works in collections for a living (and is always sweet and empathetic but very good at my job!) who has ALWAYS paid her bills on time- paid credit card bills in full and has not a lot of furnishings in her house but frankly doens’t care as long as the bills are paid and the roof is over my family’s head.

… ’nuff said!

I don’t think you should be able to just walk out-

The problem with society as I see it is many people buy houses they can’t afford, buy lavish furnishings for that home, take luxurious vacations they can’t afford- They go out to dinner more than they ought as well. The have amazing wardrobes filled with expensive name brands and great shoes- have manicures, massages and pedicures all too often. Then— the bills start coming in and they cannot manage them. Their throats start closing and things become overwhelming very quickly!

I think people should look at WHAT is necessity and what is purely fluff- You do NOT need a flat screen TV, nor that Ipod, that wonderful set of stainless steel appliances and you didn’t need to go to Disney World for the 5th time- You need to pay your bills!

I am a 33 year old woman who works in collections for a living (and is always sweet and empathetic but very good at my job!) who has ALWAYS paid her bills on time- paid credit card bills in full and has not a lot of furnishings in her house but frankly doens’t care as long as the bills are paid and the roof is over my family’s head.

… ’nuff said!

Everything is going up and it is hard for a working person to make ends meet anymore. After 2l years with the same house insurance company they decided to leave Florida and I now have to face finding another, which i’m sure will jack up the prices. I put my house on the market 6 months ago and have dropped the price over 30,000 within that time. Banks lent to people that were “sub-prime” and that created one of the problems we are facing now. People are still afraid to buy even when the interest rates have gone down. As far as people going into foreclosure – yes – the banks should try to help them. These people aren’t slugs they are hard working people facing hard times.

No, you don’t walk away from your obligation, unless there is no other choice. Unfortunately that is easier said than done. Those “speculators” who wanted to buy and sale for profit during this boom time, should have known the risk they were taking. These too good to be true loans should have sent red flags to everyone.

Don’t worry…Bill in Houston will get his.

Hey Bill, remember the 80s when oil prices dropped to $10 a barrel? Were you there? I don’t see the price dropping that low but the Saudis can open the spigot at any time.

That’s when you’ll be singing the blues. Its happened more than once. You should know better. I was there. Those were some dark days.

Getting mortgage inorder to purchase Real Estate is a business transaction
that based on rule and regulation. bussiness transaction is often for securing the interest of the parties involved and should be proceed as such.

It is a well known fact that in the business world, big fish always swallow
the small fish at every opertunity it can. So go ahead and take care of the family first even if you have to send in the house keys.

You made a choice you signed on the dotted line to buy a home you could not afford. It’s so irresponsible to walk away. Not only that but after you move on the whole community suffers with empty homes sitting with no air ,green pools and knee high grass or no grass left. Who would want to buy in a comunity like that.Not me this whole thing is a real shame for new buyers also .

I think some people might of been duped by some devious mortgage companies but a majority were just biting off more than they can chew. I saw young kids buying new homes. Whatever happened to a starter home? I hope many of these now “renters” have learned a lesson from living beyond their means…but I doubt it. They won’t read this, they are at Wal-Mart buying crap they don’t need!

A lot of you have posted some very harsh comments, but there are those of us who believed in the system. I lived in my house for over 30 years and after my husband passed found it hard to keep up. We bought a house we could afford and paid the mortgage even as the prices went up (taxes, insurance, mortgage payments) not to mention gas & electric, phone, food and gas to run our automobiles.
Walking away is not easy nor do you walk away and not look back. It is very disheartening to call the lender and try to make arrangements and instead of trying to help you, they raise the payments as a loan modification or loan repayment, more than what you were already struggling to pay. Yes, I walked away, but was able to sell at a short sale and I hope none of you who criticize ever fall into that hole. Throw your stones, but remember, “there but by the grace of God, go I”

Everyone in the mortgage process thought they could make big money from these mortgages. The broker should have required 10% down mortgages to borrowers. The funds which bought the mortgages got greedy also. They knew they could sell them to others higher up the food chain. I say the lenders got what they deserved. Some borrowers bought their houses with no money down; financing sometimes for 110% of the loan; and some loans only required interest to be paid on the mortgage. Everyone thought rising home prices would insure the loans. Everyone got greedy and should suffer their losses.

Never, EVER walk away, predatory lenders i.e. Option One are under the gun of evey attorney general nationwide.

Stick to your plan, keep your home and wait for the upswing in the market to come.

Contact your state’s attorney general’s office to find the appropriate complaints forms to file against predatory lenders.

Force the greed out of these eels and make them restructure your loan.

There is not a court in the nation that will take their side.

Anyone considering joining a national class action suit against Option One and has a viable complaint, please email me at riverplans@aol.com and leave me some contact info.

I am currently in the process of seeking qualified attorneys nationwide
to file suit. Look for us soon at OOMCAUS.COM.

(Option One Mortgage Class Action U.S.)

Also, any attorneys reading this and want to take part, email me at the above address.

I totally agree with Lani. Banks and lenders created this mess. We will see alot of mortgage companies going belly up along with a lot of hard working families. Do any realtors reading this board feel the housing market will ever stabalize ?

I’m with you Beth from Cape Coral. I too am a very responsible and organized individual. I hate to pay any bills late and usually pay my bills 99.999% on time. I’m a good citizen who works hard and pays my taxes. I too have just choosen this month to stop my mortgage payments because for the past 12 months I’ve been struggling and using my savings to help me pay for my mortgage. I tried to stick it out till my savings is all done. I have even applied for a few part-time weekend jobs to make more money, but have not heard back from any employers yet. I was tricked into a arm loan by a very slick and clever loan officer who only gave me the “good” info about the arm loan and not any other details. When I asked, he would sidetrack my questions. I’m not a real estate expert and so I got taken advantage of. The loan officer made $10,000.00 when he conned me into refinancing. I hope all of you who are giving homeowners a hard time, need to remember that each situation is different. My home is not new and is just average, needing some repairs and updates. It’s a small home and nothing fancy or large. I don’t drive luxury cars or wear brand name clothing.

Since when do we not have to take responsibility for our decisions. This an epedimic of consumers attempting to hedge money they didn’t have and getting caught in a changing market.

I think that it a great idea to walk away. The mortgage companies lie by telling you that they want to work with you. My mortgage company didn’t try to work with me at all. So instead of lowering payments and letting me stay in the house, they foreclosed on the house and if they sell the house for what they have it listed for they will have taken a loss of over $75,000. Because of there greed, we both lost. If they decide to sue for the difference, they get a judgement that is unenforceable. Again, no winners.

Lets see Joe Six Pack makes 1600 a month and wants to get a mortgage for 2000 per month. He has what he thinks is an amazing intellectual thought> I know what I will do. I will take out an IO because I cant afford a fixed mortgage with the lowest rates in 40 years. Then when my dream of making 2000 per month occurs I will be able to pay the mortgage. One mistake I forgot my basic living expenses. No problem I can just live for today get my house and worry about who will bail me out for my stupidity later. WRONG MORON TIME TO PAY UP OR SHUT UP.
Boo Hoo we need Obama and the Democrats to come to the rescue of victim nation on the backs of the W. middle class

yea well when a 1200sq ft house cost’s 450′000 run away

banks did this they gave out loans like chicken nuggets & made home prices skyrocket. they had to know the suckers were gonna run out sooner than later?? house in 99′$85′000 same house in 2002 $419.000?? ha’ha’ banks did this let em’ rott

Predatory lenders went out of control in the last 3 years, allowing owners to get in way over their head. I think this will sort itself out in the next 12 months. The old saying “Only the strong survive” is true in this instance. The number of lenders will be way down by December, and rightfully so.

You pathetic deadbeats sound like Illegal Aliens. You want your mortgage for free your healthcare for free your schooling for free all while not paying. Let the middle class subsidize your welfare lifestyle while you crack a Forty and laugh.

70% of foreclosed mortgage applications had flagrant lies and misrepresentation of income. 40% OF THE FORECLOSURES WERE FROM PEOPLE WHO MISREPRESENTED THE FACT THAT THEY WERE LIVING IN THE HOUSE OR THAT THIS HOUSE WAS THEIR PRIMARY RESIDENCE WHEN IT WAS NOT.Sound familiar Beth from Florida.
Maybe you will have to give up a house or 2 from your bet. Boo hoo you and Obama looking for another hand out from responsible people.The miidle class has been squeezed from irresponsible people like you. I have already given enough of my hard earned dollars to support social welfare for morons like you.

The time to “WALK AWAY” is when the lender will NOT work with you. The last time this happened the Savings & Loan companies refused to “work with” the owners and when the owners were kicked out the Savings & Loans Sold the property to new folks at reduced price but new owners could not afford the electric bills etc that went with this “wonderful below market Buy” and they then defaulted and Savings & Loans got property back again … AND MADE MONEY via US the TAX-PAYERS!
ALL this is a super CON Game by many lenders. Find a specific lawyer that KNOWS and you will learn some tricks you can use to level the playing field!

Some times, that’s all you can do. Been there, done that. Either that or that. There was NO other choice.

It is never ok to walk away. What is it with this country people can make bad/stupid decisions and walk away from thier responsibilities. The banks should go after them and make them pay big. The banks were irresponsible, however the ultimate responsibility is with the home buyer not the bank. The Gov. is not your daddy and niether is your bank.

I would never dream of walking away but as my mortgage rate increased and its squeezing the life out of my family, I might just have to. My bank screwed me on a refinance and won’t take responsibility for their part. In the middle of all this mess, I was diagnosed with breast cancer, so I was forced to focus on saving my life and not saving my home…Sometimes I think walking away will get me the rest I need to heal from my cancer. If I walk away, I will be able to save much more money to help my children with college expenses…

It is never okay to walk away from your responsibilities and obligations. I definitely know your credit report would agree with me. If you have found reason to move, be proactive, hire a Realtor and exhaust their resources. There are more options out there than you’d expect.

It is never okay to walk away from your responsibilities and obligations. I definitely know your credit report would agree with me. If you have found reason to move, be proactive, hire a Realtor and exhaust their resources. There are more options out there than you’d expect.

Let’s face it folks…..you can blame the lenders, realtors and anyone else you want but the fact remains that many people got greedy and decided they couldn’t lose by owning real estate. Where have they been. It has been reported and said for more than 3 years that we were in a real estate bubble that would eventually explode. People just didn’t want to listen to reasonable arguments and kept buying until the brick wall fell. Now these same people are crying because they made a bad decision.
Investing in anything involves risk so if you’re not willing to accept mistakes and possible losses, what in the world were you doing buying real estate?
Count me as a NO for those who say we need to bail these people out. If this deflation of the bubble runs its course, price will finally come down to earth again so the average Jill and Joe will be able to afford a home again with reasonable payments.

Well, I bought a one-bedroom condo when I divorced. 10 years later, it has gone up in “value” on paper, that is. I’ve remarried and moved away and it has been for sale for almost two years. Month after month, any profit I may have realized, gets spent on mortgage, condo fees and taxes. YOU TELL ME how long I should wait before throwing up my hands in disgust and failure.

This is a perfect example of using real estate as speculation. You win some, you lose some. That’s the chance you take. Sounds like this guy didn’t bother to step back and say to himself
” what if this doesn’t work out”.

Now, what does this guy want us to do?

Bail him out!!!

Yes a real mess! People are just “frazzled” WIth no hope within! Walk away?? B/K ? F/C ? So many negative options. I found a site which tries to, help borrowers recover,
http://WWW.LOANCOMPLIANCEADVISORYGROUP.COM CALL THEM ! NO STRINGS ATTACHED!!

I personally have no sympathy for anyone who got themselves into this mess. To be so ignorant to think house values would forever rise is naive. Buying a house is an investment and I believe everyone thought this was some cheap easy way to make some money. I am so glad to see people taking it on the chin and after reading this article and seeing that some people just walk away from their mortgages, I think that is simply pathetic and a cowards way out. People wanted to live the American Dream without putting in the work and effort. How about we try and put some equity into our house? Why in the world would you buy a house and put no money down and have an ARM? I just hope everyone’s greed and ignorance doesn’t tank this economy. Hopefully we all learn a valuable lesson and stop trying to shortcut our way to success.

Although I can’t totally condone the home owner who jsut “walks away”, I believe the mortgage holders deserve to be left holding the bag when the greed prompted them to loan money to people who did not have the means to repay it.

We foreclosed on our home and it was our only option after seeking help from every source there was.

We also were told like someone else who posted that we weren’t far enough behind on payments.

So when you ask for help because you can see where it is going, and you try to do the right thing, they won’t help you.

Now my parents passed away and I was left there 50 yr old home and all the bills that go along with it. It needs lots of work and updating to even think about selling it.

It is in another state so moving into it isn’t an option either.

We are going to try to rent it out but have to put some work into it that we can’t afford.

My friend has a beautiful hobby farm on 5 acres that has been on the market for 4 months now without ONE person looking at it. It is in perfect condition and priced to sell. With paying the mortage for 3 months as an incentive.

Not one looker!!

Yes, walk away as fast as you can! Don’t feel sorry for the greedy lending institutions either. The government with idiots like Hillary in charge will bail the banks out. They will say they are helping home owners-but, it will do nothing for home owners and everything for the banks. What should happen is that every loan that was made in a preditory fashion should be forgiven and the banks should have to eat the loans. Same thing for the credit card companies. That and only that would put a stop to the greedy free-for-all that the banking and credit industries have been hoisting upon us for decades. I respect a drug dealer more than I respect the banking and credit industry.

In 2004 everyone’s equity went thru the roof here in Vegas. Now the adjustment is well underway. Perhaps it was bad choices and unwise decisions by some causing us all to suffer. Even so, as a humble investor I will look for some good deals and try very hard to help people out. I know it as part of my purpose for being on earth, why I was given this tremendous gift of life. Hey Bill in Houston, even thinking of people like you I equate to teaching pigs to sing – ” it’s a tremendous waste of time and it really annoys the pigs”.

RE: Henry, Las Vegas, NV

You should be ashamed!
You said, “To For all of you who feel that people should not just
walk away I say why don’t you put your money where your mouth is and start buying
houses so that others do not have to walk away.”
Well, here it is: I am a 40 year old male who has never drank, used drugs or
been in trouble with the law. I have been married to the same woman for 17 years
and we have two children.
Now, I had 2 massive heart attacks 3-1/2 years ago. I have been offered disability
but choose not to because as long as I can move, I can work.
None of my vehicles are worth more than $1,000. Only ONE currently runs.
I own NOTHING of value.
I expect NO-ONE to pay my bills OR my house payment. We WORK,
and we never have enough to pay all of the bills. At least every other month
our mortgage lender threatens to take our home due to lack of payments.
You also said, “It really bothers me that there are so many of you
holier than thou people that pass judgements on others when you have no clue
at to the situation that others are in. You think that everyone who took a chance
and got a subprime loan should have read the terms more closely.” I
am not at all holier than thou and believe me, I know the situation that others
are in and it is really sad. But I agreed to pay regardless. If I wanted the
option to bail if I could no longer afford the payments, I should have had it
put into the contract. However, I did not.
I honor my word, which is my bond, even if I CAN’T afford it. I am not at all holier than thou and believe me, I know the situation that others are in and it is really sad. But I agreed to pay regardless. If I wanted the option to bail if I could no longer afford the payments, I should have had it put into the contract. However, I did not. I honor my word, which is my bond, even if I CAN’T afford it.

It is never OK to walk away. If you can’t make the payments then file bankruptcy. Remember who signed the loan papers to begin with. You can’t blame others for your own stupidity.

Oh yea, my family has decided to elect for a short sale and if not we’ve accepted the possibility of a foreclosure. We’re not our baby boomer parents generation who picked a homestead and hunkered down. We are GenXers and EchoBoomers, we can certainly pay our mortgage but have become seriously disillusioned at the notion of dumping $5K a month into a home that is now upside down to the tune of $150K!

The home loan was only taken out under my husband’s name and I’ve got strong credit. Who cares if we get foreclosed on? We’re liquid, we’ve been saving the mortgage that we would have been paying since October, and if we choose to buy a next house- I sincerely doubt we’d get turned down by any lender who is looking at our down payment and my credit score.

These subprime and prime lenders who created this fiasco across our nation should get to deal with the repercussions right where it hurts, their pockets. As far as my family is concerned we’re completely debt free and back to investing our money into something that will return, not plummet. Take that IndyMac!

In the case of David the Hancock Park home buyer it is not ok to walk. Hancock Pk is an exclusive L.A. area. Historically many socialites and in recent years even the mayors mansion(which was donated) are located in this part of town. If anyone walks it should be the buyers who were simply trying to buy a home for their family to live in and were misinformed or naive with respect to what they could really afford and are in over their head – who otherwise might not be able to feed their families. Not the greedy flippers. This will cost us big.

The one million dollar question is “What do you do when you have a $500,000 loan on your house and your neighbor’s bigger and better house gets listed for $300,000?” I wonder how many people will continue to make payments under such circumstances.

After reading many of these, I almost lost site of the question. My short answer is…never walk away from a house or a mortgage. I don’t know about the blame issues, this was not the question posed; I guess there is plenty of blame to go around and it’s a shame that many will be hurt because they were woefully uniformed, taken advantage, lost jobs, got bad advice or just bought at the wrong place and time.

The reasons for Never walking away are many, but the most important is what is it doing to you. Pay what you can, whenever you can. KEEP GOOD RECORDS Even if you go further in the hole, when the loan company tries to foreclose on you, go in and defend yourself. Show the judges what you make, what you paid toward keeping the house.

If it’s rentals you own, raise the rent. Send your tenants letters (subject to leases, contracts, etc.) If you were just speculating and got caught long on houses and short on cash, gosh you are in deep doo doo pal. I suggest selling one of the properties for bargain basement price, to raise enough cash to cover those mortgages until prices recover.

Be active in trying to maintain some control of what happens to your house, even if it foreclosed, ask the bank for an extra 60 days to move out. Or ask them if you can pay rent, until they sell it. Then help them sell it.

READ your mortgage, who knows what provision may lurk to help you. Check your credit rating a the time the mortgage was written and try to determine if you were “sub-primed” when you actually qualified for a regular rate. There is a possible partial recovery angle here, if the bank or broker sold you on a sub prime mortgage, when you qualified for better.

No matter what, don’t walk away, I have read several mortgages cover to cover and in all, when the bank or loan company forecloses, they sell the house, TACK ON THEIR FEES, to maintain it, (if you move out), for the real estate agency they hire to sell it, for all the other selling costs, i.e. termite inspections, lock changes, etc.

I am aware of at least on situation in Indiana in which the house owners decided to “walk away” from a mortgage, the house went for sale and the bank, after deducting it’s mortgage and expenses sent them a check for the overage. Then, the new owner (a speculator) offered to rent them the home until he could find a buyer. So, the moral here is “DON’T GIVE UP”

If you give up and just “walk away” you will be sorry, both mentally and financially. After all, this crisis will pass, people will always need places to live. More reasonable pricing and appreciation on houses should give working people who have saved for a down payment some affordable opportunities.

When these folks work their way back into the market, they will start out with more equity in the house and speculators will be largely eliminated by tighter mortgage standards.

Its simple Dudes and Dudettes. You paid too much dinero for su casa. Gotta go, surfs up, need to catch a wave.

It is never okay to “Walk Away”. Once you reach a point in life when you are ready to become a homeowner, you are expected to take on certain responsibilites. The first thing that comes to my mind about the comments of “David” is “when you play with fire, you gonna get burned”. Meaning, don’t buy the house if you cannot afford the fully ammortized payment. When you ride a wave, eventually you will fall. No one was complaining when they were buying housing and selling them for huge profits shortly thereafter but now that values have fallen some of these same people are walking away. In my opinion, anyone walking away from a property they owned as investment property or for speculative reasons, should be strip of all assets in an attempt to help recoup lender losses. On the other hand, for the unfortunate primary homeowners who are facing troubles because they are in a mortgage they did not understand, my heart goes out to them.

Buyers like myself cannot be blamed for being irresponsible if forced to walk awaym”

Kevin is unhappy Nevada dude, but gotta go, surfs up dude. Kevin cheer up and buy a surf board.

Posted By Sheila Horne, Newport Beach, Ca. : February 6, 2008 8:24 pm

“I say f*&% the house, the lender/banks that sold us the joke of a loan and good luck to the people that buy the bs of the American dream”

Sheila is unhappy Californian, gotta go, surfs up dude. Sheila cheer up and buy a surf board.

Posted By Kevin, Oceanside, CA : February 6, 2008 8:29 pm

Kevin, you are an unhappy Californian Dude. Gotta go, surfs up, laters

Posted By Kelvin Chung, Las Vegas, NV : February 6, 2008 8:31 pm

Chung, Banks love to forclose on people who put 200K down payment. They also like to forclose on people named Chung. Good luck Chung and happy new year.

Posted By Bill, RPV, California : February 6, 2008 8:35 pm

Bill the IRS is forgiving this difference, so no tax. Its a new law, guess you missed it.

Right after you hire a lawyer to review your mortgage contract and right before you sign up for a loan you can’t afford.

Most people that find themselves in this predicament to simply walk away from their homes and their mortgages are just Good People, with Bad Loans. Unfortunately, they walk away because they do not know that there are companies out there that can help them. Companies that can help stop a lot of unnecessary foreclosures from even happening.
ARMaudits.com provides relief to subprime mortgage holders who were victims of predatory lending.
They examine consumer mortgage loan documents for violations of consumer protection statutes such as the Truth in Lending Act, Equal Credit Opt. Act, RESPA, inter alia and for fraud, misrepresentation, breach of contract,
unconscionability and claims under other theories of law. Out of the 100s and 100s of documents we audited,
we ALWAYS find violations and irregularities that warrant more investigation. That means that the lenders did not do their homework before issuing the loans.
Homeowners were not provided disclosures that reflected the true nature of the cost of the credit, nor the negative aspects of the loan to the extent that an applicant would have conscious awareness. A lot of these violations may even give the borrower the
RIGHT TO RESCIND their loan. Their main focus is to keep good people with bad loans in their homes. They focus on getting that sub prime borrower a new prime fixed rate loan as part of
damage settlements.
If you feel you were victim to deceptive lending practices, you have options. Don’t just
walk away, fight back. Visit ARMaudits.com http://www.armaudits.com

I’m a realtor. I made a lot of money in commissions. I paid off my house. Get with the program, pay off yours.

Posted By Henry, Las Vegas, NV : February 6, 2008 8:37 pm

you paid too much for your house and you are angry.

Posted By Carolina Monti, San Diego, CA : February 6, 2008 8:38 pm

U should have been nicer to your husband.

I agree with the comments from people who are fortunate and are not having financial problems, Help others that are! You get a tax break too. My son is twelve now. He was born with a bad heart, had three open heart surgeries by the time he was eight months old. Numerous procedures to save his life and more open heart surgeries. Then to top it off he was dignosed with a rare immune defect that is killing him very slowly. Well he decided that he was done feeling like crap and tried to take his own life. My daughter is 16 and has suffered from asthma all her life and now was diagnosed with endometriosis. I work 70 hours a week my husband has three jobs and we are sinking fast. We have a fixed rate and now we can’t afford to eat. But we pay our mortgage, it may be late but we pay it. I will not walk away, I will have to forced out of this home that I have worked so hard for. I listen to all these comments and I am appauled at how negative this country is. The government is bringing us down. The rich people are bringing us down. Look at all these reality shows, do you actually watch these rich people! Good example the Kardashions who the hell is raising these horrible kids!! The mom is promoting them even further. Then there are the people who want more attention! My family is falling apart and no one wants to lend a helping hand. I am Indian and my family was kicked off our land, now the tribe is the richest in minnesota. They will give the U of M 12 million for a goddam stadium but won’t help a family in need. I hope all the people including the government get whats coming to them. I hope they see what it is like to suffer. Don’t feel bad if you have to walk away because of illness or job loss. But I hope the people who flip houses for money and bitch when it doesn’t go there way get what’s coming to them. Too bad. Don’t judge until you have actually had something truely out of your control happen to you.

And Hillary Clinton wants $30 billion dollars of your tax money to bail these people out. At least Obama only wants $10 billion.

Well I’m asking what would you do in my sitution. My wife had health issues and couldn’t work for a year and 1/2 and raise a newborn. But I managed to pay all bills still had to struggle to eat month to month. Now She is working to help now and everything is in my name soley, not hers. So my problem is that this was my first home and to quilfy was to do an ARM for 3 years and its up now. The payment went from $1250 to $1700 for 6 months then go up again. Now I’m trying to refi and very difficult because of low market but I owe $197000 and worth $215000 according to mortage companies trying to refi but all want to give 30 yr with first 10 yrs interest only. I’m not crazy. I have good credit but what do I do now. I know a house is a long hual investment but I cant afford a payment thats gonna keep raising and banks dont want to help. So does this make me a bad person to walk away when I’m trying to refi but cant get help from lenders. Need Advise not scolding from others that why I’m asking what to do?

Just got finished loading all my high end possessions into the U-Haul truck and am ready to close the door for the final time on my soon to be auctioned McMansion that I never really thought I could afford. Life is good. Nicce furniture, big screen LCD TV’s and a sweet $60K SUV — all purchased on my HELOC. Both of my mortgages total more than $200K than I could sell my house for today. Never thought I could live so well and just walk away from my debts! Got to love the American way. Will have to rough it by renting for a few years, but I’ll be at it again as soon as some stupid bank will give me 100% financing and then make it so easy to get more money but taking out equity loans. Did I mention that I have a nice little nest egg from the HELOC money I didn’t spend on frivolous things. It just doesn’t get any better than this! Just hope they get my new address correct when they’re ready to send me the $600 in a few months!

I really think now is the best time to walk out of your mortgage if your going to do it. President Bush is giving so much money for mortgages and of course its not helping the people who need help its helping mortgage Co. who gave bogus home loans to people. The split loans with the high interest rates, and now that their balloon mortgages are due people are stuck. Get out now when you know everyones having problems that way they know something is truly up. If you think i am wrong then you need to wake up cause this is another issue of Corporate America hurting the American People.

God, what has happened to this great country? I cannot believe there are people posting here who actually stipulate walking out on their obligations, or try to blame everything except their own stupid actions for their ills. And as if thats not bad enough, we could quite possibly be facing an socialist liberal in the white house (take your pick). Oh yes, and Rich from Middletown Ct. – there is absolutely nothing wrong with being (filthy) rich. In fact, I can tell you it is positively wonderful, thank you. It makes sleeping at night all the better.

I keep reading all this nonsense about how the realtors and banks are so bad. Some people say they were lied to. Markets go up, markets go down. The market goes down and now it is very convenient to say we were lied to and that the banks were greedy. None of these people have any contracts that say the house will continue to go up every year. Those who cry need to man up and take responsibility for their own actions and stop being cowards and blaming everyone else. Every and all highly leveraged transaction is dangerious.

This is when it is ok to walk away. If you have had your home on the market and it doesn’t sell and you work with your Mortgage Co to try a short sale and they refuse your offers. If you have a financial hardship beyond your ability to fix it usually medical. When a Deed in Lieu fails. Then you no other recourse. However, keep up on all of your other debts and keep your home in broom clean condition.

The lenders need to tighten guidelines even further!!!
Got a foreclosure? Then you are a renter for the next 10 years!!!
I get calls all of the time(I am a loan officer) from people who walk away from their properties and want to buy again. These people make me sick.

It’s always okay to walk away. Your mortgage is simply a contract and it’s a perfectly valid decision to break the contract per its terms. The bank gets the home and you deal with the terms and consequences of the broken contract.

Since many regions of the country will not see 2005 prices again until 2015 or later, many people are in the position where it is a more prudent financial decision to break their contract and move into a rental. The contract with your bank and the laws in your state are there for a reason. This is what you and your bank live by when you make the decision that is in your best interest.

There is no debtors prison in America. Walking away is simply a financial decision, granted it is a big one.

I would walk away. My health is more important than the stress of creditors hounding me everyday.

Shouldn’t you be able to keep some of your paycheck for fun things? If your mortgage payment is $5,000 a month, and you weren’t able to pay it, then next month you owe $10,000. Awwwk!

Do your creditors really care about you? You owe your family; if you die from stress, you shortchanged your family.

I’m just so sorry that the lenders with exorbitant interest rates (Option ARMS, credit card default rates of 31%) are getting their just deserts. It breaks my heart (sarcasm).

Everyone is just feasting on your wallet (or purse).

You are going to see a lot of buyers remorse out there, even for the people snapping up what they think are bargains today. There is a whole lot of downside still, through 2009 and 2010.

I am going to enjoy seeing the spin Hillary, Obama, McCain, Huckabee, and Romney put on this mortgage meltdown.

Everyone is pointing fingers. But greed has to be allocated to cities and counties as well.

Your tax-gouging, liberal-spending county supervisors love the inflated property taxes they get from you. Your city and county planning commissions and city councils/county supervisors added to the cost of the home demanding extra incentives, like public art, or a fire truck for the city, or for protecting the wart-billed snabblypuss.

could almost make a tune: greed, greed, everywhere and not and not a soul in sight…

The businesses took the risk. Let them eat it. Remember, they factored in risk of losses when they gave you the interest rate.

If you had less than 20% down, didn’t the lenders force you to pay for PMI (Private Mortgage Insurance)? So if you walk, aren’t these lenders going after the PMI folks for the money?

I’m thinking the fools in government will try to bail out the homeowners but will only wind up bailing out the banks and lenders.

Remember how your sweet Congress bailed out the credit card companies by passing the 2005 bankruptcy reform act, which made it more difficult for you, the consumer, to file for bankruptcy.

Can you really trust Congress? Remember, it is the Congress who created the IRS. It is the job of the Congress to rule the IRS. If Congress loved you, why do they keep raising taxes? Why do they support illegal immigrants with your tax dollar?

If Congress really cared about you, why does the IRS have such an odious record of being nasty and inflexible? I’m thinking the Congress is afraid of the IRS.

The sad part to this mortgage meltdown story is that it affects everyone. Everyone’s home in the US went up with false demand created by allowing everyone to buy a home. Now everyone perceives a loss with values less than the phony highs of 2006.

Someone do the numbers. How much equity was lost from all the homes across the US from the phony high prices of 2006?

Smart money sold their homes in 2006 or earlier. Or they got into a contract with Dubai like Bill Clinton and made millions.

Folks, you ain’t seen the worst. 2008 is going to be a disaster. Prices are only going to go lower. So flushing money down the drain that could be used for food, clothing, and affordable rent doesn’t make financial sense.

Shouldn’t you be able to keep some of your paycheck for fun things? If your mortgage payment is $5,000 a month, and you weren’t able to pay it, then next month you owe $10,000. Awwwk!

Do your creditors really care about you? You owe your family; if you die from stress, you shortchanged your family.

I’m just so sorry that the lenders with exorbitant interest rates (Option ARMS, credit card default rates of 31%) are getting their just deserts. It breaks my heart (sarcasm).

Everyone is just feasting on your wallet (or purse).

You are going to see a lot of buyers remorse out there, even for the people snapping up what they think are bargains today. There is a whole lot of downside still, through 2009 and 2010.

I am going to enjoy seeing the spin Hillary, Obama, McCain, Huckabee, and Romney put on this mortgage meltdown.

Everyone is pointing fingers. But greed has to be allocated to cities and counties as well.

Your tax-gouging, liberal-spending county supervisors love the inflated property taxes they get from you. Your city and county planning commissions and city councils/county supervisors added to the cost of the home demanding extra incentives, like public art, or a fire truck for the city, or for protecting the wart-billed snabblypuss.

could almost make a tune: greed, greed, everywhere and not and not a soul in sight…

The businesses took the risk. Let them eat it. Remember, they factored in risk of losses when they gave you the interest rate.

If you had less than 20% down, didn’t the lenders force you to pay for PMI (Private Mortgage Insurance)? So if you walk, aren’t these lenders going after the PMI folks for the money?

I’m thinking the fools in government will try to bail out the homeowners but will only wind up bailing out the banks and lenders.

Remember how your sweet Congress bailed out the credit card companies by passing the 2005 bankruptcy reform act, which made it more difficult for you, the consumer, to file for bankruptcy.

Remember, it is the Congress who rules the IRS. If these bozos in Congress loved you, why do they keep raising taxes? If Congress really cared about you, why does the IRS have such an odious record of being nasty and inflexible? I’m thinking the Congress is afraid of the IRS.

The sad part to this story is that it affects everyone. Everyone’s home in the US went up with false demand created by allowing everyone to buy a home. Now everyone perceives a loss with values less than the phony highs of 2006.

Someone do the numbers. How much equity was lost from all the homes across the US from the phony high prices of 2006?

Smart money sold their homes in 2006 or earlier. Or they got into a contract with Dubai like Bill Clinton and made millions.

Folks, you ain’t seen the worst. 2008 is going to be a disaster. Prices are only going to go lower. So flushing money down the drain on a mortgage that is killing you doesn’t make sense. That money could be used for food, clothing, and affordable rent.

Yep – It’s time to “walk away” from this forum before I vomit all over my keyboard. I guess I just don’t understand. I must have been raised differently.

I can sympathize and even understand people walking away who’ve had some sort of life event preventing them from paying their mortgage. To me that scenario doesn’t apply here. This is from the inability to pay. I’m taking issue with those who CHOOSE not to pay, despite having the means. These people would rather walk away from their home than walk away from their lavish personal effects. Vanity rules in their world. This same person would destroy a lifelong friendship over an unpaid $5 loan. They are the only one’s who’ve been wronged in life, and they can do no wrong.

Someone suggested the banks pay back their profits? I’m pretty sure that takes the award for dumbest comment! I suppose no business is entitled to make money now. Make sure you scream at the teller the next time you buy a cup of coffee. They’re making money off you for buying that coffee! YOU ARE A VICTIM!

There is nothing more gut-wrenching right now to have a past client call me and say they need to short sale their home. I am fortunate not to have worked with a significant amount of buyers who obtained 100% financing. I’m finding the bulk of these people have pride in their homes, and wish to stay and ride it out.

The problem is, the mortgage servicing companies (which are different from the actual lender/bank) are telling these people to begin a ‘restructuring’ process that can take 30 days. At that point, it could take literally months for the lender/bank to be located so that negotiations may begin to restructure/refinance/freeze the rate on their home. At the height of the market, banks were packaging and selling/re-selling loans on the stock market to investors. To find the company who actually holds the paper on someone’s home quite honestly takes a private investigator in many cases.

Most people don’t have one or two months of income to wait for this process – let alone more. I’m not typically a fan of the federal government stepping in and making blanket policy – but it is absolutely necessary right now. Rates need to be frozen ASAP, and some kind of a fast-track process needs to be put in play for homeowners to keep their homes. No bank wants the keys to anyone’s home right now, and our economy just can’t afford it.

That is the absolute worst idea I have ever heard. There are plenty of lenders and banks that are willing to refinance borrowers. FHA will allow you to go up to 97% rate and term to change your program, as long as you can afford the mortgage. If you are in the position of your value has decreased and you owe more than its worth than either you didnt put enough money down, or you took too much cash out. Its a little bit of everyones fault, the financial institution for having the program to allow people to make minimum payments and then make it adjust and also the borrower for putting themselves in a position to buy a house they can’t afford. Get a second job, tighten your belts, and get by untill things turn around. If you own a home you should know by now the only person thats going to look out for you is YOU. I wouldnt bet on any miracle fix-my-mortgage package. Your best bet is to get yourself out of the mess you got into in the first place. If your in an adjustable rate or know its going to adjust put some money into the mortgae to make room to refinance, also dont wait untill the last couple of minutes. No one knows where there going to be in the next year or two, if you can refinance now and qualify I highly suggest take advantage of it before your credit goes down or you lose your job!

Side note- I think its funny how CNN.COM’s real estate section has articles about walking away from houses cause of ADJ interest rates when all the advertising for mortgage companies are offering the same adjustable minimum payment programs that put us where we are now!

“Enjoy throwing stones from your glass houses.”

I will. Got a big pile of rocks sitting here in my glass house financed with a fixed 30 year.

to Lyn, New Haven, CT
Sorry about the MS, but you type pretty good with your left hand.

Just to clear the air, I only have one of my $200,000 mortgages that is an interest only adjustable and it happens to be at 5.24%. The rest are fixed. I did not buy into that scheme.
I am only getting burned because of the jump in property values in sw florida and the hurricanes. These 2 things i had NO control over. I don’t see myself as stupid-just someone who could not tell what the future would hold. I would love to hold onto all 5 properties if someone has a way-let me know!

http://www.lvrj.com/business/15306346.html

Banks and business people are walking away, why be the loser who takes the hit.

Lenders did not couse this. It was the investors. The lenders only wrote what the investor would buy.

For More info go to http://www.iprovident.com

Wow. Just goes to show you, there are some stupid people floating around this country.

I believe that lenders have created this mess by allowing 100% financing, however I see that there was a need as home prices skyrocketed and buyers couldn’t catch up saving enough for a downpayment. Catch 22 in a way caused by greed ie: sellers, realtors and buyers bidding above asking price.

I can’t say that if I were in that situation I would walk away or not. I’m too conservative. If I couldn’t afford the home, I wouldn’t buy it, so for me personally, I don’t think so.

I think they should freeze all loans with variable rates for maybe 2 years or refinance them into something they can afford without appraisals. The problem is noone can get out of there loans becaue values have dropped so much.It will come back and if they can hang in there for 5 years we will back in business but borrowers need help. Realtor.

I am a good person and have always paid my bills on time, if not early. We are landlords and were in it for the long haul here in south florida. But as of January 07, everything changed. We have 5 properties, 3 of them rental homes. 1 is our own home, and one is a residential lot. The taxes, and insurance tripled on all three and all of a sudden we are supposed to come up with $50,000 over 3 months to pay these extra costs? Not to mention the jump in our mortgages that have taxes and insurance escrowed.
After doing what all the analysts said-calling “before” you get into trouble, we were told we could not be helped because we weren’t behind in payments. (I could see it heading there but it was like they weren’t believing me.)
Now it’s 4 months later and i have to pick and choose which ones i can afford to pay and still keep food on the table for my family!
Get this-one of the mortgage people said my husband or myself should get a second job?!?!? Well, she should know that my husband works 6 days a week and a total of 60 hours, while i work outside the home for 32 hours, inside the home office managing our home business, AND see that 2 kids are taken to school on time daily, etc. We are actually bringing in MORE money now, but still are dumping it all into mortgages for homes that are worth less than we paid. By the way, only one of our homes is rented-so you can imagine what kind of money we are losing.
No realtor wants to help us list a short sale for fear of not making their full commission, and we have people looking at our homes-wasting our time because they can’t even get loans anyway.
What happens next?? All i know is i can’t be stressed out anymore worrying about my credit score. My family and the home i live in are the most important thing to me, so sad to say but i’m going to have to do the same as alot of good people i know and let the others go. At least I can start saving my money in a sock at home instead of watching it go down the drain!!!

Well, Bill from Houston you sound like the kind of guy we should all avoid. You don’t sound like you have a very happy life.

I am retired, have my home paid in full and living the good life full of love and fun. I would see you on the other side but I fear you will be burning in hell. Tough luck bud.

I have read many of the comments and am disturbed that many people have “a you got what you diserved” attitude when it comes to the borrower. There is every imaginable scenario listed here in these comments from really bad luck to just really bad people. There are always those 10%ers that will take advantage of a situation and get away with it. I think that this country needs to change. Vicky from Stockholm Ca. said it best, we all need shelter and in the future so will are children and are homes were never intended to be an ATM, but the lenders are presenting it that way “use your equity and buy, buy,buy!!!. With that said then why do the people of this country need to pay such high intrest rates on our housing. Our tax money is lent to banks, then back to us at a higher rate so banks can make money off are most basic of needs, a place to live. If we didn’t pay such high interest rates for are housing then we could use that money to purchase goods without needing to borrow money off the equity of our homes, but God forgive me for thinking of people over the needs of a bank to make a profit!!!!! This is a great country, but there needs to be a change for the majority (middle class and below)and not the minority (The rich and the fithy rich)

Why do banks rather have the houses go to foreclose instead of helping the people?I tried to get my lender(wells Fargo) to lower my payment until my work picks up instead of losing my home and they said NO, so I went and with my descent credit bought another house $300,000 cheaper and $2500.00 a month less, you damn right I’m running away from the house that Wells Fargo wouldn’t help, let them get that house back and sell it for $200,000 less than what I paid, that very smart, that’s why banks are losing so much money and crying about it. Screw them, they are getting what they deserve

If it were true that only the irresponsible lenders and idiotic borrowers get hurt when people walk away from their mortgage obligations, then I wouldn’t have a problem with it. However, any fair-minded observer knows that that’s simply not the case. Everyone gets hurt.

Let me give you an analogy:

My car insurance premiums are pretty high, or at least I think they are. They’re high despite the fact that I’ve never been involved in an accident. They’re high despite the fact that I have a spotless driving record without so much as a parking ticket to speak of. In fact, I don’t recall ever having filed a single claim with my insurance company. I also drive a pretty modest and inexpensive vehicle – or at least its modest compared to most of the cars I see parked in driveways in my area.

So why is my car insurance so costly? It’s because I’m paying for the all the driving indiscretions and mistakes of everyone else. I’m paying for all you bad drivers out there. All you lead-footed fools traveling 20 miles-per-hour above the posted speed limit with a cell phone in one hand and a cheeseburger in the other, smacking the kids in the back seat while flying much too fast through a dangerous intersection because you’re one of the many people on the road who thinks that a yellow light means “floor it!”

I’m even paying insurance premiums for people that don’t have car insurance at all (uninsured motorist insurance)!

All you bad drivers out there are the reason my car insurance costs so damn much and will only continue to go up in price, despite the fact that I’m a careful driver.

Similarly, because so many of you mortgage bailers are walking away from your obligations, then the cost of borrowing money will rise for everyone else. Credit will become tighter for everyone, even those that pay their bills on time and have always been a good credit risk.

Also, because the house you’re walking away from will be foreclosed on, then the value of the other properties in your neighborhood will drop even further. This means that those responsible, informed consumers that are still making their payments will take yet another hit while you run off, relatively unscathed, to go move in with mom.

Basically, the same pattern plays out over and over again in almost every situation where everyone is “in it together”. The responsible few pay for the indiscretions of the idiotic masses.

Why? Because, in order to keep the process going, somebody has to pay the bill. It won’t be the idiotic masses (you mortgage bailers) footing the bill because you have neither the inclination nor the money. That leaves the responsible few (me) picking up the tab for all of us.

Merry Christmas – yet again.

Wally

Its simple, really.

This is a pure business decision.

When your REALTOR, your BANK, and WALL STREET screwed you – by fomenting a speculative bubble in real estate which they knew from over 100 years of history could not possibly be sustained, as valuations were DOUBLE historical levels, they didn’t care if YOU got screwed or not.

They only cared if they got PAID.

Well? Why should you look at it any differently?

“Obligation”? “Moral requirement?”

As soon as I see all the profits made by the Wall Street banks AND YOUR REALTOR given back, ok, I’ll agree.

Notice how NONE of the realtors or banks are giving back any of THEIR profits?

Nor will you.

They only suggest that YOU have an obligaiton to ruin YOUR future – for their gain.

Nonsense.

Go get QUALIFIED legal advice and evaluate this exactly as your REALTOR and BANKER did – as a pure business decision.

If the proper pure business decision is that you should walk away, then do so.

Period.

f k the morgage companies, they created this mess themselves and now they must sleep in it. hopefully the garbage gets taken out and the crap thats left can learn a lesson.

I can understand those of you who are upset with the “house flippers” but am having a hard time with your very harsh words for the families affected by this mortgage melt down. Do you really think that those affected saw stars in their eyes and bought what they intentional knew they could not afford. Some of us refinanced into this mess. My home was not out of my price range until a lender told my husband and myself that an adjustable mortgage was the way to go. We could refinance in a couple of years with no problem. Our fault for trusting. Our faulting for believing his “word” was true. We are obviously not the “real estate guros” that you who are berating us affected are. We tried refianancing that did not work due to home values going down. We tried talking to Citifinancial whom we had the loan with. We were informed that they would not work with us because we were current on our payments. I know about the sleepless nights and the “what are we going to do” moments. We ended up walking away from the house and I am glad I did. So for those of you would want to cruxify us “dead beats”. So sorry that we who walked away aren’t as rightous as you. Enjoy throwing stones from your glass houses.

This is probably the single most disgusting, irresponsible article I’ve ever seen. Would this writer also encourage people to sell crack to kids because there’s money to be made?! Wrong is wrong, regardless of how much money you make on the transaction. When you buy a home you are making a commitment to pay the lender for the funds they advanced. For this writer to say a buyer will never recover from falling home prices is ridiculous. Equity is only converted to real money on the day you sell your home. Don’t sell in a down market! I realize some homeowners are trapped in a financial nightmare and are forced to walk away. But to consider walking away just because you can buy a similar home for less? How could our economy possibly support this writer’s suggestions? Personally, I think this writer should be working for a local, smalltown weekly. I expect much more from a national news outlet. Any credibility CNN Money had in my eyes is gone.

Walking away from legal and financial responsiblities…what a message to send to the children/next generation. Some people want it both ways; 1.) becoming a homeowner so they can have an invesment with LONG TERM growth and equity but 2.) when the equity goes down (real estate always has ups and downs) they say thanks to the lender that made the American dream a realty and walk away. In a few years when those same individuals want to buy a home again and cannot because of credit blemishes then they will be first in line saying lenders are too tight and should be more accomodating to a broader range of credit scores. Homeownership in this county is a PRIVILEGE and not a RIGHT.

I have seen this coming for some time now. We as a people have been corrupted from the head down. We have been shown the way, and the way is to say screw the system.

Our nation has already been trashed, the average person is just trying to survive.

Our leadership in government, including and especially George Bush have by their actions given license to us as citizens to also be irresponsible.

Need I list the ways:

George and his leadership team have walked away from:

Fulfilling their duties to serve in the military (Bush in the National Guard, Cheney with multiple deferments).

The corporate-owned Supreme Court walked away from its supposed bedrock belief in States rights to remove Florida’s right to allow the recount to continue so that the actual winner of the 2000 election was allowed to take office.

They walked away from their constitutional duties to protect us from 9/11 when they were warned that an attack was imminent.

They walked away from their official and moral duties not to send soldiers to die and be maimed for a meaningless was that is only making more “terrorists”.

They walked away from New Orleans.

They walked away from the middle class by off-shoring jobs for corporate profits and their stock prices and bonuses.

They walked away from the middle class by cutting taxes in 2001 and 2003 that effectively redistributed over $10 trillion to the top 2% of the super rich.

They walked away from our nation’s reputation as a symbol of hope – now we start pre-emptive wars, we torture, we keep people imprisoned for years without charges or a hearing before a court of law.

Walked away from our constitutional rights to privacy, to obeying the laws already in place for conducting surveillance.

They have walked away from allowing our constitutional government to function as the Founders intended with Congress having equal rights and acting as a check and balance on the Executive.

Walked away from telling the truth.

Walked away from equal protection under the law – pardoning Libby for his felonious behavior.

Walked away from fiscal responsibility. Our government now owes over $9 trillion.

Wants to walk away from the committment to pay retirement benefits to millions who have paid into social security for decades.

I could go on.

We the people don’t exist for this government. Lobbyists and CEOs set policies and make our laws, to their enrichment.

Good Christ people, do you have to be reminded that about 90% of your house payment is interest going to these richest of the rich who have corrupted our nation??

You’d be a fool to pay their interest on their obscene 30 year amortized loans when you could take that $100 or $1500 or $2000 and instead use it to pay down debts you have a realistic chance to see eliminated, like credit cards.

The financial system as we’ve known it is over. We are in meltdown mode. Its a nasty metaphor but a nuclear chain reaction has been detonated and we are the terrorists.

To Bill in Houston,

Is it really possible to take the Mercedes to the “other side”???

What are you smoking you self-righteous joker??

I think “walking away” is another sign of our moral decline. What ever happened to the idea of meeting your obligations? When you sign a contract you are making a promise. What ever happened to keeping your promises?

Taking out a mortgage is a big responsibility and the reason we’re in this mess in the first place is because too many Americans took on more debt than they could afford. They essentially made a promise they had no rational intention of keeping.

From a previous poster:
“CHALLENGE:
I challenge anyone here to actually name a financial institution that posted a loss in 2007 due to mortgage defaults and foreclosures.

They didn’t! Finance remains one of the strongest industries in the country. The loans are structured such that the bank wins either way.”

Are you kidding? The largest financial institution in the U.S. posted over $11 billion in losses for the 4th quarter alone! (Thanks to subprime mortgages) Since then, it’s stock has been cut in half, it’s CEO was fired, and they’re laying off thousands of employee’s while shipping their positions offshore!

This is to all those who bought into the fancy financing and funky terms pushed by banks during the boom: YOU GET WHAT YOU DESERVE. If you can’t afford a starter mansion through regular means (30 or 15yr mortgage) then YOU CAN’T AFFORD IT. You reap what you sow. My wife and I bought a brand new million dollar home in NJ 5yrs ago; the realtor, the bank, and the builder tried to peddle exotic “interest only” loans and other risky crap to get us to purchase more home than we normally could afford. We said no. Now we sit back and watch half the country go into default because of stupidity and greed. Oh, and the value of my home?, Well it hasn’t grown as fast as in the recent past, but its big and spacious – we’ll be here to ride it out. Sane, rational planning ALWAYS wins in the end.

This one is for all of you sheep out there who intend to remain “responsible” and live your little lives hiding behind a minimal mortgage and “safe” investments, retiring one day with no mortgage and just enough to die on.

Opportunity is knocking, answer the door!

I am a landlord with houses and apartments, 100% occupied and getting calls every day now from VERY QUALIFIED renters who no longer have a place to call home. Yes they have income, but are choosing to either wait out the decline or have sent in the chain mail. Yes I do credit and background checks, they are all honest and I verify they have income but horsedung credit. I’ll take the gamble, as long as they show up in their nice SUV bought on equity loans and show me a current pay stub.

Now here is the best part, and you don’t need to stay up late to see this infomercial here it is in plain English. I buy that foreclosed property for 60-70% market value, and rent it back to handsome, hard-working Americans for 200-500/month more than the interest-only payment. Yes I have a day job too, as evidenced by the time stamp here I have the time to do both. How many of these does it take for me to profit INCREDIBLY WELL from this debacle? I’ll tell you I have 23 now and intend to get twice that going over the course of this year, as long as there is chainmail there will be the wolves out here snarfing up the warm carcasses.

To all you sheep, enjoy your early retirement and die with no debt. I’ll see you on the other side, in my Mercedes.

Homeowners must consult with their banks first about other options such as loan modifications, forebearance, payment plans, deferments, etc. Refinance and renting are also good options. Ultimately, one must have a financial difficulty in making the payments before one considers a short sale. The short sale option is far better than just walking away. The new law will allow borrowers to avoid paying taxes on the debt. It is a win win. One must also decide if they can keep the home for the next five years, if they don’t have a have a financial hardship. Perhaps selling is the option or hang on until properties rise again. Real estate should always be considered a long term investment.

Adam Alcaraz
Realtor
Re/Max Real Estate Services
Mission Viejo, Ca
714-658-4147

we are walking away, stopped paying july ‘07 and only now getting the start of foreclosure. We were naive and should not have gotten the loan in the first place, we we basically sold a bunch of lies and now we are giving them lies back…

I THINK BECOUSE OF THE CRISES THE BANK SHOULD HELP OUT IF NEEDED BY NOT RAISING THE INTEREST RATE UNTIL THINGS GET BETTER GIVE THE ORIGANAL LOAN MORE TIME OR REFINANCE IT .. YOU CAN AFFORD ONLY WHAT YOU CAN AFFORD. IF THEY DONT THEN WALK AWAY. THIS IS A SHOCK TO EVERYONE EVEN PEOPLE WHO NORMALLY PAY THIRE BILLS AND HAVE GOOD CREDIT.

For those of you who think that every person that had to walk out on their home of a deadbeat, I really hope that none of you have to experience what my family and I had to go through in the last year. My husband lost his job and though we tried to make it work, we just couldn’t find a job that paid enough to make our bills. We had to foreclose.

To all of those who had to walk away due to a life event, job loss, illness, divorce, I am very sorry.

You people who are upset at those who walk away have it all wrong. I think it’s great they walk away. The more people who walk the away, the cheaper the property values get. That gives us, who can afford it, the opportunity to come in like vultures and pay way less than what the banks want. And no, I don’t feel sorry for the owner that got booted. Heck, the property my wife and I bought cost the 2 banks $150k. The previous owner had no money down and lost the house in less than a year. We came in and swooped it up for almost $100k less than what the previous owner paid. That’s capitalism my friends. I want more and more people to walk away. That will eventually give me another opportunity to buy another one on the cheap. And don’t thinnk I’m alone. All those people who attend those real estate auctions know what I’m talking about. ‘Nuff said.

Prior poster said:
Seriously, walk away. When the bank is unloading your house at a mere fraction of what it was “worth” a few years ago, I’ll buy it and hold onto it. Because a house is an INVESTMENT. Like all investments, it’s value goes up and goes down over the short-term, but over the long-term, it goes up.

Actually, research indicates that real estate on average maintains its value over the long term. The increase in price that you see is simply inflation and nothing more. So, buying a house makes perfect sense if you believe that we’ll be in for a lot of inflation. It makes no sense if you think that we’re in for some deflation.

as an expirienced investor in California, i can understand most angles and points of view. however perspective plays a major factor in decissions made. let me first address all the home owners that are upset due to loss of equity. if you didn’t purchase your home during the market boom or cash out your home then you have not lost anything. equity is an abstract concept, it is immaterial, if you don’t use it you don’t have it. in other words if you never pulled money out of your home does it matter if values are up or down? if anything you could have your home reassessed at a lower value. if you plan to retire sell your home and move away, well obviously you’ll try to sell at a high point in the market.
next i will address those who have bought recently. if your planning to walk away make sure you know what your doing. in california for instance it is considered a trust deed state, what this means is that your loan is secured by the property. in theory if you are foreclosed upon it affects your credit but the bank can’t come after you for the defecit if there is one. in other states like new mexico these are mortgage states, this means that the bank can come after you for whatever defecit there is. i don’t know if bankruptcy will get rid of this debt in these types of state. ask yourself can you really afford to keep this house? if the answer is yes and your family (wife, husband and children) love the house then keep it. if the debt is keeping you up at night and causing problems then walk away. do not feel guilty. don’t let those who are “playing by the rules” make you feel guilty. first you have to know what the rules are. remeber the golden rule “he who has the gold makes the rule”. if the rules say you can walk away then walk away after all those are the rules!
finally i will address the group who has not purchased yet. if you can buy your first home do so make sure you get the best possible deal and educate yourselves on the home buying procedures before actually buying. it is a buyers market right now. what the rates will do in the years to come i don’t think anyone really knows for sure. just don’t get in over your head.
p.s. to all investors well the shopping spree has now begun. happy hunting and good luck. “in the spirit of the olympics let the games begin!”, my personal favorite quote.

SHAME ON THE MORTGAGE AND REAL ESTATE INDUSTRIES………….THEY HAVE ASSISTED IN THE CREATION OF THIS MESS.
(I happen to have a RE License, but do not work as a Realtor) I PLACE THE MAJORITY OF THE BLAME IN THE HANDS OF THE MORTGAGE BROKERS AND REAL ESTATE PROFESSIONALS……THEY SHOULD KNOW BETTER………..THE MARKET ALWAYS FALLS; AND IN ALLOWING THE INCREDIBLE PEAK…..THE VALLEY WILL BE A DEEP CAVERN.

A few thoughts -

My parents went through the Great Depression and impressed upon me never to overextend myself to the point that there was a reomote possibility of losing my house.

Most of the deadbeats that claim it is OK to walk away are from California, which confirms the materialistic stereotype of all Californians.

Financial buyers of mortgages will be so burned from this meltdown that people with bad credit will not be able to get mortgages for a long time. By the way, many employers are now doing credit checks before hiring employees as people with poor credit are higher risks for embezzlement or other dishonest acts.

This whole mess could be fixed by doing one simple thing – force the banks to stop front-loading the interest charges. On a $2000/month principal and interest payment, the bank gets about $1800.

I it was even 50/50, many of these people would feel differently about staying in their current upside-down situations if they had any hope they could pay the debt down in a reasonable time.

As long as the greedy banks keep taking their share first, people will be much more motivated (and wiser) to use their hard earned money to pay down debts with a tangible can-see benefit.

Walk-away and use the $2000/month to pay down the $30,000 in credit card debt. You’ll be debt-free in 15 months.

“It’s so easy to just walk away!” Sounds too good to be true? It is. IN MOST STATES the lender is able to go after other assets and income after the foreclosure. So don’t think that by simply walking away you’re off the hook and done with it. They’ll come after you.

Consumers need to accept fiscal responsibility for their actions rather than dump the problem on the banks. When you sign for a loan, you have the opportunity to read the note, and you have the right to select a broker or retail loan officer you feel comfortable with. We shop around for sweaters, cars, groceries, right? Why not do our part in selecting a trusted advisor who we feel comortable with to handle the largest investment of our lives, our home. There are plenty of great loan agents out there (also plenty of bad ones), so trust your instinct, do a little research, and dont be afraid to ask questions. Let’s get it together people, our credit and our obligation to be fiscally responsible is on us;If you make $100, you can’t spend $150; its quite simple math. Walking away from your house will only put you in a terrible credit situation where you have a beat up FICO score due to rolling late payments, and once you beat up your credit that bad, tell me, who will want to lend to you in the future? And, no, it wont be just a matter of a year or two for someone to come along and say “oh, we can clean that up for you and repair your credit”. It doesn’t work that way and anyone who tells you they can repair the damage on your credit from late payment after late payment is simply lying to you. Be fiscally responsible-Be in Charge of YOU!

Incidentally, there’s a LOT of creative accounting going on in the mortgage business. For example; mortgage lender ‘A’ holds the mortgage on a property and along comes person ‘X’ to ‘buy’ that property. ‘X’- using mortgage lender ‘B,’ pays off the mortgage that lender ‘A’ is holding [giving them a net profit for having held the mortgage - presumably]and lender ‘B’ now holds the new mortgage. Should ‘X’ default / ‘walk away’ from that property lender ‘B’ now owns that property. OK, that property still has value and is an asset. The only true costs to lender ‘B’ are that they have to maintain the property as best they can until they can sell it and pay their borrowing costs until they do so. Even if lender ‘B’ takes a ‘loss’ on the sale, the ‘loss’ is tax-deductible against other revenues / gains from their business. Assume the property has a mortgage of $300,000 and lender ‘B’ eventually sells it for $200,000 {a 1/3rd loss}. OK, they’ve a paper loss {gross} of $100,000. However – and this is a BIG however, that $100,000 wasn’t likely their money to begin with {at least not all of it}. They may have borrowed some or all of that money, in which case they’re out the interest they paid during the period of the loan – less the revenue {mortgage payments, points and closing fees} they did receive. Of course, they can deduct their administrative and actual expenses for selling the property and carry the / write the loss off against other revenues. Therefore, the actual net adjusted ‘loss’ may be fairly minimal – if any, in any given example. Even in the example I’ve laid out here of a gross loss of $100,000, the net result is likely to be far, far less. For the sake of discussion, let’s just say that if 1,000,000 homes were defaulted on with an average loss of an adjusted {net} amount of $30,000 that’d be a total adjusted loss to the mortgage lending industry of $30 billion dollars. Alternatively, those losses will offset tax liabilities for profits. Clearly, the write downs of ‘bad’ mortgages is being overblown {overstated}. Even if we TRIPLE this amount to $90 billion dollars, the write-downs that have taken place dont’ appear to warrant the extreme market reaction that’s taking place. Meanwhile, the Fed {Treasury Dept.} is pumping money into ‘the system’ and banks are being able to carry their risks at far lower costs – to them. Since the spread between what banks borrow money at and what they lend it for is greater now than it has been in years [and don't forget the outrageous interest rates on credit cards, ATM fees, etc, etc that they're still earning]I wouldn’t be passing the hat too quickly for the banks. On the whole, our economy is over-reacting to the mortgage issue as it stands presently and taxpayers are subsidizing the industry {yet again}. Don’t be in a hurry to feel sorry for the mortgage banking industry. They made the risk determinations to lend money to people with no-money-down, with only stated earnings {not documented earnings} and the like. The REAL issue here is when is America going to start a trade policy{s} that doesn’t either ship/outsource formerly and/or possible American jobs overseas; as well as when are we going to confront the OPEC cartel with our own abilities to cartel {price fix} our domestic product – food? Unless and until America wakes up to the reality that it’s a new world economic order, Americans’ standard of living will continue to decline and housing values will correspondingly implode {with fewer people being able to afford homes here}. It’s about the global economy – ’stupid,’ NOT ’sub-prime’ loans! Americans can’t compete with Indian and Chinese workers, well, at least not be able to maintain anything like our former standards of living in the bargain. Remember, our new competitors don’t have to deal with OSHA, make Social Security contributions, Medicare and/or Medicaid contributions, deal with the expenses of an EPA, of retiree health care costs and/or pensions, etc, etc. It’s NOT a level playing field and America had better wake up to the reality immediately. It’s not the Latinos that are talking American jobs. Americans haven’t wanted to wash dishes, perform landscaping funtions, work in kitchens, bus tables, do manual labor of all kinds, etc, for many years. It’s about the new industrial economies in the East – the Sub-continent and Asia. That’s where the manufacturing and service sector jobs are, not in Ohio, Indiana, Michigan, etc, etc, etc. Let’s call this a final wake up call to America. We can either face the realities and deal with ‘em – for the sake of the American people, or, we can continue to import goods and services while we export our future. It IS a choice. Wal-Mart isn’t good for Americans, but, it’s great for the Chinese. Follow the trail of capital and you’ll see that it’s being invested overseas {where currencies are stronger, yields are higher and the costs of doing business are lower. This isn’t rocket-science, it’s global economics 101.

I laugh at the banks, because of there greed, and now there getting screwed. They have been screwing us for years. Look at a typical mortgage, when do you pay all the interest the first 5 to 7 years of the Mortgage. How long do people typically live in a house before they move, 5 to 7 years….
What comes around goes around, I hope the American oil companies and Car Companies are next! Watch Who killed the Electric car? GM and For were so short sited…Now foreign companies are years ahead of them…while Hydrogen cars are decades away…they’ll be the next bankrupt companies….oh and bail them out with my tax dollars…they can go screw themselves..that’s mine and my communities

This is a bunch of Crap! Come on people! Pay for your obligations. You have no excuse. How about selling your brand new car and everything else you have bought in the last 3 yrs. How about getting a 2nd job so you can make your payments. The banks should be able to sue these people for the losses they take. Take some responsibility! Walk away! What the hell is this country turning into! America is better than this!

It is never ok to just walk away. Too many people want a house so bad the will take any loan to get in it. What was the guy in the first part of the story doing buying two house’s in the first place? Everyone needs to remember when you borrow money you need to pay it back. I just lost $15,000 dollars in a business guess what I did? I paid the bank back! I didn’t walk away! I didn’t see how it was the banks fault that I made a bad investment so I paid the debt.

Wow! There sure is a lot of emotion being demonstrated in the replies to this article. And the emotion seems to be coming from those people not directly affected and without a realistic understanding of the complexities associated with the entire subject matter.

For all the complaining, I would agree with some of the assessments being made about the situation and the risk taking of some of the eager borrowers. However – I don’t understand where everyone is getting this idea that we taxpayers are bailing anyone out? There is no government relief for these borrowers. This is a civil matter, left to the banks and Courts in local jurisdictions. These are business transactions – plain and simple – and only parties directly affected are the borrower and lender. I’ll grant you that there is potential collateral damage to the economy – but this effect is actually quite diminished by the time it reaches the rest of the US population.

I also need to point out that this article made some very poor over-generalizations and was oversimplified: Each bankruptcy/foreclosure case is unique and has a specific set of circumstances. Many times, walking away is the right thing to do from a business standpoint. Mortgages are emotional because people like their homes – and families are bonded by their home. But I guarantee you that your bank sees it nothing more than a business matter and business transaction. The other thing that the article completely ignores are the larger economic reasons why people are falling behind – job loss, enormous medical expenses, divorce, the increased cost of living caused by the increases in gas prices. For any human – foreclosure is a lengthy, emotional, and financially damming experience that they try to avoid at all cost. When foreclosure comes in the large majority of cases, it is a last resort.

Let’s all stop the negativity and realize that you probably are more affected by other things than the mortgage fallout. If you really want to take up a noble cause, figure out why gasoline prices are the way they are, or why the middle-class is no longer truly middle anything. No more pouring salt into open wounds with acerbic commentary against those people who have been knocked down to nothing and have had a severe dose of humility served up cold.

I think every.single. person. who did this is an absolute moron no matter what your situation. Here we are, foolish enough to think working hard still matters, trying to save, work hard, use coupons, never going over what we can afford, not using credit, buying a house we can afford with over $20K down, on a fixed 30 year, then selling it, teaching our son the value of working hard when all along these absolute geniuses have really figured it out – DON”T WORK, just let OTHERS PAY FOR YOUR MESS!!!!

That is the way to go. I dont even have to see these people – I already know them. these are the ones with new cars (never buy used, not good enough), newest technology in cell phones and tvs (never mind that I do not have that stuff bc i cant pay CASH for it )and these people do not even know what cash is (cash, what’s that?)

These are folks who just let others bail them out. these are the types of people who will sue McDonald’s ‘ for making them fat’

TAKE RESPONSIBILITY FOR YOUR ACTIONS, AMERICA!!!!

The mortgage meltdown is a result of GREED: on the part of the bankers, realtors, investors and home buyers.
Fuel is being added to the fire by MEDIA who love to report the worst.

I am a landlord, I observed many bad tenants (late rent payers) buying houses. If they don’t respect the rentman, how are they going to respect the bank.

People watch those TV shows about how easy it is to flip that house. What happens when you cant sell the house? They don’t have a TV show called can’t sell the house, now I am the Landlord. Because, if being a landlord was glamorous and the paychecks are huge, everybody would do it. Instead slow and steady is what wins the race.

Greed is what has ruined the housing market.

It’s not wise to walk away and it’s not in the best interest of the bank for the homeowner to abandon the property. Abandoned properties are subject to vandalism and this further reduces the home’s value. Besides, it takes months before the bank will commence a foreclosure action in court and no bank is in a rush to incurr the legal expenses related to a foreclosure. Even after the foreclosure action has commenced it can take additional months for the bank to obtain the proper title required for the auction sale and to schedule the home to be sold at auction. And there’s no guarantee the home will get sold at auction the first time around. The bank holding the mortgage knows more is owed to them than what the home is worth in this down market. It’s a loss to the bank in either scenario so they rather the homeowner upkeep the home. These conditions makes the bank very open to re-negotiating the loan terms.

It appears that the web address in my previous post got the last period in the address, which leads nowhere.Here is the adress for free information on mortgages hope this helps. http://www.iprovident.com

Americans are perhaps the least patient people in the world. Everybody wants things RINGT NOW. Saving is almost a foreign concept to many people. This is why so many people made bad decisions to purchase homes they could not afford, with no money down using loans they could not affords to repay. What ever happened to BUILDING WEALTH? Everybody wants the fancy “bling bling” house and car but they can not afford to either pay their mortgage or fill their gas tank. There is no shame in having less or living modestly. In fact, I believe a modest life style is a sign of responsibility.
To those people that insisted on having everything they want right now: you made your bed. Now shut up and lie in it. Markets go up and down without notice or reason. I do not feel the least bit of sympathy for these people that chose ARM or interest only loans to purchase something they could not afford in the first place. They chose a more risky loan product so that they could buy more flashy stuff and maintain an unaffordable life style. Please tell me, how flashy or bling bling is that foreclosure notice hanging on your front door? How bling bling is it to have the repo man in your driveway taking your car?
The vast majority of us will never be rich or famous and just because you see something in a rap video does not mean that you need it or can afford it. Get rich or die trying? Why don’t you just live within your means and not blame others for your irresponsibility.

We waited 6 years to find an affordable home we liked in the neighborhood we wanted. People kept coming in behind us and swooping up homes at higher prices, inflating the values of homes. We waited to find WHAT WE COULD AFFORD. Now you want me, the tax payer, to bail out those who overbought and took crazy loans? I don’t think so.

I can’t say I feel sorry for an investor who bought two properties in the hope of flipping them within a year and now wants to walk away because they’ve declined in value. Where was it written that investments–whether real estate or stock–can move in only one direction, up? Neither banks nor taxpayers should bail out such a person.

About the only people I might make an exception for are first-time buyers who genuinely were misled by unsavory mortgage lenders. And, yes, lenders who aggressively marketed no-interest and NINJA loans [no income, no assets, no job] should be penalized big time.

What Frustrates me so much is that there are good lenders that are not major banks out here to help these people and they are too scared to call. When they do they do not follow the advise even when I tell them to get a second opinion from a qualified financial planner. I even offer free information on how to choose a good lender at http://www.iprovident.com. There are ways to protect your assets and refinancing to get a toy or vacation is not one of them. Also little do people know there is a method to disrupt the interest you are paying on a mortgage. This results in your mortgage being paid in one third to one half the time it is amortorized for. To get an auto response send email to dwill3423@yahoo.com.

I think it’s okay to walk away from mortgage as soon as it makes a financial sense to do so. That is when the you owe more on your house than it’s worth and the outlook is for falling prices. The contract (mortgage) allows you to do this, then why waste your hard earned money making sure bank is okay?

I came from another country and living on h1 visa. Now, I bought a home with 0 down and 4% introductory rate for 3 years with interest only payments. Now, I am walking away from home, as the property depreciated. I am going to my own country, where I can live like a king with all money that I earned here – Thanks US for making me rich.

I agree with Roy from Knoxville and would point out that this article and many others like it could do a much better job of distinguishing between the different types of home-owners being affected here. The vast majority of “home-owners” in trouble right now are not your typical family buying a home to live in for years to come. Many are investors or people that took out a mortgage they could never afford in the first place. Lenders fault? sure they take some of the blame. But most of these people were not duped into taking a mortgage that they didnt unerstand. They couldn’t make the payments BEFORE the reset. These people should not be able to leave others with the tab. The investors deserve much more than a hit to a credit score if they walk away from their mortgage!

I can agree that there should be some help for the people that a mortgage out 2yrs ago, have made good payments for 2yrs and are now having trouble making their increased payments at the reset. These people are getting help – the Fed cut rates and muted that jump. And the help will continue.

This article is irresponsible as it gives these people the ok to walk away from legal contracts.

Of course you should walk away. Myself, I stopped paying my college and car loans because the perceived value of a Mazda Protege and a BS in Finance is going down.

Seriously, walk away. When the bank is unloading your house at a mere fraction of what it was “worth” a few years ago, I’ll buy it and hold onto it. Because a house is an INVESTMENT. Like all investments, it’s value goes up and goes down over the short-term, but over the long-term, it goes up.

Walk away. Morons like you, looking for a quick buck with no hard work or patience, deserve to lose it all.

Borrowers and Lenders/Banks were both wrong in lending/borrowing as much as they did.

What makes sense to me is that both sides of the agreement should split the losses. Find out when this started and then split the difference from then till now.

If the banks aren’t willing to pay down the bad mortgages they gave I feel that it is okay for the borrower’s to walk. They got ripped off.

It doesn’t makes sense for the borrower’s to pay when the banks that created the bubble by lending irresponsibly get off free and clear.

The Banks only lent in this way because they knew they wouldn’t ultimately be holding this debt but shifting it to third party investors.

Now that the banks are being forced to hold their own loans they will be responsible. The new responsible loans will bring house prices back to the fair market value as everyone who buys a home will be able to afford less with the tighter standards.

Hey you get laid off at work, so it goes to show you that american companies don’t give a crap about you. So why not return the favor? Just walk away from your house as soon as: A) You can’t pay the bill. B) Your house is worth less than you owe. Tada, 7 years later you are set!

Yes what the mortgage company and real estate world has done to the people is an outrage. They knew what was going to happen with these ARM and Interest only loans mortgages but they didn’t care they just wanted to make money and now look at how many people are falling behind. I am about to walk away from my house after my husband lost his job in October and I have no hard feelings about this. Honestly we never should have had a mortage as high as ours.

I might sound like a mean person but the best time to walk away is when you, as the buyer, realize that you can’t afford the home in the first place. If you need to depend on ARM or interest only loans to purchase a house then you should of walked away. Let us use common sense, if you are working at a minimum wage job do you think you can afford a house that costs $500,000? I don’t think so. I work at a job that pays around $50,000 a year and if I add that to my military retirement, let us say $20,000 a year that gives me $70,000 a year. I still can’t afford a house that costs $500,000. This is basic finance. I won’t put all of the blame on the buyer, just 90% of it. The other 10% goes to the bank that can’t say no to the buyers mentioned above. Now they are left with empty houses.
The next time you all think about buying a home my suggestion is that you use a fix rate mortgage so that you know what your payments our each month for 15 or 30 years, or better yet, make sure that you can really afford it. I, as a taxpayer, shouldn’t have to bail you out because you do not understand basic finance.

The unfortunate thing here is that most consumers, and the government as well, have a very tenious grasp on what really is going on in this market…especially in California. I see postings below that are not citing correct tax codes…there are certainly consequences for homeowners “bailing out” of their homes. I’m a former Mortgage Company C.E.O. and I’m walking my home in 60 days. Simple decision…I shut my company down after 15+ years in the industry, HELPING people crack into the high-priced California market…I certainly wasn’t gambling with my purchase, and have watched my $1.4 million dollar home decline in value over $575K in 24 months…our equity is gone…and now we’re upside-down around $250K. With the debt service and taxes at around $100K plus a year…on a home we can no longer afford…and that probably will require a holding period of over 5+ years to get back to even…it’s an easy decision…why through good money after bad. Holding the property 5 years would cost over $500K…and we’re already $250K down…so it doesn’t take a MBA, which I posess, to figure that one out.

For those of you out there “bashing” homeowners at will, I put this out there to point out to you that this is DEVASTATING to families…and every situtaion is different. I have a financial planning background…an MBA and my spouse is an attorney…We’;e educated people making a “business” decision.” It just doens’t make financial sense to through $750K at a dead investment…we tried to sell it, and to no avail and here’s another issue.

The two banks holding our notes, and despite my expertise in dealing with them…couldn’t agree or “fought” over whom whould recieve what dispersment wise on three offers…They had my paperwork on an another 3-4 and took # MONTHS to get back to us…despite my prodding…and our buyers walked away. So banks aren’t being dilligent enough either…We took the house off the market and we’re moving on at this point.

So in closing…Company closed, credit hammered from letting the mortgage go, ( and that a requirement by the way…WAMU won’t even talk to you about a short-sale unless you are 4-5 months down on your payment or have a NOD)…moving the family…kids…dogs…and leaving the home we spent 8+ years building.

Not an ideal situation…but we’ll recover. Our loan isn’t adjusting, we didn’t speculate…and we’re not “dead beats.” What’s fueling this situation is banks pulling product…a “credit” market issue if you will…We have no products available for even the most qualified of buyers here in California…and the market is PLUMMETING at break-neck speed. Banks are feeding what is a self-deteriourating cysle…the house next door went into foreclosure…and the bank “dumped it” for $750K…around $200k back of market…which KILLS comparable sales for clients refinancing…and takes what limited buyers we do have in the market away from those trying to get out of their homes…

It’s ugly out there.

My two cents.

Sure, let’s blame McDonalds for getting fat.
Blame Phillip Morris for lung cancer.
Blame lenders for adjusting interest rates.
For as long as the government bails out the dummies, they will keep whining and doing dumb things.
When you signed an Adjustible Rate Mortgage, what did you think would happen? Do you not know the meaning of the word ‘adjust’?

I just read this article and am doing a little dance inside. It is a windfall, legalized theft, one of few opportunities afforded a nice upper-middle class citizen by the current administration. I am checking with my broker to see if he can get me into a similar house for about $300,000 less than the one I owe close to $800,000 on now, and not take a tax hit for the bank auction. Thanks for the tip, I will always look to CNN for ideas on how to scam my way to my 2nd and 3rd million of net worth. Thanks also for the recent article on Tim Blixseth, I am even more inspired to work the government angle for a quick buck now that opportunities are cropping up all over the place. God bless America.

There are two ways to repay a mortgage loan: by paying the money back with interest (the normal way), or by surrendering property of the asset (house) to the lender. If the asset is worth less than the debt, why wouldn’t one walk away? This is just using the other clause of the contract. The banks should have been more careful before lending so much money with no money down.

It is OK to walk out when it is to financial advantage. I see no shame in doing so when the CEO of Country wide see no shame on walking out of his post with $100M parachute…. The stigma of shame is to keep the regular people from doing what the bankers do whenever things go bad for them. In other words they profit in the “good times”, they profit in the “bad times” and then share the loses with the tax payers… Is this capitalism? don’t think so…

You can’t just walk away from a home loan. If the property goes through a foreclosure and the lender sells the property for a loss, the lender will get a court ordered judgment against the borrower and the borrower will have to repay the difference or try to file for bankruptcy.

STOP TRYING TO KEEP UP WITH THE JONES’S BY PURCHASING HOMES YOU KNOW YOU CAN’T AFFORD!!

STOP TRYING TO KEEP UP WITH THE JONES’S BY PURCHASING HOMES THAT YOU KNOW YOU CAN’T AFFORD.

I bought my home for $315,000.00 from the home builder that I worked for 2 years ago.
I put down a $1,000 dollars on the new home, paid off my student loan $15,000 which is what the bank insisted I do before I get the loan and my 1 credit card $350.
I was making $49,000.00 a year with the home builder.
The fallowing year on 1/4/2007 I was laid off. I called my mortgage company ( Wells Fargo ) to ask for help, their reply was that they couldn’t help me unless I miss at least 2 house payments of $2,600.00 a month.
Boy that really helps starting down the road of bad credit.
I couldn’t find a Job for 5 and half months during that time I was draining my saving account to pay my mortgage.
By June of 2007 I was lucky and found a job, but my savings where drained, my home had dropped in price from $315,000.00 to $245,000.00.
Now it’s February of 2008 and my home is now $210,000.00.
Where is the light and when will somebody turn it on?
Walking, I’m thinking of running.

you should never be able to just walk away. I always had to pay my bills. My income level is 65,000/per year. I lost 9,000 on my last house just to get out of it. I am sick and tired of hearing about people getting in a jamm and not paying their bills.

I am 25 year mortgage industry insider. He sucks- he should pay. Of course he doesn’t want his name used- I bet he bought both of his props ‘owner occupied’-any mortgage insider won’t take that bet.
But, were bailing wall st, why shouldn’t he have hand out, too?

run dont walk … the hell with those banks that made those loan , i would have walked also if i didnt sell in 2006 , i was one of the lucky one that was able to sell before this majopr crisis..

I agree 100% with Roy from Knoxville, TN

We all need to do what is in our best financial interest. The basis of capitalism is to make a profit which requires taking risks. There will always be winners and losers, that’s the reality. Stopping judging and pointing fingers and except the facts. If you don’t like it, move to Cuba.

Actions have consequences. If you ignore the fact that you are responsible for those loans, it doesn’t make them magically go away. YOU are ultimately still responsible for them.

Sure…it’s ok to walk away. that’s a choice you have. HOWEVER, you’ll have that un-repaid debt hanging over you. The bank will foreclose, sell the property for less than you probably could, then you’ll still owe the bank money. If it forces you into bankruptcy, good luck trying to ever get another home loan.

Let’s see, you’re talking about a $60,000 loss on a $1 million asset. That’s only a 6% drop. I don’t see what the problem is. If it was a 50% drop, ok..I could understand, but a 6% decline isn’t much.

It comes down to two words, two words that have been slipping away in this country, “personal responsibility.” Quit pointing fingers, start taking some!!!

This article should never have been posted. It only encourages people to break their agreements. You can’t tell me that someone who buys a million dollar home hasn’t got the ability to understand the loan agreement. As a landlord you can be assured that if I receive an application from a prospective tenant who defaulted on a mortgage, I’ll send ‘em packing!

UNBELIEVABLE!

I guess CNN doesn’t like my view on this and chose to censor it. They posted it last night after they screened it, but some time overnight they came back and deleted it…

Well, here it is again-
Have the government barter a PROFITABLE/BREAK-EVEN arrangement WITH an assembly of major mortegage companies to bail these idiot borrowers out. Mandate that the following options be offered to every borrower in trouble.

1) Borrower does not accept and manages to work through this.
2) Borrower does not accept and loses house, and potentially all other possessions, without re-imbursement
3) Borrower ACCEPTS and works through situation (all parties pretty much break even)
4) Borrower ACCEPTS and still fails to keep up payments – they lose the house and owe the government full ammount owed (which will be reimbursed to the mortgage company after full payment is received. The key here is that they owe the government the money, and therefore must pay eventually or face jail time. No bail-out via bankruptcy.

Please fill me in. I’m thinking to buy a home using a loan for the first time. Is a loan really an OBLIGATION to pay it back? Or is it really a deal, that if I pay every month I get to keep the house, otherwise the bank keeps the money I paid AND the house. If the second is true, then I see no moral or legal obligation to keep paying. I must keep the contract, but if contract has an out clause, if you dont pay, then what’s the big deal? Just follow the contract. Yes, the bank will make it hard on my credit score making it difficult to get another loan later, but that sounds fair to me too. It seems that if I pay off the loan too soon the bank could also give me a bad name, telling others I’m likely not to pay much in interest payments.

How is walking away cheating on others that pay every month? Or is it cheating on the government? I dont follow. So the bank doesn’t make as much money on my interest payments as they hoped, big deal. That’s why the bank charges you to make a loan. I didnt make them give me a loan, it was their risk too, right? And they are bigger boys than me.

People have to accept responsibility for there decisions. You cannot use a home as an ATM machine. Of course, we cannot hold the lenders harmless either. Lending more than the just value of a property is crazy.
People signed a contract, does a contract no longer have meaning? Are we becoming a natin of people who if something doesn’t go our way we walk away? Have we lost our principles of honor and responsibility? What message are we sending to the young people of this country?

When it is compromising basic, essential needs for yourself and family—-walk away. If it becomes so stressful that it affects your physical and mental health of yourself and your family—-walk away. Combined, my husband and I make $190,000. a year. Our mortgage (combined) is $4,700. It will max out at $7000, by the year 2009. If i’m not happy, my children are not receiving what I feel they should have, or if I’m just too damn tired of working overtime—I’m walking out.

I want to know what some of you would do in my situation.

I bought a new condo in southern california in March of 2007 for approx. $345,000. I was told by the builder/seller that they will not drop the prices on the last 2 phases!

Now they are selling the same condo for $240,000.

I have lost %30 in my home in one year where no where else in America has the value of a home dropped that much in the same time.

I can still afford the condo but I want a house now.

I am thinking about going and buying a house with my great credit… and giving the condo back to the bank.

This will not only teach the lender a lesson, but the builder/seller too!

Tell me your thoughts!

I don’t see the government bailing me out when my stock picks fail….this is the same thing! They bought over their heads and tried to get more than they could handle….greed…they signed a legal contract..if they can’t do the math they shouldn’t be buying the house. If the government bails these people out I will be cheating on my taxes the rest of my life….big time!!!! It tells me that we have lost all morals and principles and it’s every man for himself. I am not paying for someone else’s mortgage to live higher on the hog than me. I’ll bet many of these people have two brand new cars in their driveways too!

Who ever came up with this question, congratulations! You’ve certainly stirred the pot.

I’ve spent nearly 2 hours reading the over 400 responses to this question. Although I don’t have an exact count, there appears to be a great number of people who feel it’s OK to “walk away” from their financial responsibility simply because. And the astonishing part of all this is that the majority of people who are “walking away” are the same people who called up looking to refinance their homes because they were drowning in debt and their credit history reeked of late-pays, no-pays, and charge-offs. These people have already established themselves as it’s OK not to pay their financial obligations as agreed too.

The comment I’m posting is coming from an experienced person in the mortgage industry. I owned a mortgage company for over a year. I have data (thousands of it) to support my remark about those who don’t pay their bills. Additionally, I recently contacted 37 lenders just to find out how many people simply stopped making their monthly mortgage payment when their Adjustable Rate kicked in. Over 97%. So, these people who refinanced their homes and took advantage of some of their equity, felt it OK to stop making their monthly payments. Why? Is it now OK to live in a house rent free? Is it now OK not to make some effort to meet your financial obligations?

For those people who wrote responses about who’s to balme and screw the mortgage companies, my response is two-fold. First, it’s not OK to screw the mortgage lenders becasue if you do, you will cause the investors of these mortgage loans to go somewhere else. It’s already happening. Second, 80% of what you are reading and hearing concerning this mortgage debacle is incorrect. The media has simply not reported the entire story. But, they’ve done a great job telling you that you got screwed. In order to fully understand this mess you need to have worked in this industry. Now, did the financial institutions and mortgage brokers do their job? No. They failed to be your Financial Partner for Life. Did the mortgage brokers take advantage of you? Absolutely. Did those people with low FICO scores get taken advantage of through outrageous fees (points)they paid to get a mortgage loan? Absolutely. On the flip side, did the overwhelming amount of people who refinanced with an Adjustable Rate Mortgage loan follow the steps clearly outlined by the mortgage brokers or lenders. Absolutely not. Because if they had of, there would be half the amount of foreclosures we’re seeing.

As a final comment, if you think it’s OK to “walk away”, without good reason or cause, would you mind loaning me your money?

Give me a presidental candidate that favors no bail outs or tax exemptions for subprime suckers and they’ll get my vote. I know – don’t hold my breath.

I read the gruel comments responds about greed, accepting faith, accountablity and responsibility however, the banks,lenders and consumers assumed that property value would maintain so there was always refinancing out of a loan to a better one however, when that option went away this forced people to maintain the loan which require higher payments, they could not sell the property either lenders’ guideline now prevents people with good fico score to quality on an easy loan more down they say and lenders are refusing to do the short sales. The practice of buying muliple homes has existed for a long time but never has there been a situation that a property owner not been able to redo the loan and with home prices being higher in value the down payment requirement plus stricter lending guideline discrimmates the working class. Investing can not only be percieved as greed but a way to secure a life time dream of being secure for ourselves and our family.
I feel for alot of people. I know I am stuck with a problem. Investing was the only way I could bring my life up after 911 when I lost my job and for the first no one offer me work then I realized I could not take care of my basics a roof over my head, food on the table and pay my bills.

These people are what you would call irresponsible losers. They won’t walk away from their mortgage…. They’ll drive away… in their big gas guzzling SUVs towing a boat behind – both paid from by home equity loans. Sorry but the bank should reclaim the debt owned. No taxes on the debt forgiven. This is BS. I’m outraged that our government and banks want to either bail them out or let them off the hook. Also our wonderful leaders want to give them (and everyone) $600/1200 in economic tax relief. I guess they can also have that big screen plasma as well. This is sure to save our economy. Let housing prices tumble so that the rest of us intelligent people can finally buy a house at a “reasonable” price …. and the other schmks can go back to renting.

When is it okay to walk away?

when you are a dumbass who bought more house than you can afford, or took out an ARM when the interest rates were at the lowest rates they had been in thirty years.

A simple math and a survival instinct, I think if the mortgage is eating away your savings and income, it is alright to walk away and be honest to yourself that you can’t afford it. It is better to use those future income for yourself and family needs.

Let’s get serious here, I understand that some people ended up getting lured into bad situations by unscrupulous lenders, but for the most part, this mess has come about due to thoughtless individuals who knowingly bit off far more than they could chew to get that impressive dream house at any cost. Now these people are pointing fingers and looking for someone (Mr. and Mrs. Taxpayer) to step in and pull them out of their self inflicted mess. Frankly, I’m sick of it! It’s time for you to take responsibility for your actions and maybe next time you’ll think before you leap, although I seriously doubt it.

The answer to this question is so much more practical than everyone is making it to be.

I read through most of the comments on here and for the most part they deal with the moral or ethical aspect of walking away from an unaffordable mortgage.

Regardless of how a family got into the position, there they are smack dab in the middle of it.

If you can’t afford it…you can’t afford it. If your mortgage goes from an income level of say $80,000 per year to requiring $160,000 per year to pay. Well, what can you do? For 99% of people, they simply have no means to make up this difference. They have to walk away.

Afterall, I’m going to feed my family and myself before I send in a mortgage payment.

It doesn’t matter what was signed…Sh%t happens and we move on. I mean c’mon big companies file for bankruptcy, individuals file, mistakes happen and we pay the price. Our credit takes a hit, we deal with it, we get passed it.

It will all be over soon enough. Life’s too short to worry.

Thank you JF of Rock Hill, Sc for saying “shame on the lenders, send them to jail”

- our neighborhood has suffered for the practices of speculators & sub-prime investor/tenants…
We bought low, invested heavily (in cash) & now (amazingly!) could still make a profit, but our buyer market has suffered because of our new neighbors (one has multiple families living in a 2Bdrm 2 bath house) – others – “flippers” who thought they’d make a bundle & now have properties looking very shabby, have reduced our chances of building our savings for retirement.

It took us a great deal of effort to buy our 1st home in So. Calif., we made a decent profit on it… put a big down payment on our current house + improvements. We worked very hard, did a lot of “sweat equity” (& we’re not getting any younger, we’re not too long before retirement….).
About 12 months ago, if we’d sold we’d have made about $500K profit, now it’s down to maybe $100 – 150 by current market & neighborhood issues.

Not to mention what the sub-prime fiasco has done to our stock portfolio !
How about the false economy encouraged by the lenders who should be held
responsible for their actions & practices ?

We had to jump thru hoops on fire to get our first home loan in 1992 !

By the way, our mortgage is with Countrywide, who every 2-3 weeks sends us an offer to “Cash out” “re-fi” reduce debts, etc. to values that would easliy put us “upside-down” in our house… who has been driving this TRAIN WRECK ???

Who’s going to pay…???
Dear friends it’s us,
the poor tax payers who actually pay our taxes !!!

Check cashing, pay check loan, advanced tax refund credit, credit cards, equity loan, national debt, … Oh, BTW, people, you have to pay it back. That’s what ‘borrow’ means. I lost money in stocks because of your stupidity, if you can show me how I can “walk away”, I’ll let you do the same.

walking away from a mortgage does not necessarily mean you’re a dead beat or irresponsible. It all depends on the situation, if you’re in an adjustable (2, 3, 5 7, or even 10yrs) and can’t afford the payments.. do you deplete your life savings or max our your credit cards to try to stay in your home because the payments are too high? OR do you simply start over? in the circumstance that you simply have no other options.. i say why not?? …. by the way this is geared towards ill informed 1st time home buyers, not investors!!!!

I am grateful that I am able to pay my mortgage every month. Our house is modest and the mortgage will be paid off in a few months. We are selling, Ha Ha–It’s not a joke!! We are putting our home back on the market this spring for the second year in a row. We are only asking what we believe someone will be willing to pay for our home. If we cannot get enough to be able to afford a condo, we will stay put. Our goal is to be mortgage free in our retirement. We know what we can afford. It may not be the most glamorous condo in town, but it will be what we can AFFORD!!! AFFORDABILITY is the key word. I have never in my life run into so many sleazy Real Estate Borkers and I truly believe they are partly to blame in this mortgage mess. I live on Cape Cod where there are many second homes as well as vacation rentals. There are also many decent, hard working families that will never be able to afford a home, or who are struggling to pay their mortgage in this economy. When the housing market started going down, these realtors were misleading buyers into believing that they could buy a home and rent it out in the summer for ridiculous amounts of money. I saw it for myself. Many buyers told me outright that my house was too small to use as a rental. Well, quite a few buyers in the past 2-3 years were not able to recoup even their down payment and their value went down, now they are in or close to foreclosure. That hurts sellers like me. There are a lot of homes on the market in my area. I think that after they go after the mortgage brokers, the next in line should be the agent who sold them the home. That is only one part of the mess. DO YOUR HOMEWROK FOLKS!! My heart breaks for people who honestly bought and now the value of their house has gone down so low that they will never recoup what they paid in the first place. However, I do not believe it is ever a good idea to just walk away. I have also read about some mortgage companies totally ignoring calls from their customers asking for help.
Those companies need to be prosecuted.

President Bush doesn’t like black people and that is the problem…

I would think if the energy giants weren’t putting the screws to homeowners along with the out of control homeowners insurance companies that many homeowners might be able to swing the offset of the mortgage payment going up, but when you factor in electric bills that have doubled as with the insurance on homes then the homeowners are so overwhelmed that they can not afford to stay. I party blame our government for not controlling the energy giants of this country. Deregulation is another word for companies to charge what ever they feel like charging and no one can stop them. In three years since deregulation here the electric price has went up 95%. Factor in the cost of homeowners insurance going up after Katrina then the cost also skyrockets far beyond a measly extra two hundred dollars month on a mortgage. Walk away? …I would if I hadn’t paid double payments on my loan all this time.

There are some situation that have no choice but to walk away. For instance mine.
I have been in my home for going on 9 years during which a very bad marriage ended leaving me with all the debt. I struggled to make ends meet for a long time by myself to pay all the bills. Ended up filing bankruptcy 3 years ago keeping the house. And re-financing it to get extra money to pay off some debts. Have never been late on my house payment the entire life of the loan. It broke my heart to file bankruptcy, was embarassed to say the least.
Then did see that there was life after that, however cut backs now cause me to lose my job and have no income coming in and because of my age, have a hard time finding a job. I am 56 and have found a lot of companies that just will not hire someone over the age of 50 no matter what how good you are at your job.
So now I have a choice of getting a job for 6 bucks an hour which in no way will make the house payment much less buy gasoline and food.
So, as many have said…do I walk while my credit is still somewhat okay to be able to pass credit enough to rent?
I am up to date with payments, however after this month will only have enough to #1 make another payment on the house #2 spend the money to move before the foreclosure would reach my credit report. As you all know, even apartments run those reports.
My loan in with Countrywide, who by the way said “NO”, they could not adjust/refi the loan to get my payments down because I do not qualify with no income… now some of you say the bank will work with you. Well it seems as if they would rather have a bad loan than work with me. So after all this I say….NO CHOICE, I WILL HAVE TO SADLY WALK AWAY FROM MY HOME. The bank has made a lot of money in the past 8 years and there is 18K left in the equity that they will gain. I suppose that is what they are counting on. Well, I say to Countywide…You suck!

Your congresmen have let bank chanrge userous interest rates. We used to put people in jail for charging rates like this and thwt is a true statement. They changed the bankruptcy laws to protect the banks. they let the baks charge outrageous interest and fees with no control. It is no wonder that people are giving up. They have no possibility of getting put of debt without walking away from it. We asked for it we elected morally corupt people that sold us out.
find ou how you reps voted and vote out the bad ones.

YOU HAVE GOT TO BE KIDDING. These people signed a legal document, took out a legally enforceable obligaion; the notion that it’s OK to “just walk away” is so much CRAP. You gambled. You got burned. You have no more right to dump that on your bank or on the rest of us who don’t gamble than you have to expect us to cover your Vegas losses. Grow up, accept that YOU and YOU ALONE are responsible for the mess you’re in, and take your foreclosure, bankruptcy, and subsequent financial impotence like an adult.

This is so wrong, when these idiots,granted I agree that what the banks and lenders did was dishonest, but I think its also wrong on the borrower’s parts to walk away when they can pay. I think that if its proven they can pay for it, they should. I know with student loans, you can’t just walk away and not pay, they will send a US marshall after you. Where is the justice in going after the people who want a free ride after they knew the risk? I say tough nuggies to them and the authorities should step in and try to recover back some of the money they owe, first by trying to work something out with them, or garnish their wages or something. Its like me saying to the bank lenders who give me those student loans, and after I fail the course at college for a refund, or else I won’t pay, I really think this is the kind of thing where everybody needs to share the blame and accept responsibility for their actions and just make the best in their situation and tighten their belts and roll their sleeves and work hard and learn from their mistake. By them giving up, and walking away, only allows laziness on their part and lack of discilpline. I also think we need something like this to wake up our country and realize everything is not free, and a home is a place to live in, not get rich. To those people who admitted to doing this, shame on them, look in your hearts and see where your priorities are because obviously their not there.

Yes it is ok. Let’s look at this from the other direction. For years all your heard is you can never lose in real estate and the value of real estate never goes down. Well it has and experts say about 20-30% off from 2007 peak prices. Now, the saying you hear and will probably hear for the next few years is the market will come back and values will return. What if they don’t? Are you going to still pay on your $300k mortgage when you house is only worth $210k and no hope of the value going up. Anyone with financial sense would say that is foolish. Do not sit there and say that will never happen because it has elsewhere and very probable here. Japan was in a housing price downturn for over 10 years and their interest rates were at zero and still prices kept going down and still have not returned to thier peak prices. So don’t say it can’t happen here or it won’t happen here. Maybe this guy is just betting the worse case scenario why everyone sits and hopes they get the value back in their homes.

Under normal circumstances, no it is not okay to walk away. As many have already stated, if you can’t afford it, don’t buy it. The onus of whether or not a person can afford a house does not just fall on the lender. The buyer knows better than anyone how much they can afford to pay. Anyone who gets into a house where their payment is over 50% of their monthly income is asking for problems. Just because the lender says you can afford the house doesn’t mean you really can.

THE U.S. GOVT., HAS ALLOWED WALL STREET, THE BROKERAGES, THE BANKS, THE FRAUD, FRAUDLENT APPRISALS, TO CONTINUE SINCE, LTCM, AND LINCOLN SAVINGS & LOAN SCANDALS OF 1980′S, ALONG WITH OFFSHORE ACCOUNTS, AND CORPORTIONS THAT PAY LITTLE OR NO TAX, “THEY” THEN EXPECT THE FED TO BAIL THEM OUT, FROM ALL THIER CROOKED TRANSACTIONS. WHICH EVENTUALLY, END UP ON THE U.S. TAXPAYER, ALONG WITH A DEFLATED DOLLAR/ DUE TO INFLATION-(INCREASE IN THE U.S. MONEY SUPPLY) THE AVERAGE WORKER, IS THEN CAUGHT IN A VISE, BETWEEN OUTSOURCED JOBS, NAFTA, WTO, ALL ENDORSED BY WASHINGTON, D.C. SO…, THE AVERAGE JOE IS LOOSING EVERYTHING! LET THE HOUSE GO BACK, AND SHOVE IT RIGHT UP THE BANK’S A** !! THE GOVT., BANKS, BROKERAGES CREATED THIS MESS, LET THE WHOLE D**MN THING COLLAPSE, RIGHT ALONG WITH THE GOOD OLD U.S. OF-A. WELCOME TO GLOBALISM, IN THE FASCIST STATE! THE U.S. CONSTITUTION, NO LONGER EXSISTS, AND THE PUPPET POLITICIANS RUNNING FOR OFFICE, ARE PRESELECTED FOR THE POPULACE VOTE- IN ACTUALITY, THE U.S. PRESIDENT HAS ALREADY BEEN SELECTED BY THE ELITISTS. AND THIER GOAL IS TO BANKRUPT THE UNITED STATES, RIGHT ALONG WITH THE FEDERAL RESERVE, 16TH AMENDMENT, ALL CONCIEVED IN 1913- HOW TO WIN ONE ASKS? STOP BUYING ALL THIS MATERIAL, CRAP, TO SUPPORT THESE CORPORATE BA*TARDS- END OF SUBJECT, END OF DISCUSSION, AND WELCOME TO THE RECESSION OF 2008, ALONG WITH PEAK OIL, BY 2015-

Thousands of people walked away from their homes in the 1991-1995 bust in Los Angeles leading to an almost 40%-50% drop in home prices – There is no ethics anywhere in this industry so why should upside down buyers sacrifice their future for the sake of the ecenomy? It is very difficult to tolerate being upside down on your home, make $7000/month and pay $4000/month when you can rent a similar place for half the price – Kramer predicted 100% default rates for subprime loans and he may very well be right. I fully expect a 50% drop in prices before we see a bottom – It is absolutely pointless to keep making payments under these circumstances.

Never. It is called personal responsibility. Can you actually tell me that all of the people walking away had no idea what they were getting into? I don’t believe that for a minute. People in these situations need to check with their bank or mortgage company or other resources to determine a better solution. And, people should really think before obtaining any loan, especially a loan that calls for little or no down and increasing interest throughout the life of the loan. That’s just common sense. Housing prices go up and down like every other asset. People walk away from credit card debt to mortgages to relationships much too easily these days. The bottom line is now and always has been . . . personal responsibility.

I’m an investor in Atlanta and last year sucked. This year will be better because now I’m aware of what has happened. I’m sorry for the people who got surprised by their balloon payments but buyer beware. Bottom line buyer beware. Rates are better now for buyers so anyone who did not make the poor decision of getting involved with a too good to be true loan is still cool. The mortgage crisis is now over…..you heard it here first.

i think it’s unfair to just point the finger at one group of people and say that it’s their fault while letting the other side off the hook. borrowers are playing a victimized role across the nation in this foreclosure epidemic, when there needs to be some sort of accountability in understanding what they’re getting into in the home buying process.

i understand that predatory lending and mortgage fraud are unethical practices, and blame should be placed on the mortgage brokers, realtors, appraisers, and attorneys involved. however, these are multi-thousand dollar transactions that consumers are getting into. they should have as complete an understanding as possible of the documents they’re signing. i have seen many instances where home buyers walk to the table, sign anywhere they have an X, not ask questions, give a check for the down payment and receive the keys and leave within a short amount of time. now they are whining and complaining about how they got taken advantage of.

if you are looking it from that side, there is no reason to let ignorant homeowners off the hook. in that sense, they’re not really victims. they’re just not responsible people. i know there are isolated cases where borrowers were flat out lied to, but at the same time, my point is that there needs to be some sort of accountability on the consumers’ end as well to balance their checkbooks, finances, and practice good spending and saving habits. walking away and filing for bankruptcy is not the answer…in fact, it’s awful advice. the message it sends is that signing a promissory note (a PROMISE to pay) and not upholding it is perfectly fine. educating the consumer is the ultimate answer.

It seems unfortunate to me that there are many people who overextend themselves with the hope of realizing profit later on only to have their dream shattered. It is my opinion that you buy what you can afford and you strive to a level of income that can support your purchasing habits. If it means sacrificing to get something that is a little below your standard, then you do it. Having a house that I can still afford after paying for ten years and living through the crumbling economy just shows that I had common sense in the first place. There are way too many people out there that think they can live the good life on credit. Guess what? It just comes back to bite you in the long run. I feel badly that people try and live in this manner, but I will do what is smart for my family and if that means sacrificing a part of my optimal standard of living then so be it. Spend your money wisely people. Stop overextending yourselves.

I have no sympathy for investor and real estate types who think housing is a commodity to be used for get-rich schemes.

Homes are meant to be lived in by families for the long-term. Their stupid little games inflated housing values to unrealistic levels while families across the country go homeless.

Now that the bubble has burst, the rest of us are expected to foot the bill.

Not all these people walking away are deadbeats, I AM NOT A DEADBEAT. I worked two jobs for years, always paid my bills, never used credit cards, I only went out rarely (mostly, because I worked all the time.) Drove the two cars I owned until they just would not go any more, I was doing great. My second job income was entirely to pay off student loans, (the only loans I had besides my mortgage.) Then I woke up one day, numb on my entire right side, MS. It wiped out everything I had spent so many years working so hard for. I planned for almost everything except if I could not work. I never even got colds, I never even conceived the thought of an incurable diesease. Eveything was ok for awhile, but the meds, and doctors copays, and not being able to work. I found myself broke and with less money coming in then my monthly bills. It never occurred to me that I would not be able to work. I used to talk about people in these situations like of all you are, I always said I would scrub toilets at McDonalds before I would lose my home. Now I am less judgemental. Who was it that said “You should not judge someone, until you have walked in their shoes.” Boy, I have learned a hard lesson!

Perhaps unscrupluous lending, but also dumb borrowing. Luckily, if enough of us get substantially dumb, we won’t have to be responsible for our actions, the governmwnt will pull us out of the hole we dug for ourselves.

Instead of just walking away from a mortgage and then going through the foreclosure process, why not, after consulting a lawyre, sign a quitclaim deed giving the property back to the bank, or whomever own the loan on property.

I believe this will satisfy the underlying agreement of the mortgage – the bank either gets the payments for the property or the property, without a repossession/foreclosure action being necessary. And since the bank then owns title to the property, it would have to acceopt a short sale from itself, not the former mortgage holder.

There may still be some implications for one’s credit rating/score, but probably not worse than having a foreclosure.

Sure why not? Car gets a dent, buy a new one, job sucks, quit, marriage goes sour, get divorced, can’t make the payments on your home, walk away. When does it end? Do we live in a disposable world? What a sad state we are in.

It’s all good when someone else who has scrimped and saved for over 25 years comes along and buys a very much appreciated home with cash. I scrimped and saved for over 24 years, raising my three children in an uninsulated travel trailer for over 24 years in Alaska because we did not qualify for a home loan and were the wrong race to live in decent subsidized housing. We never qualified for welfare because I saved. Now the children are grown, but my dream is to raise children in an American house so I will buy one and take in foster children. My children appreciate a roof over their heads and simple comforts, such as a toilet, running water, and a sleeping area of their own. It is possible to survive as a wholesome and compassionate American living in a trailer or car.

There’s no such thing as “Through no fault of their own.” Buying a house is a big responsibility that requires adequate financial planning, to include understanding the contract you sign with the bank and having a much larger emergency fund to get through tough times (job loss, divorce, etc.). If you walk away from a home, you prove that you are not mature enough to own a home and have no business having access to this credit in the future. For those asking what does it matter to the rest of us if you walk away: My brokerage balance has taken a hit, and there are a lot of pension managers trying to figure out how to deal with the fallout of this crisis. Congress is about to widen the deficit with an economic stimulus package, which will be paid back with future taxes. That’s what it matters to the rest of us.

Oh, it’s all the banks fault because they loaned money. How about folks being responsible for their own actions? I know that would be un american. So would living within your means. People that walk away from their own bad decision should not be able to bankrupt out of it. Pay up deadbeat.

Rich Rodriguez doesn’t seem to understand this either. He signed to a $4Million buyout clause that he freely agreed to with WVU. Then he agreed to a $4Million clause with UM as well. Now he wants to “walk away” paying much less. This is how America works! No one is worth their word!

Answer this question, you were living in the ghetto streets of SouthCentral Los Angeles, when you have to watch your back walking in front of your house to pick up the paper, and one day opportunity knocks and the chance comes around to buy a house about 50 miles away to a city called Rancho Cucamonga with no money down, you wouldn’t jump on it even if you knew you couldn’t afford, come on people wake up and realize a lot of people that are walking away are people that were living in bad areas and had the chance to move themselves and their families to a better neighborhood to raise their kids, better schools and thanks to these loan officers and lenders that lied to make their commission, living in nice areas and driving nice cars, come take a drive to SouthCentral LA and see for your self, if it was you in that situation you wouldn’t do it, I think you would even if the payment was double your salary, but just to have the feeling to live in a nice area for few months, without hearing gun shots, helicopters, your place broken in every week, being harassed by the way you look I think everyone that had the chance would do it. I did it and now I’m walking way but I saw the other side of life, the good life.

I walked. Not being proud. My house was appraised at $320k my loan $285. I paid a bit over $5ok in one year when I got behind by 2 months. Most of it not principal obviously, I was 5 days late on a $3500 a month payment and they couldnt guarentee me they wouldnt forclose. I told them why am I trying then. I gave it back after having it on the market for what I owed for almost 2 years. They sold the house the same month I had to leave with my two kids after living there for 10 years. The house sold for $179k…..Why wouldnt they help me when I was willing to pay. Are mortgage companies insured for the appraised value? Do they make out better if there is a forclosure? There has to be a loop hole or why dont they care at all about the customers. Is a former Ameriquest CEO appointed by Bush as an ambassador to the Netherlands or somewhere? Thats what I heard and I cant believe it.

Simply put: Your are not walking with God if you just walk away. Put your faith in God and it will all work out. Did didn’t create quiters. He created LIFE!

In an article in the recent Money magazine, they profiled a couple who was caught up with their rate rising and their payment skyrocketed. They quoted her as stating “I thought that if the bank loaned us the money that we could afford it” (I had to paraphrase since I do not have the article in front of me. I simply cannot comprehend people who cannot manage their money and want to live beyond their means. However, on the other hand, banks should not loan money to individuals who simply cannot afford the payment.

Blame is a two way street and honest, hard working, money conscious Americans will end up paying to bail others out who have not managed their finances. We will pay if the government has a “bail out” program (in tax money), we will pay with lower house values which make up a large portion of most Americans net worth, and we will pay in lower portfolio values since the ripple affect of the housing bubble will be felt in corporate profits.

When the blame for the current ills of the economy are made, the finger points right at those homeowners who may walk away from loans, and the very banks that extended loans beyond the means of the borrower.

NEVER!

Fundamentally, bank bought the house. We are just renting from the bank. We pay rent in the name of interest. It is a rent to own deal. If the rent is too high, what do you do? You walk away.

Wow…can’t believe CNN actually posted that article, talk about irresponsible journalism. And based upon the majority of the responses, it seems we all agree this article is sending the wrong message. We all know that there are people out there that going to use this article as a basis to get out of the mortgage they signed. I can’t wait to see those people come back and say “Wait, I have this article from CNN that says its ok to walk away from my home.” Now the vicious cycle can start all over again.” Or even better when those people who walk away find out that having a foreclosure on their credit report, it sits there for 10 years (fact), and any good lender is going to question that foreclosure (regardless of age based upon the tightened credit standards), and most importantly, will not lend again to someone who is fiscally irresponsible like that. It’s bad enough that our economy is struggling as it is, but to allow an article like this to be posted is morally and financially bad advice to anyone who owns a home who is struggling. I would love to ask the Writer of this article: “Would you personally lend someone $350k or more of your own personal money to buy a home, knowing that they have a foreclosure on their credit report due to walking away from a home? I bet you would not. Congratulations CNN you have successfully demonstrated what the cause of our current recession (no sense denying it): IGNORANCE!

I think it’s absolutely appropriate to walk away. House prices are set to fall (in real or inflation terms, regardless), and fall considerably.

I wanted to buy a house (just to live in! yes some people do that too! no expectations of life-long profits!), but now I see that true value of house is much lower than what people ask for.

You know, people in those houses couldn’t afford to buy them, no way! So why they are asking me to pay the price that they can’t pay themselves?

I think banks should ask for 20% down and REAL job and REAL income. Once you commit 20% down, you will NEVER walk away.

I can’t believe how stupid banks were. I really can’t believe. They deserve to fail.

As a result, recession is here. But it’s good. We really need to come back to Earth (right now we’re somewhere near Jupiter, and that’s NOT GOOD).

So I must say, recession and deflation are a good thing.

I am also very sick and tired of all the ‘economy is growing, or economy needs to grow’. I just get my paycheck, and for all this growth, my wage is stagnant at best!!

So I think they mean that rich people get more money and call it ‘economy is growing’. I would rather we forget about ‘economy’ and get real, and get houses affordable (in prices!, not mortgages!).

I think recession is a good thing because it will let us get real again.

It all begins with financial education. When you mix greed with stupidity what else can one expect.
Specifically,sound money management comes with a price as in any learning experience.One must start in high school or sooner to learn this. Unfortunately too many people are too concieted to admit their lack of sound money and financial management. My suggestion would to sacrifice some time to study money and financing matters before even attempting to buy property.
We all should know by now that there is no free lunch and there is no such thing as the sure thing.
Anyone who takes out a mortgage should have the intellect to understand all the fine print involved.
Unscrupulous lenders are always looking for suckers. They’re not hard to find. “Start reading” people and “learn”, that’s the answer.

I walked away from my house 3 months ago after I had to move country and was unable to sell it even after a 4 month listing. I did not have a single buyer come in during the listing period mostly since there were neighboring houses on foreclosure selling at $40,000 lower than my list price. Its hard to compete with these and i feel the banks are partly to blame, but the buyers are equal partners in this. When I bought my house, my credit rating was 625, having just moved into the US, and gradually over the next 4 years, as my income grew and i had no credit card debt, my rating jumped to 750+. However, when I tried selling the house last year, even though it was immaculately maintained and came with a plasma TV, it was way higher than market prices. I could not lower the price than what i owed the bank and my agent, so i was stuck with it. Having moved country, my income in US dollars stopped and i could no longer afford the mortgage from my savings as I would have incurred huge losses.

I guess my situation is unique, but it was frustrating for me to see the kind of people buying houses in my neighborhood who were paying 40% or more than they could afford. Thats where the banks were at fault. Even though my credit rating was low, it was mostly due to the fact i had just moved into the US, and my income was high enough for me to afford the house comfortably. Financially, it made sense, and now walking away has made me feel ridden with guilt, and some anger at the banks’ mortgage lending practices that were so faulty! I still have a lot of fondness for my bank for having the confidence in lending the mortgage to me, so my guilt at failing to keep the trust between myself and the bank will rattle me for a long time.

you know what’s sad, is the rock throwing… we are a country, a common people and should try and support one another. maybe some people weren’t greedy, as many in these posts are ASSuming… take my case…
-we bought a house well under market value and fixed it up we had an opportunity to start a business and really go for the dream. Shortly after starting our business everything slowed down in business and my wife became pregnant with our first child. we tried to sell with no luck and our income has drastically dropped.
i will walk away and try again one day
but i pray that the merciless will never need mercy…

where to even begin. morality: is it moral for lenders to take advantage of
homeowners, many who are unfamiliar of the risk. confounding terms and greedy loan/realtor’s were fast in selling during the boom, focused on there commission rather than being honest. they produced horrific loans, lent out to high risk individual’s. certainly it was poor business unless your part of the industry how could you know what your really getting into. And now those
loans have flipped. jobs lost to the declining economy, ARMs adjusted, or you have an amortized loan. How could home owners still pay their mortgages. cant sell, who’s buying? cant refinance even if the rate is low your home couldn’t appraise. so you could seek lender assistance (probably just laughed at) for a loan modification or a payment arrangement, but if you don’t fit the criteria(most do not) then go and seek help from other independent nonprofit organizations they do help just hardy at all,and they is still criteria. We’ll then bust your butt and bite the bullet get a third job, food is overrated so eat less so you could break even in five years. Or come aboard the bandwagon and short sale or deed in lieu. why not? credit will hurt but for only a short time. its in the terms of the contract that the property is collateral if the loan cannot be paid. so let the bank have it back. It is a huge deal of importance but not enough of an importance to go hungry over.

I think it’s alright when you have legitimately been screwed by a deceitful lender, as I was. I hope she gets put away by the law someday. Fortunately, just yesterday in fact, I was able to refinance from a 13% interest ARM loan to a 30 year fixed loan at 6.15%.

BAD, BAD, BAD! This article seems to be touting the “just walk away” option as a great way to go. No! This is a lose-lose-lose option, and the biggest loser is the economy as a whole. If this “trend” grows, it will pour fuel on the fire, since it will further suppress home values, pushing more borrowers “under water,” and encouraging more people to do the same thing. We have seriously messed up if we have made foreclosure a more attractive alternative than honesty and integrity.As for David, who spent a million bucks on spec homes and has now stopped paying because it was no longer convenient, that is especially bad! He should not be rewarded for bailing out on a bad gamble! Try doing that in one of the other legalized forms of gambling in this country, and you pay the price…do it on a spec home and walk away free and clear. There is nothing good about this.Oh, and did I mention the ethical side of this?

one thing good about america and thats nobody can take it away from you is that you can say how you feel and what you think.
this mortgage market is another politics. most people in this respond seems like they like banks and what they are doing to the homeowners. maybe because they havent been through what most of america is going through right now. Loosing their home. Its not about integrity and and its not about you dont want to pay. its about banks are very greedy and all they want is take every penny they can get even if that means to make a family homeless.
thats not a business. business is when you make money by making another party happy. that way you will stay in business. if people dont like your product you sell they wont come back to your store. thats how this mortgage loans are. mortgage brokers lie and cheat to people and give them loans that they cannot afford. They get together with appraisel people, underwriter and everyone they can to make them pass the loan even thought people cannot afford it.
americas dream is to own a home and give their kids a better life in their own home. Most people who bought a house and own it they want to keep it. few are there who has it as an investment . but that doesnt mean its bad. these people work very hard all their life, build up their credit and than buy a house. its not that easy. but its easy for the banks to lie, cheat, take all the monthly payments, closing costs, all other hidden charges, raise the interest rate, give baloon loans, and at the end take the house also. We’ll guess what. walk away. after seven years you will get your life back. its time for the bankers to loose money . what can they do with the building. as long as you have your family and job you will be ok. All the homeowners who are loosing home. Have faith in god and keep living. dont let these banks scare you. you do what is good for your family.

I recall lotteries, prices sky rocketing for unknown reasons, and trying to talk me into no interest loans back in 2005 to 2006. I knew it was a gimmick then and now those who bought into this gimmick better not make me pay for it. Its your problem deal with it.

Hey Les,
Jingle bells is NOT a new term. This happened in the early 90’s as well. Do you really write for CNN.com with doing no homework whatsoever? You stink.

And moreover, the banks and lending agencies have been burned before – they should know better!!!
Everyone should walk!!!!!

It is frustrating to be one of the many that still paying my bills on time and in full every month and hear about others getting bailed out on credit cards and mortgages. The last time I checked, buying a home and opening credit accounts were both still done by choice. Walking away from a mortgage is like walking away from any responsibility and its never ok.

You know, there is a third option. Instead of walking away or keep pouring money into an upside down loan, you can renegotiate your loan with the bank.

Get a loan calculator and stretch out your current balance for 40 or 50 years. Take your new payment (amortized for 50 years, but payabel in 30) and that will be your new FIXED payment. If you are really behind in payments, you can say the payment will be towards intestes only for 1 year, after that, the same payment should be applied to principal and interest like any other fixed rate loan.

You can type up the new Note and illustrate the payments on a chart to the bank. Tell them they should take this new arrangement or take the keys – their choice. If they’re smart, they’ll take the new arrangement. They may lose a little up front, but that’s a write off for them anyway. They would rather have a “good” loan on the books than the lousy one they are trying to make people stick to.

In the meantime, your payments go down and you can ride out this market until values go back up. Then, you either sell or re-fi back to a 30 year fixed (if the rates are still low by then). Either way, you keep the house, and the bank keeps your loan, newly modified as current.

A scam is a scam is a scam. Everybody’s guilty. The bankers, builders, the gulible public. Let ‘em eat the houses. Credit scores suffer less from a FORECLOSURE than CREDIT CARDS? That tells you something.

The average person got suckered and the banks will write it all off, give big bonuses, and start the next scam as soon as the dust settles.

Walk baby.

IT SEEMS THERE IS LITTLE SYMPATHY FROM ALL THE COMMENTS ABOVE. WHAT CAUSED IT AND HOW TO CORRECT IT? CHEAP MONEY NEEDED TO FIND WORK. EASY LOAN STANDARDS AN DNOT LOOKING OUT TO THE FUTURE ON WHAT WOULD HAPPEN WHEN THE LOAN RECAST AT HIGHER RATES, CNA TH EBORROWER AFFORD THE FUTURE PAYMENTS?
NOW LETS LOOK AT OUR FEDERAL GOVERNMENT AND ITS BIG BORROWING COSTS. CAN WE AFFORD TO REPAY THE BOYS IN WASHINGTON SPENDING HABITS? IT WAS THE CHANGE IN BANKRUPTCY LAWS THAT FUELED THIS REAL ESTATE INFLATION SPIRAL. THE BANKS WANTED BANKRUPTCY PROTECTION. THEY CHANGED THE RULES TO MAKE IT HARDER FOR INDIVIDUALS TO GO BANKRUPT. THAT IS ONE REASON FOR THE EASIER LENDING STANDARDS.MORE DIFFICULT TO GO BK. THEY THOUGHT THEY HAD PROTECTION AND CAN BLEED CONSUMERS MORE.
SOLUTION: WE HAVE TO REVISE THE BANKRUPTCY LAWS TO MAKE IT EASIER FOR INDIVIDUALS TO GO BANKRUPT AND WIPE SLATE CLEAN.
WHAT ABOUT THE LOCAL, STATE AND NATIONAL DEBT THAT KEEPS MOUNTING BEYOND CONTROL. WHO WILL BE PAYING IT OFF? THE SME PEOPLE THAT WILL PAY OFF THESE LOANS TO IRRESPONSIBLE BORROWERS AND LENDERS. DO WE HAVE ENOUGH PRISON SPACE TO JAIL ALL THESE CROOKS AND LIARS?
JUST LOOK AT THE LOS ANGELES DECEPTION AND ELECTION RESULTS. THE VOTERS GOT DUPED INTO RAISING THEIR UTILITY PHONE AND INTRNET TAXES BY DECEPTION AND FALSE ADVERTISING BY SLICK PROMOTERS, SAME AS LENDERS.
LETS MAKE HOUSES THAT PEOPLE CAN LIVE IN RATHER THAN SPECULATE ON.

Walking away from a declining asset is a fundamental business decision. Businesses do it when they buy out a company and sell off the pieces leaving the workers jobless. Once home-owers get over the emotional aspect of foreclosure, it makes perfect sense. The tide has turned; now it’s the little guy’s chance to stick it to the man. Why should anyone be a slave to particle board box? For the sake of one’s credit score? Ha!

And before someone assumes anything about the rest of our finances; We have good credit, and a car loan of $150 a month is the ONLY debt we have. No credit cards, dine out less than twice a month, no ‘upper’ cable channels, no cell phone bills, ONE car that is rated most fuel economic for the umtieth year in a row, etc. Not even our savings, yes, including the emergency account we were smart enough to create, can help us out of this, only the sale of our house can, which… well yeah.
Rising medical bills, insurance rates, local taxes, and a HUGE market crash in Florida.. could ANYONE have planned for that?

Why not walk away? No one needs to be responsible anymore. Make a bet and loose, just walk away and dont pay! Something doesnt turn out the way you hoped, turn and walk away. Walk away from unwanted children, parents because they have become old and usless, debt, friends. etc. etc. etc. Then hire Clinton or Obama to tax the “RICH” or in other words “the responsable hard working people” and make them pay for it. Its not anyones fault that people dont have ethics, morals, a work ethic. Hey, you can get everything for free. You dont have to work in this society. The Gov will give it to us. Take Responsability? No chance in this country. I hate to say it but I am following the crowd because I am not going to get stuck with the bill. I would rather get the check and have someone else work for it. I am officially joining the Democratic party and will be awaiting my check, food stamps, free health care, NO tax and a free tax refund. Yep, Im walking away from 40-60 hours of work a week, providing for my family, paying debts that I have incurred. Its liberating! I will sleep much better now that I am contributing to the death of a country!

I have no sympathy for anyone who signed a contract for a home without having the sense enough to do some research. Worse yet were those trying to get rich quick. My husband and I were married 10 years before we felt that we were in the position to buy a home. We spent months looking at homes and discussing our financial plan. We ended up with a home within our limits, one we knew was properly valued ( who are these people buying up 600,000 ranches in poor areas of california? they had to know the homes were overvalued!), and was within our means. Why should I or anyone else who had an ounce of sense and self respect, that pays their bills and mortgage on time, have to stand by and watch these people get bailed out of a situation of their own creation? I say use this money and give it as a credit to those of us accepting our fiscal responsibilities. Maybe then we’ll return to a country where pride and morality replace greed and entitlement. In the meantime, our little investment has been paying off. The value of our home has climbed slowly and proportionately to its actual value. Since we bought it as a place to raise a family rather than a get rich scheme, my sense is that when all this mess is long behind us, it will be owners such as myself that will be having the last laugh. Shame on everyone involved in this whole mess.

You should be able to walk away with the shirt on your back and nothing else. Only the greedy are stupid enough to think that prices will go up forever.

What the hell did the lenders think was going to happen? I called this 4 years ago when I was going through the process of purchasing my first home. The broker tried to get me to do an ARM because it “had a better rate.” Screw you lenders, you’re getting what you deserve.

On the flip side. Borrowers, what the hell did you think ADJUSTABLE meant? Did you bother to ask how high your rate could go? Did you bother to ask what your payment would be if your rate were to go that high? Did it not make sense that at a time when rates were at record lows that it just might be a good idea to get a fixed rate? Just walking away does not show a good faith effort; you signed the document, you pay the price. File Chapter 13 or eat the cost of refinancing and REFINANCE!

There is not shortage of stupidity on either side of this. Really sad.

Wait, one cotton pickin’ minute…Let’s get a few things straight.

The only reason there are 30-year loans is because 40+ years ago teh Gov’t. decided to insure them up to 30-years. On top of that, consumers STOPPEd being disciplined enough to save up for a home so they could afford to buy it. USed to men (and women) would pay cash for homes. And if they couldn’t pay it in full they paid down as much as they could afford, but then get as short a loan as possible so they could STAY OUT OF DEBT!!!

And JR in VT, I dunno who taught you, but where I am from your word is your bond. If you don’t have that, ain’t gotta thing. I guess we know how you stack up, huh?

Finally, this is setting the best stage to justify the FAIR TAX Plan. Those of you who like to save and invest (like in property) will love it. Those that want to buy a “used” home will scream for it. Fair Tax lets you have more money throughout the year and lets you choose on what you want to pay taxes. NOt only that, the average 25% that the Gov’t. usually takes, you have to pay on these silly ARMs you all got. I bet you all would love an extra 25% right now, huh!?

It’s simple. If the mortgage puts an unreasonable strain on you and your family, it is your OBLIGATION to send the Jingle Mail to the bank.

One’s obligation is first and formost to their family. The bank comes far down the list. It is always “moral” to put one’s family and the family’s well-being first. Corporate profits are far down my list compared to decent food, clothing, health insurance and education for my children. Sorry if that offends anyone.

what has happened to this country? people have no integrity anynmore. people never accept responsibility for their actions. it is never OK to walk away from a mortgage. a person makes a legal and binding promise to pay the mortgage and follow the terms of the loan. the only people that get hurt in a situation like that is someone who has a home and a loan that they can afford. i am one such person. now, the value of my house is dropping because people (both lenders and flippers) were greedy and got burned. there should be no bailout of these people.

No sympathy for people who invested with an interest only mortgage in hopes of flipping for a profit; educate yourself, because you have no one to blame besides you.

The government should not be responsible for bailing people out because they made a poor decision. Its called capitalism!

People people people, banks extend credit to help People fulfill the American dream!!! Granted the government may be there to help bail out lenders (so what you have credit cards right?) but ultimately the average consumer gets used (qualification guidelines are stricter) by people getting a loan that they couldn’t afford because they wanted to keep up with the Jones’s. Boohoo to those people who walk away feeling that they have been abused, so bloody what? Those people should have never been extended credit or be extended credit ever again bottom line… Ignorance is bliss!!!!!!!

People people people, banks extend credit to help People fulfill the American dream!!! Granted the government may be there to help bail out lenders (so what you have credit cards right?) but ultimately the average consumer gets F**Ked (qualification guidelines are stricter) by people getting a loan that they couldn’t afford because they wanted to keep up with the Jones’s. Boohoo to those people who walk away feeling that they have been abused, so bloody what? Those people should have never been extended credit or be extended credit ever again bottom line… Ignorance is bliss!!!!!!!

It’s easy to judge homeowners on making stupid decisions, or automatically assuming everyone in peril must have an ARM or some other non conventional loan.

There are also people like us – we bought our first home 3 year ago, at the height of a booming (top 10) Florida real estate market. We got pre-approved, took out a VA loan, were smart enough NOT to buy a house for the amount we got pre-approved for, but for half that, what we actually could afford.

2 Years later, my partner’s (breadwinner) company is experiencing unexpected layoffs. Presented with a choice: get laid off, or get transferred. With a sagging local economy, unexpected medical bills, we choose the latter, and move out to the midwest.

We put the house on the market, knowing it’s tough, but within a month, things get even rougher, and the area we’re trying to sell our house in, is listed in the top 5 worse markets with a 30% depreciation rate.

4000 homes for sale in our county, 60 sold a month. Our initial list price had to be lower than what we owed. We’ve lowered it 4 times since then, even offered to pay all closing costs, which – those are the only offers that are being taken. Still nothing.

We have a little bit of ‘luck’ having a VA loan, which allows us to short sale the house and the VA will pay the lender the difference (up to certain percentage of appraisal value).

We’re running out of money – what are we supposed to do? Rent it out? That would have been ok, even with rental income covering only 2/3 of our mortgage payment. But with insurance cost rising (doubled… our original home owners ins. doesn’t cover vacant homes, because of fear of vandalism. Only ONE company would insure our house), as well as local taxes increasing rapidly (loosing homestead)… it’s getting really really tough.

And we’re not the only ones…

We still have not even started to get a handle on the so called investors out there. Here is how bad it has become. With a 680 credit score you and your wife could go out and buy 10 investment properties for sale by owner, maybe even call a couple out of state 2nd homes. Find people that need to get out quickly. (ie. house appraising for $150,000 guy wants out for $100,000.) They are all over the internet every FSBO site has them. You then arrange with the seller to give you cash back after closing. Finance them to 90%LTV So the actual sales price would be $135,000.00. If you did it ten times you would have roughly $350,000.00 to walk away with. There is something wrong with the system when you can get away with that. Until those scenarios carry hefty fines and or judgements as the one gentlmen said earlier we have a long road ahead. If everyone were so unethical, the banks could not keep up. Let’s hope we gain control soon.

Jingle mail was coined some time ago. Remember the late 80’s early 90’s. If you can afford it, now is the time for you to buy it.End Of Discussion!

When is it ok to walk away? It is ok to walk away BEFORE you sign the loan documents! I was a loan officer for 3 years during the boom. I TOLD EVERY PERSON who wanted a sub-prime loan what the risks were. They all wanted homes that were above their price range and/or credit rating. They figured that the market was strong and their homes would keep their value allowing them to refinance to a 30 year fixed if they improved their credit rating during that time. When WE gamble, we shouldn’t expect SOMEONE ELSE to cover our losses. That said, the BANKS gambled as well. Usually they win big on home loans, this time they lost. We are all smarter from this costly experience, me included.

I think it’s OK to walk away for those unsophiticated borrowers. The banks and mortgage companies have become too greedy and fails to practice prudent lending. It’s time for them to get punished. Fed could not get away from being blamed as it has also failed to keep banks and lenders to do business the prudent way instead of betting other people’s money in the casino-like market. End of the day, banks and government have to pay for their failure, not ordinary taxpayer.

i think i consider to do the same thing walk away

It is the BANK MISTAKE that we came to this situation.
The gentlemen like many others were caught in this freenzy buying with no money down or using 80/20 interest loan only.
The house boom was a bust same like the dot com bust.
So many people are caught up and it is sad for the seller but happy time for the buyer.
I am shopping to buy a house that now I can afford. I am offering $100K less take it if not I move on to the next one. I’ve seen sign reduced posted all over and no buyer.
Again it is the BANK mistake and not the consumer.

My bet is that most of the people walking away from their home are liberal losers who were never taught to take responsibility but instead rely on papa government for another handout.

It’s easy to get caught up in buying a home. Both parties, the lender and the buyer has a responsibility. Most people don’t know the future and most people don’t make a big salary. It will all pass, but the lending institutions need to stop being so greedy and help out those who have legitimate financial issues. They will get their money and then some when it is all said and done anyway. I’m sure better than half that are responding to this are not as righteous as they appear. It’s too easy to criticize others.

I have walked away from my home already. They gave me 2k just to walk away from it. I run a company on fixing people’s credit now. So I am just waiting for home prices to fall. No way would I pay full price for somthing when i can wait and buy it on sale!! CMI=Credit Managment Inc. CMI321INC@aol.com If you need help with your credit..

Self-interest has become the name of the game. Nobody put a gun to lenders collective heads forcing them to lend money to would be house-flippers without any money down and re-set provisions making the future viablilty of those ARMs dependent on the presumption of ever escalating market values. Recent changes in bankruptcy laws make it much harder for people to ‘walk away’ from most debts, yet, they can – in many circumstances, ‘walk away’ from real-estate.
After all, no reasonable risk manager / person could expect the exponential rises in property values to continue – forever. The writing was on the wall when programs like ‘Flip This House’ started to appear on television. If ‘everybody’s doing it’ – it’s either the beginning of the end, or, the end’s in sight / it’s too late to get into the game. Eventually all pyramid schemes collapse.
The politicans created trade policies that fostered either out-sourcing and/or off-shoring of formerly and/or would be American jobs. Our trade policies are absurd! At the same time the emergence of China and India have created global demand for energy, food and commodities on an unprecidented basis/scale. With OPEC’s collusion, the price of oil has put airlines into bankruptcy and all goods that must travel – as well as the verticle supply chain{s}, have experienced inflationary pressures. At the same time, the US Treaury’s answer to all of our woes has been to print more Dollars {yet another inflationary motivator}. Foreign goods are getting more expensive and our national deficit is growing exponentially. No ‘fix’ to Social Security, Medicare or other civilized benefits of society are being moved forward, yet, steps backward {like our trade policies} undermine organized labor and both the working and middle classes {regardless of the color of their collar}. ‘Trickle-down’ economics leaves many being trickled on.
Adding in the blunder of Iraq to the formula of despair and the financial picture of America becomes bleak indeed. With ‘the system’ failing so many Americans, is it any wonder that people are choosing to / being left the only viable alternative but to ‘walk away’ from their property{s}?
As the US Treasury pumps more and more of taxpayer’s Dollars into bailing out the banking and financial services industries one cannot help but wonder why – yet again, it’s the American taxpayers that are bailing out businesses who pillaged when the getting was good and are now going cap in hand to the government – ‘our’ government, to bail ‘em out. Since the social contract of the government with the people has been breached and it’s become an all for one and one for one society of haves and / or have nots, by all means ‘walk away.’ Heck, run away. Those who were fiscally conservative, who paid 20% or more down on their homes are now being rewarded with decreasing home values, increasing real-estate taxes, increasing user-fees for services no longer supported by tax revenues and public assets {bridges, roads, lotteries, etc} that are being sold off by government entities to meet near term budgets, to satisfy the results of their incompetence, of the bloated patronage payrolls and more of the same. It’s time to face facts. America is – essentially, bankrupt. We’re spending more than we generate in revenues and we’re adding on more and more debt-loads {personal and governmental} every day. When the entire ’system’ fails – as it surely is, the social contract / obligations that were formerly the rule of law are no longer applicable. Yes, you might was well ‘run away’ from your real-estate – in many instances; after all is said and done, it’s the same as Wall Street, the Federal Reserve and the Treasury Department are doing. Halliburton’s moving to Dubai. Most formerly ‘American’ multi-nationals are now trans-nationals with no loyalty to America – until/only when they need our court system to uphold their copyrights, patents and/or trademarks do they wear their the red, white and blue.
Will the last one out please turn off the lights?
Sure, why not join the exodus? It was a nice run – while it lasted, but, we’ve become a nation that is morally and – quite literally, bankrupt. Pity.

I have never seen so many comments to an article so quickly.

A couple things that haven’t been mentioned much here: (1) As more people default, walkaway or otherwise, and prices drop expect lenders to demand a bigger downpayment. That is already happening. It’s going to make your kids wait alot longer to get into a house if they need 25-30 percent down. (2) Stick it to the banks? YOU are the bank if you have money in a pension fund holding any bank stocks or any of the paper that is now being written off. This is coming out of everyone’s pockets not just some bankers. YOU will pay for this in poorer IRA, 401K, pension performance etc.. Look at what has happened to your retirement account already because of the 20-60% drop in financial stocks. There is blame to go around in this deal and now we are all going to pay.

I double over with laughter when I hear people blaming Bush for this latest crisis. I have no sympathy for people and lenders who enter into these get rich deals and get caught with their pants down, Why should they get a pass. Get real and be responsible!! The majority of us do.

in florida they are giving condos that cost 190,000 full furniture all rooms a year no payment free for a full year and no down payment and the person has a lousy credit and gets 900 a month from social security no other moneys i know his a family member.

Nobody put a gun to anyone’s head to buy a house. It is time for people to learn that they must be accountable and responsible for their actions.

Only when sanctions are applied to a behavior does it stop.

If a person signs a contract, they should live up to it. Both sides.

That lenders did not do their jobs…let them suffer losses, too.

Reward competence and punish incompetence for a change

Well, this is expected to happen, there should done be any suprise at all to the lenders that those zero down buyers are walking away if price is going down. lenders are willing to lend money without proof of income,asset and zero down payment or NINA, SISA loan program then of course Foreclosure is the result of it. If they do not come up with those non sense loan progam such as NINA, SISA…then price had not go up crazy in the last couple of years because not many people are trully qualify to purchase the house. The only way that they could qualify for a loan is too lie…

Buying a home is just another business decision. If “walking away” or filing “bankruptcy” is what maybe right or needed for your financial benefit,then just do it. Millionaires, business owners and corporations do it whenever the situation is right for them to do it. It’s just part of the rich man/ poor man game.

I have seen this coming for some time now. We as a people have been corrupted from the head down.

Our leadership in government, including and especially George Bush have by their actions given license to us as citizens to also be irresponsible.

Need I list the ways:

George and his leadership team have walked away from:

Fulfilling their duties to serve in the military (Bush in the National Guard, Cheney with multiple deferments).

The corporate-owned Supreme Court walked away from its supposed bedrock belief in States rights to remove Florida’s right to allow the recount to continue so that the actual winner of the 2000 election was allowed to take office.

They walked away from their constitutional duties to protect us from 9/11 when they were warned that an attack was imminent.

They walked away from New Orleans.

They walked away from the middle class by off-shoring jobs for corporate profits and their stock prices and bonuses.

They walked away from the middle class by cutting taxes in 2001 and 2003 that effectively redistributed over $10 trillion to the top 2% of the super rich.

They walked away from our nation’s reputation as a symbol of hope – now we start pre-emptive wars, we torture, we keep people imprisoned for years without charges or a hearing before a court of law.

Walked away from our constitutional rights to privacy, to obeying the laws already in place for conducting surveillance.

They have walked away from allowing our constitutional government to function as the Founders intended with Congress having equal rights and acting as a check and balance on the Executive.

Walked away from telling the truth.

Walked away from equal protection under the law – pardoning Libby for his felonious behavior.

Walked away from fiscal responsibility. Our government now owes over $9 trillion.

Wants to walk away from the committment to pay retirement benefits to millions who have paid into social security for decades.

I could go on.

We the people don’t exist for this government. Lobbyists and CEOs set policies and make our laws, to their enrichment.

Good Christ people, do you have to be reminded that about 90% of your house payment is interest going to these richest of the rich who have corrupted our nation??

You’d be a fool to pay their interest on their obscene 30 year amortized loans when you could take that $100 or $1500 or $2000 and instead use it to pay down debts you have a realistic chance to see eliminated, like credit cards.

The financial system as we’ver known it is over. We are in meltdown mode. Its a nasty metaphor but a nuclear chain reaction has been detonated and we are the terrorists.

at 13.5 % interest, this is moral issue. I have held on as long as possible, i am done

It is OK to walk away if you cannot pay, regardless if you are investor or consumer.
“Walker” take punishment on credit report and lender take loss on risk.
It is no one’s fault, this country is aggressive in building wealth. And we both went down today and lose money, we will come back up tomorrow. Sun always shine in America.

Dead-beat is right! These ‘investors’ took a gamble. It’s time to settle up baby!

When is it okay to walk away from a financial obligation you willingly made??? NEVER! What has happened to personal responsibility in this country??? It must have gone out with window with civility. What a sad state of affairs. Too many people have no respect for anybody or anything anymore.

Yes. It is.

My opinion – prosecute walkaways as theft. It’s no different than a con man taking money from the lenders. There’s a binding contract, so there’s proof that the transaction happened. If you want to prosecute lenders for usury, that’s acceptable too, and does not pre-empt prosecutions for theft – some of those will likely result in not guilty verdicts if the usury cases pan out. The alternative is that confidence in the dollar and in rule of law in the US erodes worldwide. Does the verbiage on the dollar bill, “for all debts public and private,” and the full faith and credit of the united States mean so little to you that you will refuse to enforce the law of the land?

I totally agree with the comments
Posted By JR, Burlington, VT : February 6, 2008 9:03 pm
That is the whole point! The house was the collateral and that is the contract. Meaning, the bank gets the house if you default. End of discussion. The bank knows the risk. The consumer can walk away at any time. So I agree with Mr. Burlington. What part of collateral do you not understand?

I have a new slime ball catgegory — the real estate agents. In Los Angeles they are so used to flipping assets with little work they have no idea how actually sell a home. This down turn is different however; now they will have to compete with the internet for faster less expensive transactions. This is an area that is desperate for restructuring.

Walking away is precisely the thing people should not do! For those who gamble on risky loans and a volitle housing market must face the consequences when the market bottoms out and enjoy the rewards if/when it improves. Take responsibility for your actions for better or worse.

I think these creeps get exactly what they deserve. Trying to capitalize by flipping houses which only causes prices to rise for those who are not able get a first home at a reasonable price while these greedy slimy pigs rip everyone else off causing excessive housing prices. I hope all these scumbags go broke and lose everything! Damned greedy asses deserve exactly what they get for trying to rip off others. To HELL with all these flippers! May they ALL rot in HELL for their greed!

It is never “ok” to walk from a mortgage. A house is a place to make a home and should not be considered an investment. This is what the current generation has been lead to believe… buy a house and it will make you money. Well, how about buying a house to live in and create a home, regardless of the “growth potential” of the investment? Wake up America… buy what you can afford and save a little. Don’t expect the government to “take care of you” when you default.

If your house has falled 20% or more and the payments have risen to a point that it’s affecting your health/ family etc. , then definately it is worth it to walk away. Your credit rating isn’t worth losing either of those two things. The banks need to pay for being so greedy that they were willing to accept loans for people who had no way to pay. They knew it and took the commissions anyway in order to resell these bad mortgages to overseas investors. They and the Federal Reserve are ultimately to blame.

You make a promise to pay and then don’t like the deal and just say “it’s off”. Yeah, like anyone would accept a contract under those conditions. The borrower needs to man up. Taking chances and over borrowing cannot be blamed on the lender everytime. I wouldn’t borrow more money than I could afford to pay back. I guess these people would rather be considered stupid instead of stealing. It’s ridiculous.

Walk away, but don’t plan on coming back for another loan anytime soon….

Of course people are going to do what is economically best for them, irrespective of what they contractually promised to do.

It’s tragic that Congress has made walking from a mortgage an easier decision by eliminating the tax on debt forgiveness. Too bad for the dead beat’s neighbors.

I have no sympathy for real estate speculators. They assume prices will always go up and the frenzy created the insane prices that had no where to go but down.

Take the good with the bad! Pay your bills.

There are so many companies that are taking advantage of this unfortunate situation. I had a friend whose house was about to be foreclosed on and they got some literature in the mail called FreshStart out of Florida. It stated that she was eligible for a loan and a fresh start to save her house. She contacted them in good faith and they took her information. They told her that she could pay $1200 and get refinancing. This sounded really good to her because she wanted to keep a good credit score and get that “Freshstart.” Of course she was desperate to save her house so she borrowed the money and wired it to them. All they did was contact her lender and strike up a deal. They then contacted her and told her that she would need to pay $1700 in order to save her house. This was devastating to her and she did not have another $1700 to send. She then in return contacted the lender herself and bargained with them for half the money the company told her which was $1700. She later contacted the FreshStart company and called them on their false advertisement and she was refunded her money.

O.K., now do you understand how a person can get taken advantage of. Like I said before, if you have that perfect financial life, then you should be very thankful. When you feel like giving back, I can be where you are.

Entirely the banks fault. Not to say that borrowers dont have culpability, but the banks enable the borrowers not the other way around. Buckle up America! Its time to pay the piper. Money is debt(credit). Credit is now contracting big time from where is was in the last few years. If you dont know what this means you need to go and look up the word deflation.

Honestly… I am sick and tired of hearing so much negative crap! Look, WE, Americans need to take our lumps and get over this. We need to start fixing this and some of the stupid things that we (I mean everyone) have created. It is no one else’s responsibility but our own. We have allowed ourselves to want more, more, more and faster, faster, faster. We as Americans focus more on emotional finanical decision rather than sound financial principals. Get a grip, we are doing this to ourselves!!!

I agree with the below statement, well said!

“DEFINITION: COLLATERAL: Property that you pledge as security for a loan that is given up if you default on the loan.

The bank isn’t left empty-handed. They are left owning the property you financed through them. PLUS they keep all the interest and principal you have paid them up to this point.”

Sometimes its a smart business move to turn in the collateral. I got lucky and sold my properties in late 2005. If I would not have sold them, I would be considering returning the keys to the lender.

Walk away. It’s dog eat dog out there, the American way.

Buying a home is a contract. For them to just walk away is absolutely revolting to me. Maybe they can open a brokerage account, buy stocks on margin, and then just tell the broker that they aren’t paying because the stock has gone down. I have no sympathy for any of the parties involved. Do they think houses always just go up in value? Home prices fluctuate just like anything else. If they weren’t smart enough to read the fine print on their mortgage, that is their fault, and if they couldn’t afford the house they shouldn’t have bought it. These people are going to create a problem that is going to affect everyone in this country and I hope they instate laws to prevent this, or at the very least penalize them strongly for it. There is a limit to the losses you can take on your taxes for stock market losses, and for them to just be able to walk away from this kind of commitment with a slap on the wrist is really wrong.

When you are $75,0000-$100,000 upside-down on your home’s value (which is beyond the consumer’s control) and you cannot refinance as a result of this, and you have a Libor loan that is dictating negative amoritization, building up each month, THAT is enough to influence you to decide to throw up your hands and walk out of the mortgage. There are other pertinenet circumstances for not paying a mortgage these days, and it is my opinion that the GOVERNMENT should be stepping in and providing more guidelines, and perhaps MANDATES that need to be followed by BANKS and CREDIT BUREAUS in order to balance the state of affairs in the slumping housing market. This is a huge issue now, that is being ignored by our leaders in government. This country WILL go into a recession soon as a result of the government’s NON-ACTION regarding this country’s housing crisis! WE NEED TO BE RESCUED!!!!!!!!!!!!!!!!!!!!!!!

It is almost certain that I will be stuck walking away from my house or filing bankruptcy. I don’t want to. I was raised to be accountable for my responsibilities.

I got a “stated income” loan due to my business. I had already budgeted and knew full well that I had enough monthly income to make my mortgage payments and I had the recommended two to three months payments in reserve.

Unfortunately, within a couple of months after signing, 1/3 of my income disappeared as customers began having problems. Several months after that another 1/3 of my income disappeared as more customers began experiencing major slow-downs.

I started making phone calls to my lender. I discovered that selling out would be more of a loss than I could absorb. So, I began hunkering down, cutting expenses, and making preparations to winter the market. During this time I also investigated other options which would allow me to continue making good on my debts, but everywhere was a dead-end.

Finally in November of last year I began the process of “Mortgage Modification” with Countrywide. Now nearing the middle of February, this process has made absolutely NO head-way. My reserves were exhausted months ago, and this month I am officially in the hole and making decisions on who gets paid on-time or late. I must pay my credit cards on-time or face increased interest rates, and my health insurance must be paid on-time or I lose my coverage. Fortunately I have other bills, mostly services, which I can pay up to about 20 days late (local phone service, cell phone for the business, car loan, and a couple others,) but as soon as those are paid the process starts right over.

Better houses than mine in my neighborhood are unable to sell for less than what I owe on my house. Every month I ask myself “what am I going to do now?” Luckily, in a previous era in my life I was a college student, so I am tempered against eating Ramen Noodles all the time.

I am hoping that I can continue this month-to-month horror, while bringing in new customers, reaching into new markets, and trying to replace income lost to the economy slow-down and state budget deficit.

Some of your comments are unbelievable. It is so easy for everyone to sit back and judge others. I don’t think that a person would purposely leave their homes if they didn’t have to. If you do your research many people have heart attacks do to financial stress. I wished my relative had walked away. He had a massive heart attack and was unable to work. This caused him to have to go into foreclosure. He contacted his lender in hopes that they would lower his payments in order to compensate living off his wife’s income until he could get some type of assistance. They would not agree to. So yes they deserved to take the hit off of foreclosure. Many bill collectors act like monsters and heartless beasts. If they have it going on, then more power to them. Don’t be all sanctimonious towards everyone who hasn’t been so fortunate. If you haven’t had to go through this, then consider yourselves blessed. I think a person should search themselves a do what ever is absolutely best for them. Of course I don’t think the average person would purposely lose their homes and strip their children without due cause.

I strongly feel that the lender should have at least gotten some Dr.’s statements or something in order to accomodate this situation.

There are many reason’s why people do what they do. So don’t be so judgemental and act as if you are so perfect. If you don’t have financial problems, then help someone who does. Had I known the problems my relative was going through, I would have tried to help before he lost his home. I know he was trying to do the right thing. His statement was, I can’t get another life, but I can get another house.

I agree completely with Roy from Knoxville, who just posted that these people are deadbeats who acted irresponsibly and shouldn’t get a bailout.

I feel much more sympathy for people buying a single home and not understanding the mortgage terms, but even then, I think a lot of people just were too optimistic about the value always going up and the rates always staying low, allowing a perpetual refi. Absurd.

You signed a contract obligating yourself. The tuition for life experience is expensive. How utterly embarassing to renig on a deal you made. Congratulations, your word means nothing. You cannot be trusted. What shame you should feel.

But alas, you live in America. Who cares. Buy another CD, re-learn how to flip those houses for fun and profit. You must not have gotten the full version. You should sue them for false advertising.

Poor business decisions should not be rewarded. If I were to lose money on a stock investment, the brokerage wouldn’t forgive the difference. These people should have to pay the price for their poor decisions, and the banks should be ashamed for even inventing such retarded products as 0-down and interest-only mortgages.

It is never OK to walk away from a commitment. You should never buy a home that is more than you can pay for in the first place. The flip side is that lenders that make interest only loans are crooks. When my wife and I began as homeowners about 25 years ago, getting a mortgage was like pulling teeth, now, my dog could get one.

Most people that find themselves in this predicament to simply walk away from their homes and their mortgages are just Good People, with Bad Loans. Unfortunately, they walk away because they do not know that there are companies out there that can help them. Companies that can help
stop a lot of unnecessary foreclosures from even happening.
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we ALWAYS find violations and irregularities that warrant more investigation. That means that the lenders did not do their homework before issuing the loans.
Homeowners were not provided disclosures that reflected the true nature of the cost of the credit, nor the negative aspects of the loan to the extent that an applicant would have conscious awareness. A lot of these violations may even give the borrower the
RIGHT TO RESCIND their loan. Their main focus is to keep good people with bad loans in their homes. They focus on getting that sub prime borrower a new prime fixed rate loan as part of
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walk away, fight back. Visit ARMaudits.com http://www.armaudits.com

Wait, eating at McDonald’s could make me fat?

Smoking cigarette’s could give me cancer?

An adjustable rate mortgage could adjust upward?

Yes, walk away – maybe you will lose the 50 lbs you need to lose and get some much needed air into those lungs which hopefully can get some much needed oxygen to the brains of yours for not understanding your responsibility.

being in the mortgage industry, I have seen the negative impact it has on one’s ability to attain financing in the future if a foreclosure is shown on credit. It is just as bad, if not worse, than a bankruptcy.

I bought my house with my husband 10 yrs. ago. After we divorced in 2006, he lost his job. I had to refinance to lower the payments so I could afford it. In July 2007, I tried to get out of an ARM we had on the house. I called my mortgage company and they told me to wait until September 2007 because I had prepayment penalties attached. I called them back in September, and they told me that they couldn’t do anything for me because my house was now worth less than what I owed. I am still trying to hold onto my home, for my kids. But, I do feel myself sinking in the hole.

Its really bad when families get that strapped for cash that they cannot afford their payments. A lot of us have both parents working over 40 hours per week trying to make ends meet and barely getting by. Then we have they knuckleheads that have no sympathy for those who are not as fortunate and are even close to getting by. Healthcare, low paying jobs, and sometimes very little financial help available for children’s education, let alone our own education.
Now the KICKER…We have corporate America and foreign owners that cut our healthcare, kill our pension plans, shutdown our companies and outsource our jobs and file bankruptcy, chapter 7 / 11. These corporate #ssh@l$s should be the ones going to prison and should make the people they screwed whole. Look at the Enron case and others. I look at my pension and how it is no more. My healthcare is being raped.
American & Forgeign companies should not be allowed to shutdown the businesses they purchase in order to create a shrinking supply in the market to help them raise the prices of their products and not be given any tax breaks, etc. But business as usual, will give them that regardless of how many forclosures there are out here. Even in our small town the local paper is full of foreclosures. I blame Corporate America for this recession we are in not the small guys on the bottom trying to raise their families and trying to give their families a quality lifestyle.

I’m currently faced with the dilemma now of having a mortgage greater than the property value. Since the whole foreclosure fiasco has happened the value of my property has gone down by at least 10%. Since I have only lived there less than 5 years, there isn’t a lot of equity built up. I’ve been trying to sell it, but I cannot afford to drop the price to meet the current market conditions. I have actually considered walking away from my property. Not because the payments have gotten out of hand ( I can well afford the mortgage, it is a fixed rate) but due to my frustration with the market right now . I’ve been trying to plan a future with a special man and I’m just feeling “trapped” in my own home and the victim of what has transpired in the mortgage industry. I think the problem is folks who were uneducated in their decisions who will see this as their scapegoat. It is unbelievable that a foreclosure would remain on your credit report less time than bankruptcy. For now, I’m going to ride out the storm and hopefully the market will turn around.

There’s no simple answer. You need to do a cost benefit analysis and decide if the money you save by walking away is going to be worth the hit to your credit.

I don’t think there’s anything morally wrong with walking away, although the banks sure want you to think there is. Banks lose money on loans to failed projects all the time. They should have done their due diligence and refused to extend these ridiculous loans.

I have to LOL at the knee-jerk judgemental commentary of people who are not educated about what this crisis is really all about and are ready to condemn homeowners ready to walk!

You hold on to your self-righteous indignation about people who refuse to be YOKED to an unfair system while those of us in that group make the decision to get on with our lives.

THE BANKS WILL ALWAYS SURVIVE! Maybe the banks and legislators will think a little bit harder before assuming ALL Americans will behave like good little sheep no matter what they throw at us…

as an expirienced investor in California, i can understand most angles and points of view. however perspective plays a major factor in decissions made. let me first address all the home owners that are upset due to loss of equity. if you didn’t purchase your home during the market boom or cash out your home then you have not lost anything. equity is an abstract concept, it is immaterial, if you don’t use it you don’t have it. in other words if you never pulled money out of your home does it matter if values are up or down? if anything you could have your home reassessed at a lower value. if you plan to retire sell your home and move away, well obviously you’ll try to sell at a high point in the market.

next i will address those who have bought recently. if your planning to walk away make sure you know what your doing. in california for instance it is considered a trust deed state, what this means is that your loan is secured by the property. in theory if you are foreclosed upon it affects your credit but the bank can’t come after you for the defecit if there is one. in other states like new mexico these are mortgage states, this means that the bank can come after you for whatever defecit there is. i don’t know if bankruptcy will get rid of this debt in these types of state. ask yourself can you really afford to keep this house? if the answer is yes and your family (wife, husband and children) love the house then keep it. if the debt is keeping you up at night and causing problems then walk away. do not feel guilty. don’t let those who are “playing by the rules” make you feel guilty. first you have to know what the rules are. remeber the golden rule “he who has the gold makes the rule”. if the rules say you can walk away then walk away after all those are the rules!

finally i will address the group who has not purchased yet. if you can buy your first home do so make sure you get the best possible deal and educate yourselves on the home buying procedures before actually buying. it is a buyers market right now. what the rates will do in the years to come i don’t think anyone really knows for sure. just don’t get in over your head.

p.s. to all investors well the shopping spree has now begun. happy hunting and good luck. “in the spirit of the olympics let the games begin!”, my personal favorite quote.

It is never okay to walk away! Like the old cliche, nothing in life is free. I do not hold the lenders entirely responsible. They have a business to run and they are in the business to make money. It is up to the buyer to do their homework. The buyer should check out the lender, compare with other lenders, etc. This country seems to be stuck on stupid when it comes to being responsible. Everything has a price. If you make poor choices, you will likely pay a higher price.

No one walked away from their properties when value was going up – and when it was going up, you couldn’t read an article (including here at CNN.com) that didn’t promote home ownership, or where were the best markets to make fast money were and furthermore, where to borrow the cheapest money – despite credit. Their “Real Estate” section was full of it (literally and figuratively). Now that property values are going down (which is a natural part of our economic business cycle) and the borrowers who took out these loans (emphasis on “borrowers who took out the loans”, I’m sorry, no lender forced a borrower to take out a single one of these loans – NOT ONE) are faced with the reality of actually being responsible for paying it back – let the finger pointing begin (of course far away from the truly guilty party)!

Musical chairs isn’t fun when the music stops and you have no place to sit. But that’s what happens when you play musical chairs.

Perhaps the media, including CNN, should be less cavalier in their journalistic recommendations and reporting. People will get smarter with their finances because they won’t want to go through this again. Banks are already smarter because they aren’t lending to deadbeats anymore. But the media will continue to fan the flames of the good when things are good and the bad when things are bad.

Give those empty “walk-away” home to the Iraqies and the Afghans that your war machine destoryed.

well, I don’t think that they will move in anayway ….

Lenders were reckless….No regulatory or governmental supervision. Speculators made money and became arrogant. The party is now over but are we learning any lesson for the future? Worthwhile families who need shelter, should be helped to keep their shelter. But those bankers/lenders should pay for the difference in the value of the foreclosed properties…find a way to lend them $$$ out of their future earnings -before stockholders and directors. They were greedy and in a free market they should be allowed to fail if it were not for the side-effect for the rest of us.
The likes of Greenspan should not be allowed to profit much from their speeches n books….What good do they have to offer other than apologies for goofs and misplaced trust.

“WALK AWAY” what are you going to do lose sleep maybe even get a divorce or worst have a heart attack?? It’s is not worth the headache live there as long as you can, the banks have so many forclosures they can’t keep up with the work load. So you ruined your credit get it fixed for 1k get good scores and buy again HA HA for all you haters that are paying on a loan where you owe more than it’s worth by hundreds of thousands of dollars. Have a good night and make sure you don’t lose any sleep let the haters lose there sleep afterall they are the ones losing equity by the day..

Zeus, nice simple post. I would add walking away from a commitment you can keep with a little integrity is immoral. There is a group of people who simply do not have the choice to make because of illness or other sebacks

Let’s see I go in to buy a house and sign these papers then it goes to hell and I say I’m outta here, I got a house that I know I can’t afford but I was just gonna turn a fast buck ya know I was like gonna sell in a year or two when it went up a 100,000 or so. Man I didn’t plan on this. How about taking his car, his toys, furniture then letting him go. You planned on making a quick buck but got burned so now I’m gonna lay it on someone else.

we started into this recession in early 2006. the sooner washington and wall street admit to the fact the sooner we can all go to work getting out of it. the real estate business created a monster and it turned around and ate them

Blaming this decision on the creditor makes no sense. The banks were partners in these deals. They made good interest and receive many fees. They hired and chose the appraisers who valued the property. The were in the best situation to judge the property value. They hire full time experts to do that and with the volume that they handle, they know more than anybody. So, why should working people who got sucked up in the frenzy the banks created be punished and ridiculed. You people who criticize them crack me up. Many of you are not self-made, pulled up by your own bootstraps folks yourselves. You forget that. I say – let the banks reap what they sowed. They get a tax write-off for this mess. Not the home owners.

Say what you want. The fact is that people who can game the system make money and live a good life. Is it dishonest and unethical? Of course it is! But who cares! This is capitalism!

It’s not OK to walk away – you owe the money so pay it. If you can’t, then you should not have the privelege of a future mortgage or credit.

Those that gambled trying to flip a house should be be forced to liquidate their holdings and pay for their debts, even if it means doing a cash out refinance on their primary home. Hey – At least interest rates are low you morons.

I work in this business and “Roy, Knoxville, TN” below is correct. These “get rich quick” schemes or the “I want more than I can pay for so I will lie to get it” schemes should have consequences, for both the lenders and the buyers. But I can guarantee you that most of these “sob stories” you hear about involve people making seriously unwise financial decisions to begin with and most likely they committed some sort of fraud to do so.

I see people making unwise decisions on a daily basis. These are the same people that politicians and other “bleeding hearts” complain on behalf of when a lender refuses to give them a loan. The lender is damned if they do and damned if they don’t.

What they don’t show you during one of these “humanitarian” stories is the loan application. People lie in order to qualify for a loan all the time! CNN did a story on Sunday on television about a lady that bought a $700,000 house while making $35,000 a year. They didn’t tell the whole story because there is not, nor has there ever been a loan, where you can get that kind of a loan and prove that you make that little. It just didn’t happen the way they say it did.

Oh and for those who don’t know that an “Adjustable Rate Mortgage” adjusts… well you are not smart enough to get a loan in the first place. These people had the option to get a less risky fixed rate loan and chose not to because the rate was a little higher. They took on the risk for a lower payment.

You can only do so much to save people from themselves. You can’t forgive bad behavior or it will continue!

By the way… banks loose money on foreclosed properties. The houses are rarely worth the loan that was given out at the time of purchase when they are sold. Banks tend not to like loosing money. They definitely don’t do it on purpose.

Fine. Walk away. What do you care about the legitimate investors and taxpayers who will have to bail you out of your greed or ignorance? That’s our free enterprise system, isn’t it?

I think this is “GREAT” the rich greedy republicans came up with a way to rip off the little middle class working people. The republicans as usual wanted a way to get richer on the backs of working class people. So they devised a way to charge huge interest fees by having them go up every six months to 12 months. That way they could continue to live the easy life without putting forth an honest day’s work. Well it is coming home to haunt them in a big way, as well it should. They too are loosing their homes as they should. (They of course don’t think that is good.) But I love it. Trying to, make themselves rich off of the little people. The Banks and Lending Institutions willing to them help out. Well with all these foreclosures on everybody’s credit report. Who will they get to sell any more automobiles, homes, boats to? They wanted to get rich quick too so now lets see where they will be able to lend their money. Maybe the China government will borrow from them at reduced rates. At least they will be able to lend money to someone just not Americans. Because we all now how willing they are to lend to people who can not pay their bills.

This country rose to greatness on the adage that, “My word is my bond.” Unfortunately, now people want to say, “I’ll take your money, promise to pay you back, and if I can’t…I will walk away.” What a shame to see how low our standards have become.

I worked very hard after bad health and layoffs to keep my credit rating but certain lenders have policies that are absolutely inflexible if not cruel and extremely shortsighted. That ruined my credit over just a few dollars despite good faith effort on my part (I was a teacher at the time.) Now I have been laid off. I have a two-week window to find a job or go past the point of no return on the mortgage, which is a very reasonable 5.8%. Despite the news of lenders being willing to help people, it’s a farce really. By mid-February I have to decide to lose virtually every penny I have or walk away with some cash to survive. It really isn’t a choice. Lenders are still demanding blood from a turnip and offer only token voice-mail help. I’ve had this house seven years, the lender has made a very good profit already. They want more and are willing to toss it all over a few dollars and a few days late in payment. There is no flexibilty, understanding or humanity in business anymore. I end up financially ruined beyond recovery — at 57 — and they have a house they can’t get rid of any time soon. Isn’t that brilliant policy.

We bought a house in Houston in Nov 2002 for $106,000. Loan based on combined income of $6000/mo. I lost my job ($3000/mo) 4 months later. Had no luck getting comparable salary. House note originally was $1068/mo (total). By Sept 2005, it had gone up to $1753/mo. Adjustable Rate Mortgage (ARM). We simply could not afford it. That’s not taking into account the $500+ electric bills every month. So, we walked away in Oct, 2005. Mortgage company (Homecomings) would not work with us, would promise to find a way to help us, but they never did. I spent HOURS on the phone trying to get help from them, but they wouldn’t respond. I worked for a mortgage broker and he even tried to find someone to re-fi the note, but even back then the slump was starting and no one would touch it. Didn’t help that we’d been late with the note, but it was a choice of feeding the kids and keeping the lights on or being a week to ten days late. So, which do you think we chose to do? I regret walking away, not for the house itself, but for our credit rating. I wasn’t raised that way. But guess what? It’s now early 2008 and our credit is better than it was when we bought the house! We bought a car when the old 1988 gave out, and had no problems. I don’t advocate anyone walking away just for the hell of it, but sometimes you have no choice. We’d have lost it anyway!

My wife and I walked away — from the USA.

We had a house that we loved, on top of a hill in San Francisco, with a 180-degree view over the Pacific, across the Golden Gate shipping channel and north to Mount Tamalpais. Bought it for $699k in 2002, sold it for $925K in 2006. We mainly emigrated because our consciences wouldn’t let us keep paying taxes for President Cheney’s genocide, but we could also see the economic implosion coming when Chimperor Bush stole his way into another four years of power. Converted the profits into euros, got a work visa Down Under and are living the good life (while sleeping well at night.)

I highly recommend paying your debts. I always have. But if you’re in something evil, that’s chewing at your soul, sometimes the only sensible thing to do is save yourself and bugger off. Let the miscreants deal with the fallout. That applies whether it’s a crooked loan originator or a torturing political regime.

And who knows — we might boomerang back, after the market has hit bottom and the war crimes trials are over…

It’s never OK to walk away. Take responsibility for your actions. Make smart decisions with your money. Have a plan. If you gamble be ready to take a beating.

I would also walk away and rent. Rent seems to be cheaper and probably would save you thousands of dollars on interest.

I’m a single, not rich, woman. I bought my first home in 2004. I did research for 1 year, made sure my credit was good, went to a reputable lender who WOULD NOT let me borrow more than I could afford (wouldn’t anyway). They required that I attend a homebuyers class, but I went b/4 it was required. I EDUCATED MYSELF. Got a low, fixed rate mortgage I can afford. My house was a life style choice, not an investment choice. So I have my little house with a garden and I’m satisfied. People who were greedy, uneducated and bought more than they could chew (just so some broker could make a commission)…Well, buyer beware. People want the quick house, money, etc., but not the responsibility that goes with it. Then when the going gets tough, they bail. Typical of society today.

If the bank is dumb enough to give you a mortgage without money down, you should walk out on them. They should be held accountable for their risk and be stuck without a chair when the music stops. Most importantly your home price is going down. Leave them hanging!!!

Homeowners who are deeply in debt should walk away! The Federal Reserve created this bubble by making the price of money cheap (low interest rates). This created artificially high property values. Now that we are in the bust phase of the boom-bust cycle, a homeowner would be trapped owing more money than his house is worth. To make matters worse, many firms used predatory lending practices (liars loans) including no documentation, no down payment, and interest only loans and discarded sound, traditional lending practices.

Boy, you guys in the USA have it bad. Walking away from your own home? Holy cow!

Up here in Vancouver, housing prices keep going up, and cant imagine walking away from our house.

Pretty sad!

How dare home buyers, real estate investors and lenders stick their loss to the American public.

You chose or offered “interest only” over “30-year”, you accepted or signed the paperwork, you knew the risk and therefore you should pay the consequences.

Don’t tell me “we were told…” or “we never imagined the market would drop…” You took the risk; it’s your responsibility to fulfill the obligation.

Your bet, your poor choice and now your desperation should not be the American public’s responsiblity.

You stupid people… You can’t pay your mortgage because of your bad decisions … its economics… you can’t get a better job because you don’t have skills… so get more… stop blaming others when its your fault! How many times do I have to tell you people these things.
God Bless America and Freedom isn’t free support the troops and my war

I Salute CNN for raising this topic.

At the same time, I see the flooding of this thread is most by the Corrupt, Unethical Lenders, Liar Banks, Underwritters, and The rest are those who actually DO NOT own a house. If you put into the shoes of those who are troubled, You would proudly say – Yes Lets WALK AWAY !!!

I am for it.. Thanks again CNN…

People choose to be uneducated. ARM loans have disclosures people – READ THEM. Oh, and have some personal honor, suck it up and get a 2nd job – whatever it takes- and pay that mortgage you signed for.

Walking away is a fine idea. As a matter of fact I think I’ll stop paying my car payment, insurance, telephone, electricity, what f**k I’ll just stop making payments on anything. Hell why should any of us have to pay for anything anyway? Why should it be incumbent upon anybody to live up to the terms of an agreement? The exception of course is payday…they better hold to that one.

Walking away from a commitment is immoral. A bank agreeing to a loan that is on its face likely to fail is unethical.

In the end, where the stain belongs is obvious in each unique situation. But undertsand it is a stain that never comes out. Maybe from from your credit report, maybe from your 10K filing, but never from your soul.

It’s irresponsible to walk away from a mortgage. Regardless of whether your payments are increasing and your home value is decreasing, you signed a legal document when you took on that mortgage. The value of the property is the risk you assumed so own up to it. If you walk away you should suffer the consequences that come with it (i.e. poor credit). You should not be bailed out, you don’t deserve it.

This all started with 9/11. The Feds along with the Bush administration wanted to keep buyer confidence UP! They kept lowering rates to keep the economy stimulated in spite of the war in Iraq. I have been in the mortgage industry for 25 years. It was a no brainer that this was going to happen. Rates kept going so low, the only direction they could go was back up. The Feds wanted to slow inflation when they started raising rates and it worked. Blame the lenders? Yes they offered alot of new programs that were unheard of 12 years ago. The poor borrower???? All they had to do was READ what they were signing! As far as subprime goes…..before values were dropping…..MOST subprime borrowers know they are getting a “get in the door” loan. They know that they have to be GOOD and pay their bills on time and if they are GOOD they can refinance in 2 years before their rate adjusts. If they couldn’t refinance after the 2 years that tells me, they didn’t CARE to pay their bills on time ever or they could have REFI’d to a lower more affordable rate.
UNfortunately the problem is far beyond subprime at this point.
WALK AWAY????? I say stick it out. This too shall pass and over time the value of their home will be well above what they bought it for.

The credit report system was designed and built by and for lenders. The whole system is smoke and mirrors and our fica score an arbitrary number picked out of hat for us to fit into. What will the industry do when all of us start saving money and only use cash or debit cards and stop living beyond our means on this illusion of credit? Lenders pushed and pushed for people to live beyond our means and I am really enjoying seeing the very same companies that have made ridiculous profits on us start to fold.

The housing mess is a v good history lesson for the whole world. And price for this tuition is paid by whole world.

I don’t like this politically correct word sub prime. They should be called potential defaulters.

Lending money to people who are potential defaulters is plain stupid. And walking away from the money you owe is plain cheating and cowardly.

Letting this happen at this large scale was incompetence by the government.

God save the financially responsible people from this mess.

I didn’t have the best credit when I bought my house, so I got a fixed rate with a higher interest rate than the ARMs at that point. I kept plugging away at my high payment, knowing that I was doing the right thing. If you signed on to a deal knowing that there was a chance that your rate was going to go up, you should have the opportunity to walk away if you don’t like the deal. It’s like complaining about the food at a restaurant after you’ve cleared your plate. I don’t feel sorry for you. I won’t feel sorry for you. Your credit should suffer horribly for it. I took my hits when I hit some rough spots with my higher payment… but that’s what I signed on for. I rode those tough spots out… you should, too.

Some people are going to take the easy way out and just walk away – and leave the rest of us to clean up after their mess. Fine, I say. BUT – I think these people need to have a serious DING on their credit for it – and then the next time they buy a home, this ding needs to scream out to any prospective lenders.

A lot of people caused this problem – greedy lenders, uneducated buyers, and overzealous investors who gambled that the only equity they needed was the inevitable rise in value of the property. (enter Dr. Phil – “how’s that working for you?). All these people caused this problem – but you sure don’t hear ANY of them trying to figure out the solution.

Why don’t these people re-fi to a fixed mortgage? Why don’t homeowners SUCK IT UP and work a 2nd or 3rd job?

This is the reason that America is heading down the tubes! No one wants to take any personal responsibility – it’s always up to someone else to take care of me. NEWS FLASH – the government will not take care of you, they’ll only take your money and tell you they know what is best for you.

I lost my job , was out of work for over 9 months, after draining bank accounts, savings..everything….I filied for the big BK. I say yes, people walk away, save what you can. 4 years later..after renting, I’m laid off again…what now… who knows…but they can’t damage me any more than they already have. The mortage people took advantage of me, 4 years ago. They tried to make a quick buck…now the whole industry is facing their just reward…I say. bankrupt the mortage people. they get what they deserve. as for the people lousing your homes. You can recover.. it make take 5 to 10 years. but I am debt free. I owe no one. rent/utilities.. so even though I am with out job again…I will overcome ! Go ahead let the rich get their rewards……nothing !

How pathetic- run away from your probloem. Spend too much? Not a problem- you are a victim of those terrible credit card companies who forced those purchases upon you. Stuck in a mortgage in a home you couldn’t afford in the first place?No problem- walk away… let somebody else clean up your mess.

This is what’s wrong with america. Stand by your decisions and realize they have consequences.

If you want to know why your property’s value is in the crapper look no further than the megalomaniacal lenders who wanted to put their billions to work to make more and more billions while the sun shone and the bubble expanded. It wasn’t homeowners who bought places to actually live in, not flip, that wanted to own the world. Before this latest bubble burst I bet I got 3 to 5 offers a week to “consolidate my bills” and refinance for 105% of value etc. So not only can you blame them for the tanked value of your house but also the way they had the legal beagles structure the deals hidden in reams of fine print and sold these CDOs to anyone who would bite, even towns and cities, like used car salesmen, and which has now created this huge leak in the value of most all assets and taken it’s toll on IRAs, 401Ks and most investments. Some of these bankers hiding in their corporate structures should lose their homes. You don’t have to look far on these financial websites to see how all debt is a house of cards and every new “revelation” is a breeze; wait for the real storm.

This country is all about “greed.” Everyone is to blame for what is happening now. Sadly, there was once a strong “middle class,” group, now there are very few of them left. Our governement bails out there friends but they give the finger to those who elected them to office. GREED thats what killing this country. If people start walking away from their homes, they should thank the media for showing them that you can get out and start all over. The weathy have the politicians and they tell them “politicians” how to right the laws to favor the 1% while the rest of us suffer.

It sad to see what good HARD working Americans are starting to do! People make choices bad or good, you have a choice!

PEOPLE SHOULD BE ASKING THESE CANIDATES WHY THE SUPER RICH AND POWERFUL CONTINUE TO CALL THE SHOTS.

It’s sad to think that a working slug like me that’s accumulated 37 buildings with 128 rental units over the yrs, purchasing each w/20% down will now have to help pay for the slovernly ways of the trash that will walk away from a debt obligation. Shame on you. And shame on our government for lowering the interest rates which will now in turn cause inflation and dilute the savings of those of us who have shouldered the burden. Fortunately, the savings I’ve kept in swiss francs, canadian dollars and chinese yuan have more than offset the decline of the dollar. Sadly, our governmnet provides little to no incentive to have americans save. That theory runs counter to corporate greed. Unfotunately, this is China’s century! We’re just living in it. May God help your grandchildren.

I atill say walk away. You need to feed your family. Banks these days seem more like Payday lenders or Pawn Shops than banks. They don’t want prime borrowers or depositors, just the “cream of the crap”. The liquidity crisis is not just the subprime, it is much deeper. Think Long Term Capital Management, and then multiply by 400. The banks mathematical models didn’t account for this. Subprime was just the start, then the bond insurers, then the state and local government bonds(muni’s). The federal government has to step in. The federal reserve is powerless at this point, even if the fed rate was 0%, it will only prolong the enevitable. The government needs to unwind these derivative bets before the system implodes. Gambling is not banking, and banking should not be gambling.

This is B.S.

I live in a less-expensive house than I can afford, I have a fixed rate 5.5% mortgage that will be paid off in six years, and I pay ahead on the principal 24 times per year, in addition to the regular monthly mortgage payment.

To expect me to feel sorry, or to approve of a federal government handout for the idiots who bought homes they could not afford without a zero-interest mortgage, and expect that its “OK” for the rest of us RESPONSIBLE tax paying citizens to pay for these stupid, selfish, and and personally incompetent borrowers IS NOT GOING TO HAPPEN.

Every person who has placed themselves in the situation the mortgage mess has brought upon them DESERVES to live on the street, to have THEIR credit destroyed, and to receive NO help from the rest of us who are responsible, and do NOT live beyond our means.

If more of us would draw a line in the sand, and refuse to tolerate the kind of personally irresponsible behavior that this situation represents, we would all be better off, and our society would not suffer the issues and ills it is plagued with today.

Investors hoping to make easy money, who made pure speculative investments, I have no sympathy for. 1st and 2nd mortgage combinations that allowed the buyer in with no money out of their own pockets–the lender should take full responsibility. Tax payer bailouts of either the lender or the borrower in these cases is another example of unbridled greed. Rather like extending tax breaks to oil companies who are having record profits yet again! The rich get richer while the working class picks up the tab. I’m ready to vote for change.

I have an empty rental that used to be my primary home. I am throwing good money after bad. I have tried unsuccessfully to refinance to combine a 1st mortgage and equity line. I have never been late and have owned the home for nearly 13 years. The bank will not even negotiate with me unless I miss three payments in a row. What sense does that make?

Wow..Its funny to see people flip out over this.

You signed a contract saying if you dont pay they will take your house!

Well by walking away your not doing anything illegal or immoral. You have kept your word. You did not pay you got your house forclosed on, simple as that.

Walk away if it financially makes sense.

The CEO of the bank will quit right before the bank collapses and still get a few million dollars severance. Why are we worried about the little guy trying to make a buck off of these buffoons greed and jumping into the pyramid scheme a little late? Screw the banks. Walk while the walking is good before the government locks it down to protect the rich like they always do.

Well, you might as well walk away at this point from that gambling bet on real estate. I bet your realtor told you to go for it..oh, I forgot, realtors have nothing to do with the bubble. The real estate market was a big piramid scheme and now nobody wants to play the game. I have no sympathy for the borrowers or the lenders, but the government has no business bailing out anyone. Why do we see Angelo Mozillo from Countrywide still walking around spending his stock profits when he had the inside information to sell at $46 per share two weeks before all hell broke loose. No bail outs…just let the chips fall where they may! If banks have to go out of business for being so stupid…let them. I wonder what the CEO of Coldwell Banker who said property values have NEVER gone down in recorded history has to say now…just like a realtor – it’s always a great time to buy, and now you can always walk away, too. LOL

I liked reading “Troubled homeowners: Can’t pay? Just walk away” by Les Christie.

But I think this article was highly misleading and confusing to the readers from around the Nation, except California. To my understanding, this walk-away is possible only in very few steps, where even if home owners walk-away from Mortgage, they would be sent 1099 by IRS. For example, this isn’t possible in the State of Virginia. Can I request your comment on this Please? Thank you.
Ed

Walk away.
By doing so, you are not only saving yourself from unaffordable debt, but you are also doing the rest of the world a service.
These banks are the “parasites” that have been using host countries (e.g. Spain, Holland, UK, then U.S.) to further their ultimate obejectives. They ARE the root cause of this country’s (and the world’s) problems, i.e. poverty, unnecessary wars, and most of all, the national debt. Once they are done with this country, they will just leave you with trillions of dollars of national debt (along with your own), collapsing economy, and the rest of the world that despise this country. And they will find another “host” (China?, Russia?).

When can you walk away? Never. A mortgage is a contract. This attitude that you should “just walk away” just shows how ridiculous our consumption-driven economy is: Hey, give it a shot, and if it doesn’t work, dump it. We reward people for lying their way into the property and driving up the prices for people who may have legitimately been able to afford the homes in the first place. This is just the same as “aw shucks, guess I shouldn’t have bought all that junk I couldn’t afford on my credit card….guess I’ll just file bankruptcy.”

It’s a complete fiasco! The Govt. should be investigating these big financial institutions that allowed this ’sub-prime’ meltdown situation to occur in the first place. How about helping these poor people out instead of taking their homes off them? It’s a national disgrace! Greed has caused it and only common sense and humanity is going to fix it.

I have little or no regard for those who drove the price of housing up by investing in realestate. This put buying a home out of reach for many Americans. If they can simply walk away, where is the fareness. I believe both the lender and the home owner should have equal accountability. Let’s make sure if someone gambles (banks and buyers), they assume ALL the risk.

My advise is for everyone to stop paying on their mortgage, it will take years before they foreclose on you and by then the Government will step in and help you they wont let the Banks go under.

Here’s our situation. We have a home for sale in a market that identical homes are selling for 10 to 20 percent less than the value we bought at 3 years ago. I’ve taken a job out of state, and we are struggling to get the house sold when banks are able to use their deep pockets (revenue from other investments) to offer steep discounts. Although many owners are at fault for refinancing when values were high, we did not and are now being penalized for the loose credit standards used by banks to make money in that same market. Current rent rates are lower than our mortgage due to the flooding of homes on the market. We are respectable people, but we are in a very difficult bind. Wew are thinking we might have to walk away just to keep our family together.

No, it is not okay to just walk away from your responsibility…you signed up for it, be responsible and own up to it. If you went into it not having read your mortgage contract or just being plain greedy, you deserve what you get. While there are a lot of families out there who simply had life problems such as job loss or illness, I would bet that most who are walking away were just plain greedy…bit off more than they could chew and now just want to pretend it never existed. Grow up, take responsibility for your actions. I would like to think that character still counts. Live within your means or below and you can never go wrong.

As my payments jumped up two years ago I could no longer keep up. I put 12,000 down on my house and made my payment for three years. I had over 43,000 in interest payments plus the 12,000 I put down on a 106,000 loan. I did everthing I could to get the bank to work with me and they said no over and over again. They kicked me out of my house and got what they deserved. I tried everything to keep my house. Now President Bush is working a deal for borrowers and it is much to late for me, my house is gone. Goverment should have fixed this a long time ago. Now I rent, no regrets, my home is my home, they got my house.

No!!! You should not walk away from your financial obligations unless it simply cannot be helped due to catastrophic reasons, generally beyond ones control!

The reason being that in the end WE ALL pay the price for this lunacy! I live in an apartment because I knew I could not really afford a house. I knew I could qualify for one, but not really afford one. So how am I rewarded for my financial discretion? The dollars in my wallet and my savings account are devalued from the world financial markets crisis this has facilitated. And don’t even get me started on my tanking 401k account balances!

If I and others had no scruples we could of got in on the scam as well and expected some other sucker to foot the bill, while making the crisis even worse. There is plenty of blame to go around. There were idiots on both sides of the coin. Those who were naive and or unscrupulous enough to sign up for buying property with smoke and mirrors and those who were greedy or idiotic enough to sell them the smoke and mirrors. So in the end someone has to pay the piper for the disappearing asset values. And it turns out its not only the naive buyers and the greedy mortgage lenders who do so, it’s also distributed across the entire economy!!!!!

Thanks a lot boneheads!
Signing off from my apartment

Wait just a minute. I’m the last one to have sympathy for those who got themselves into stupid deals, but this is a business decision from BOTH sides. The lender took just as much risk as the guy who bought that two million dollar house with no money down, and the agreement was, pay, or leave. Now the lenders are going to cry when people make the smart business decision? Sorry, I ain’t buyin’ that either. Both sides made poor business decisions, both sides should take their lumps. Unfortunately, witht he liberals taking over both parties of government, it will be schmuck #1 and schmuck #2 footing the bill for both irresponsible sides. And to think, we founded this place because some king wanted a few cents per ton of tea….how far we’ve fallen.

Business is Business.If your married with children you are the CEO of your family and your finances are a top priority.Throwing your savings to make big payments you can not afford is a death sentence big business never makes.Foreclose and come back in 4 to 6 years with money down and a sound business decision.Savings and not home equity is a persons wealth.

This “story” is yet another example of how the CNN company lowers itself to pure sensational media. I am hereby signing off, going to try and find some real financial news. To those of you with a 5th grade reading level and no knowledge of finance or economics, and how walking away from financial obligations that you willingingly entered into will negatively impact those of us who maintain above-board finances and lifestyles – enjoy the trash that this network publishes! Its shameful.

No responsibility will make me RICH!!! HA HA HA HA!!!

To heck with everyone else!!!

Pure and simple …. when the government rescues those that made a bad call, the taxpayer pays. Somehow I do not remember the taxpayer getting a windfall check from the “flippers” that took advantage of a rising market.

Absolutely, it is ok when you can’t feed your family and pay your increasing mortgage. It’s one or the other at this point. I’m choosing to feed my family.

David in your article is typical what is wrong with the American people – no personal responsibility. He bought the properties on a risk; it didn’t work. Tha is why it is called a risk or investment. He needs to “own up to it, like many responsible Americans do”.

Individuals caught in the mortgage situation need to take responsibility for their actions. The majority probably “over bought based on their incomes (just because the bank will loan you a certain amount doesn’t mean you should do so), but no money down and probably over borrowed on other tangible items.

Need they remember that banks are in business to make money, just like other businesses. It is called capitalism.

I along with many Americans take personal responsibility. I am not about to pay for the thousands that do not take personal responsibility.

The pain is bering felt all over…

Countrywide CEO Angelo R. Mozilo, is forfeiting $37.5 million in severance pay, fees and perks that he was scheduled to receive upon retirement. Current estimates have suggested that Mozilo’s payout could have exceeded $110 million, but now he’ll have to make due with an estimated $66,000,000 package.

CEOs take a healthy company down the tubes and walk away. They are punished with lucrative severance packages. It is no surprise that average folks might feel they can do the same, although although not with huge compensation.

Troubled homeowners? Please, the only thing troubling is the fact that so many lack the integrity and morality to honor the obligations they voluntarily entered into. What’s wrong with this country!

It is never okay to walk away from a commitment! In the old days a handshake was a good contract. Well, lately with all our greed a handshake isn’t good anymore so we went to the contract. Now you are telling us it is okay to walk away from a commitment? That’s what’s wrong with America. As long as you promote crap like that even a signature on a line signaling a commitment is not valid any longer. When is a commitment valid any longer. Keep printing crap like this and everyone will be defaulting on all commitments! Let’s just walk away from our cars when we don’t want to pay anymore. Or better yet, those damn credit cards are a pain! Wake up Money.cnn, this isn’t Junior High.

Of course it’s okay to walk away!! If I’m losing money on the house, I’ll walk away from it. The US government encourage that very idea of let my money problem be someone else’s problem. There is no jail time for robbing the bank or the average US citizen indirectly!! As far as credit worthiness, that won’t be a problem at all, some bank will lend me money again in less time than I write this!!!!

I can’t believe people are doing this. No wonder this country is in such a tough spot. Investors must swallow their losses. Families with no real choice should be given some leeway. Morally, I think families in trouble deserve our compassion and help. The jokers speculating and rolling the dice deserve nothing more than a pat on the back and maybe a book on financial management.

After 1998, the value of flats in Hong Kong dropped nearly 70 percent in value. People pulled themselves together and didn’t default in the droves that we see here – and they had a lot more to lose then what most Americans do.

There is and was greed on both sides of the fence here in the US. Now people want to cry foul when they lose the gamble they made. Oh well. Suck it up if you are one of those people who gambled and lost. Shame on those who took advantage of those who reached for their only chance to own but were taken advantage of by many in the system (and this is a systematic failure.)

However, a lot of people were and are still making money off of this – the ones that sold the mortgages and who were getting inflated commissions not to mention those who in turn bundled and resold them.

The whole thing reeks just like insurance companies complaining about huge payouts due to natural disasters – but they are still turning a profit time and time again. That’s not raining falling on your head…

Everyone’s situation is different and what’s right for one may not be right for another.

BUT KNOW THIS: it is never okay to walk out on your responsibility. This pop. culture ultra consumerism mentality that promotes dishonesty and promiscuity is corrupting our country to the core.

For those who will suck it up because it is the RIGHT THING TO DO, I salute you. For those that do walk, the hard workers will get left holding the bag…but I guess you never had a problem with that anyway.

Eventually the day will come when this trick of bailing won’t be work. Where will you or your children be then?

No wonder socialism is popular right now. It eliminates all personal responsibility. What a sad day when people in our country no longer believe in or abide by wrong and right.

Mortgage too high? Walk away!

Dining out and can’t pay the bill? Walk away!

Dislike your wife and kids? Walk away!

Tired of people depending on your honesty when signing legal documents? Walk away!

Yes, I’m being sarcastic. I do feel there are a small amount of folks who have fallen on hard times. But I do believe the majority of this sub-prime issue is due to short-sightedness. Folks just aren’t thinking ahead.

20 years from now we will hear from this group of folks again complaining they haven’t saved enough for retirement. They will be asking us who have saved for another handout. Somehow it isn’t their fault.

I’ve read all the comments. Not once did I see the “D” word…
De-regulation, is the culprit, which stretches across several Dem & Rep administrations. Reckless lending practices, bullying the (otherwise) honest in the appraisel & other systems; all because the GOV was not minding the store..Gee-did they (or)individuals in their relm have a personal finnancial intrest?
End of discussion….

People that cannot compute middle school math should never be allowed to purchase a house. I just want to say thanks to all of those idiots for starting the beginning of the end for the housing market. Well, at least after they walk away they will look “smashing” in their luxury cars and designer clothes that were bought on credit. Get comfortable- that Infiniti is your new home.

“It’s all Bill Clinton’s fault!!”

Someone here blames Bill Clinton. Is there anything that isn’t Bill Clinton’s fault!? LOL!

Okay people. Lets be for real. It’s not the lenders fault at all! At the time they (borrowers) qualified for the loan and EVERYONE was told that if they were in an arm that they needed to refi. before the arm was up. Some people listened and some didn’t, and some lived the American dream of just spending and spending.

As for your home declining in value. well lets take a look at something the houseing industry has called an appreciating asset. Your house ages RIGHT? Many items become out dated like the furnace, plaster walls, old insulation so your home becomes let effcient RIGHT! Now your going to list a home that you bought 10 years ago for $150,000 and you now going to ask $195,000 based on a conservative 3% per year. For what??? It’s all very easy to understand when you look at the facts. The stock market has to make a correction some time… Why wouldn’t the housing market?

Who I really feel sorry for are those first time home buyers that can’t come up with even the down payment because the home prices have become so inflated to match our American egos.

I can’t wait for the day my car appreciates 3% a year.

I started scrolling after a while, because the same-old same-old and the circular arguments get tiresome after a while.

Here’s what I have to say on the matter: criticize people who walk away all you want. Rail them up and down, left and right, tell them they’re worse than illegal aliens.

Don’t think for a MINUTE that the same won’t be done to you as soon as you lose your job, find your health bills piling up (with no health insurance to cover it, because guess what genius, you need a job to pay for health insurance), your bank refuses to work with you to make payments on time easier, gas prices go up AGAIN so that your spouse’s commute to work costs twice as much this week as it did last week, the price of food goes up even at Wal-Mart, you tore the only set of business clothes you have for job interviews and need to purchase another set so that you can continue looking for work…and don’t think it won’t happen. It happens EVERY DAY to the same hardworking Americans you’re trash talking.

Except some, like my husband and I, were “responsible.” We kept struggling, I had a nervous breakdown from the harassment by creditors, we lost our house and one of our vehicles during the filing for BANKRUPTCY because there was no way we could afford them even after the bankruptcy was finalized – and I am still unemployable, am still afraid to answer the phone, and my family is STILL without health insurance three years later.

Dump that stupid house, before you end up with your credit just as ruined and a host of other problems on top if it.

This is not a time to feel sorry for anyone. Lenders don’t lend to kids. All parties taking out mortgages are adults who are fully aware of their monthly payments. I have lost a certain amount of respect for CNN due to the title of this feed. It obviously caught my attention to say the least but it seems the “Just walk away” portion is a bit too much. If you decided not publish my two cents I understand as well. I just think that walking away is a weak approach to say the least. What happened to owning up to our decisions and standing on what the backbone of this country is all about? The American Dream.

I can’t believe people that made adult decisions may be getting help from the government or are just walking away. Give me a break! You knew what you were getting into when you signed the dotted line. Where did you think the payments were going to go?? Down??

I’m a tax payer like everyone else and I find it appauling that some of my $$ is going to go towards people like this.

If you’re one of those people who’s walking away or thinking someone is going bail you out, grow up and take responsibility for what you did. Get another job if you have to, get rid of your fancy material items and do what is right!

CHALLENGE:
I challenge anyone here to actually name a financial institution that posted a loss in 2007 due to mortgage defaults and foreclosures.

They didn’t! Finance remains one of the strongest industries in the country. The loans are structured such that the bank wins either way.

The idea that so many were taken advantage of is rediculous. The fact is most buyers knew the risk they were taking-gambled and lost. Unfortunately, since the lenders were not regulated-we lose too.

The problem w/ ‘walking away’ is that it just doesnt affect the person walking away! It affects all of us! Why should they get to just walk away and start fresh when the prices are better. They should have done the home work before they signed on the line. Stop blaming the mortage companies, they are not all to blame. To walk away b/c the value of your property that you brought to make a profit was going down? Why is it MY problem that you got so greedy and thought you could make a quick buck? Have you ever heard of the stock market? We bought a house we could REALLY afford w/ a conventional mortgage. Not some ‘fake’ payment for so many years. People got ‘house greedy’ and put them selves in WAY over there heads and now WE have to bail them out????? NOT FAIR!!!!!!!

I’m reading these comments and am thinking some of you deserve to lose everything for life.
This isn’t Bush’s fault. This is the fault of greed and speculation.
Yes the mortgage companies over lent, but the real estate agents OVERSOLD.
There are some pretty typical numbers that you can figure out….
If you can spend 30% of your gross on a mortgage payment (way too much by the way) and your wages only go up by 3%-5% a year….houses can not skyrocket forever as they will be out the reach for the average potential homebuyer….it’s just math. Oh by the way, what idiot buys a house with a 50 year mortgage? Don’t you think about house repairs? maint? upgrades?
Interest only loans, 50 year mortgages etc..these are dangerous tools. Beware.
If you play with the big boys you WILL get burned….did they tell you that as they drove away in the B’mr?
If you bought a home hoping to flip it…too bad so sad. You gambled you lost.
As for you people walking away..more losers.
I despise all of you as you cost responsible guys like me a lot of money. The thought of the government bailing you out sickens me.
I want the economy to fall….then I can take my CASH that I saved (instead of betted) and buy things at a great VALUE.

Walk away? You take a chance that your Investment could depriciate … I would never borrow other than fixed rate… Ignorance is no excuse knowing what might happen, of course if you can prove fraud against the lender then have a nice day in Court, walk away? “I don’t think so”.

No, it’s not ok to walk away. This is yet another example of another things that separates us from the rest of the animal kingdom…. We have accountability and integrity. I do think that some people may have been taken advantage of, but, that is certainly not the midpoint.

walkaway, please. I’m a stable renter with a great FICO, the sooner the prices come down the sooner I can buy. Didn’t buy in in 04, prices went up. Didn’t buy in 05, prices went up…etc. Now that they are going down…I’ll wait until the tide shifts or I find a place I really like, maybe your foreclosed place for half what it sold for. In the meantime, with a few empty shells on the block, I bet my rent will drop near term since everyone else looking to rent will have credit issues. Just another cycle, some made money on the way up (not me) some will make it on the way down (not me) but there’s plenty of us just happy the silliness is over.

I myself am caught up in this mess. Does my house cost too much, no. I was told that the rates wouldn’t go up if the fed doesn’t raise rates. That wasn’t true. Rates were being lowed while my house not plumited. My problem is, it doubled. Is my house expensive, no. Who would think their house note would double. I sure didn’t. I think that the lenders should refinance their customers with a fixed loan and try to get everyone back on track. Wouldn’t that be simpler than them going bankruptcy and homeowners losing their homes.

Of course I can certainly understand the frustrated homeowner walking away. I would love to refinance but due to my expensive house note, I have been unable to pay other bills and now my credit score is too low. Yes I have considered it. But I would like to start over and buy another home someday. This is a very small house with no central heating, car port, 1 bath, bedrooms. I could buy something worth the money if my credit wasn’t shot. Gas shot up, food is gone up sky high. Because of the rich man’s greed and them taken advantage of working class people, now their companies are suffering and going bankrupt and some out of business. Wouldn’t it be to everyone’s advantage to just refinance the troubled loans rather than cause millions of people to lose their homes.

The only reason I don’t walk away is because I don’t have anywhere else to walk or run to and I am trying to do the right thing. I am surprised there are more suicides than it has been. This country has killed millions of American’s spirits. Why doesn’t anyone do something. Lender’s have robbed the country and become overnight billionaires, it’s time for them to give back.

There are many reasons why homeowners are not living the American dream, but the American nightmare (as stated in a previous comment). For one, many middle-class people like myself get up every day to work, I get a small meager raise once a year of a few cents, while the cost of living, gas, food, childcare, etc. continues to rise. The government needs to address the problem that while costs around us are soaring, we will never keep up if our pay checks don’t reflect that. Look at how the government runs our country. I use to live in another country so I can safely say, that compared to where I use to live, America is run very differently. The people here are slaves to their government (sorry, but I’m just being real) and work their entires lives…but for what?? This whole foreclosure problem is a reflection of the unlining problems with this country. Work, work, work…but the pay is never enough for all the bills. The government wants to keep people working and spending to keep the economy running…which is a good thing…BUT on the other hand, people are not properly paid and can’t afford the rising costs around them. Take a look at the pathetic maternity leave in this country. Most employers give mothers only 12 weeks off (if they’re lucky)…many mothers have no choice but to return to work (still sore and some still pumping breast milk while at work) and leave a newborn baby with a childcare provider…so yes they are now working to keep the economy running (bonus for the government!), but at the same time spending a large amount of their pay on childcare. That doesn’t make any sense?? Research Canada’s maternity leave laws and you mothers or mother-to-be may all want to move there. If the government doesn’t get things straight…there are going to be more issues in the future, aside from all these foreclosures. It seems that the government is all in it for themselves and don’t give a crap about the people…they just want us all to keep working until the day we retire or worse yet, die. Yes..die. I’ve worked at a place where the guy literally died at work…very sad..he died slaving away for the government’s economy. *Please also be aware that those tax rebates bush has promised us all, well those aren’t free. Our children and their kids will be paying for those in the future…so essentially bush is giving us a loan and our future generations will continue to be American slaves to pay it all off. I suggest everyone save the money since we are in a recession or heading towards one and not spend it. Why boost an economy that works by slaving it’s own people. Why do other countries get more holidays throughout the year than we do? Have any of you ever thought of that??? I’ll be heading out of this country pretty soon….I hate being a slave…I have massive back pain due to the labor of this country. I totally support the foreclosures..they make me happy. FINALLY…the people of America are getting some attention from the government. Now they realize we are struggling and can’t just “ignore” the problem.

Another issue is that the housing boom was so fast that there wasn’t enough monitoring of those smart lenders who would “exaggerate” borrower’s income amounts and such to get them into a home they could not afford. This should’ve been monitored more carefully in the first place…I hope the government will do this going forward.

Again, being from another country I can compare America to a foreign place. The houses in America are CHEAP quality…anyone who doesn’t beieve me needs to move to Canada or the UK for a year and take a look around. American homes are build cheaply so that homeowners can keep the government’s economy running by changing their siding, doing their roofs, fixing repairs, etc. OMG-I have never seen houses that have been in need of such repairs or updates in my life. The US government is so smart…a great tactic in getting owners to spend money. No wonder everyone is damn broke..hell, all we do is spend on crap like this. Why don’t they make more homes that are all brick exteriors and with sturdy frames and foundations?? Sheesh…I’m just happy more and more people are coming to their senses and walking away because they realize this game with the government is one we cannot win…might as well call defeat and let the government sweep up the mess.

We tried to give all the information about our income but they insisted we were better off with stated income. We were told we were getting what we requested in our refi (fixed rate, consolidation, etc). We had been asking for a closing for 4 months, as we were leaving the country for a wedding and were going to be gone for 3 weeks. The mortgage co waited until 4 PM the day before we were leaving to set up the closing. When we got there, we were told, piece by piece, that we were getting different things than what we asked for, but they were so convincing that it was somehow better for us. Looking back, it was bait and switch. We should have torn it in half and walked out, but we felt (and were told) we had to sign or lose our mortgage. Walking away is, unfortunately, an option we are considering. We are hoping to sell first though.

I thing that it is unethical and immoral that people would choose to walk away from their financial obligations. They created their own situation, they should hold themselves accountable. And they are also propagating the problem for their neighbors and the economy. Their choice of walking away is dragging down the value of all the homes around them. They are in stealing from their neighbors by causing all the surrounding property values to drop as well. It should be allowed to walk away with no consequences!

I don’t know about most people here but I havn’t noticed my wages go upat all recently and i’ve been watching the wanted adds in my field and guess what… the salaries offord for the positions have been decreasing and positions are being combined!!!

Now how does this fit into the conversation… well oil prices has doubled as have most peoples electric bill. When you wages don’t increase but you monthly bills do then eventually somthings going to give.

This is a macro issue that shouldn’t be solved by government intervention. It should be left to Darwinism to sort out the survival of the fittest. You make a bad decision regarding a loan, you should repay it regardless of the circumstance. On a micro level, it may hurt some people that have legitimate reasons for walking away but overall, it will sort out the responsible from the irresponsible and ultimately result in a stronger economy. Let the free market work and it will… just like it does in nature.

Both, buyers and lenders were greedy and got what they deserve! These buyers wanted to get rich quick by flipping houses at over inflated prices, and these lenders wanted to get rich handing out loans to people who never should have qualified. Your average family could barely afford a house due to the inflated prices cause be all these unqualified, greedy house flippers snapping up real estate like a frenzy of sharks. Better these greedy bastards lose than the family who could have gotten stuck with an overpriced house.

Throw them, and the mortgage lenders, in jail for fraud. They are both the cause of the problem.

I work in the morgtgage industry doing refinances for people. i cant even count on 1 hand how many people i have calling in to refinance their arm loan to a fixed rate but are ineligable because the values of their homes are down. everyone understands the risks to their mortgage going into it you signed the papers, deal with it. 1 thing ive learned since living on my own is that you need to take care of the necessities 1st and my home has always been my 1st priority!

Rabin (comment at 8:31 PM below) is a perfect example of a Democrat mentality, and Mike (8:32 PM below) is the perfect Republican mentality. I propose a compromise… Have the government barter a PROFITABLE/BREAK-EVEN arrangement WITH an assembly of major mortegage companies to bail these idiots out. Mandate that the conditions of this agreement be offered to every borrower in trouble.

1) Borrower does not accept and manages to work through this.
2) Borrower does not accept and loses house, and potentially all other possessions, without re-imbursement
3) Borrower ACCEPTS and works through situation (all parties pretty much break even)
4) Borrower ACCEPTS and still fails to keep up payments – they lose the house and owe the government full ammount owed (which will be reimbursed to the mortgage company after full payment is received. The key here is that they owe the government the money, and therefore must pay eventually or face jail time. No bail-out via bankruptcy.

My name is Jason Geary, President of Celebrity Mortgage in NJ.

It is never acceptable to walk away from a mortgage. It is unethical and a breach of contract. Walking away from a mortgage is like walking away from a friend who lent you money. David knew the rules. He knew what could happen. He knew the market could change.

When people take on the responsibility to buy real estate, they KNOW the consequences. David shouldn’t have taken on the responsibility. As a result of David’s actions, it is obviously he or the lender commited some type of fraud because his proven (Full Doc) or stated income wasn’t sufficient. Of course he could have had sometype of life altering issue that adjusted his income, but David sounds like the typical speculator trying to jump on the gravy train of rising real estate. It is also apparent he has no remorse for the people he stole from or hurt. That is right, hurt.

When a person takes on a loan and doesn’t pay, Banks and lenders come after the brokers, in some cases, to recoup there loss. So, not only does David side step the actual lender, but could have put the broker at risk as well. This risk can paralyze a company and put 100’s if not 1000’s of people out of business.

I have been buying real estate for 12 years. The only time I bought a home without a safty net was my first one. It is very important for people to have reserves and always prepare for that rainy day.

It is admirable that David paid 15 months of mortgage payments. He should make the right choice and work on a modification plan with the lender or some other type of payment plan. If there is a will there is a way, everything can be worked out.

Life is full of choices. YOU where in the market to buy a house that had appreciated over and over. YOU signed the documents knowing about the risks. YOU should never walk away. Where is the persistence and drive to do what’s right? Find another job do what ever needs to be done to save your most important investment. Why does everyone always look for an easy way out? This is just laziness. GO TO WORK AND PAY FOR YOUR MISSTAKES.

of course you just walk away. if the situation were reversed, do you think for a moment that Countrywide et al. would even hesitate in just walking away? they do it all the time. to them it’s not even a moral/ethical issue. they have no morals, and certainly no ethics. why even think about it? as a famous poet wrote-we and the people know/what all school children learn/that he to whom evil is done/do evil in return. screw ‘em ans sleep easy

I cannot believe CNN titled this article the way they did. I assumed it was just a way to get attention but the article is actually encouraging people to walk away, getting experts to state “well your credit is better foreclosing than bankruptcy.” I can only assume the author of this story is in this same situation.

While mortgage companies have their share of blame, the real fault is with the homeowner. The bank tried to sucker us into a interest only loan and after reading the FIRST page of our loan we noticed what they were trying to pull. But alas, we had to put money down, something most everyone in this situation did not want to do. If you put no money down you have less of a reason to stay. INstead of buying the expensive cars and putting everything on credit cards, people should have planned their mortgages carefully.

As for the government relief, expecting taxpayers to foot a 25 billion dollar relief package! How ludicrous. People who worked hard, and budgeted their money accordingly will have to support nonpaying homeowners along with all the other people on welfare.

It comes down to personal responsibility. Read before you sign and quit pointing the finger at the banks or the government, look to yourselves.

It is never okay to walk away. You are only as good as your word. Quit being a burden on society. Suck it up and fulfill your obligations.

I financed my home 15 years ago, paid it off early and bought a second vacation home financed through the equity in my first home. I will pay that 10 year loan off early and then retire by 55. It’s not hard to do for middle income earners like myself if you are financially responsible.

This is not a new thing. I went through the same thing in 1994 in New Hampshire. The market went up in southern NH so that a person making a good living could not afford a normal home. The real estate market tanked. I bought at what I thought was a reasonable price, but after owning for nine years, I discovered that my home was worth $30,000 less than I paid for it. I chose not to walk away. I’m glad I did. Some people who did walk away had their credit ruined. It was a valuable lesson for me. The current home I’m in I paid the mortgage off in three years (yes, no new clothes, eating out, vacations, and so on for three years, but it is worth it!!!), and I’m as happy as can be. The morale of the story is WHENEVER A NORMAL PERSON CANNOT AFFORD A NORMAL HOME, THE MARKET IS OVER PRICED.

This seems to be an intentionally distracting question posed in a very leading manner. If the question was re-worded in non-inflammatory language, wouldn’t it read:

– “When is it okay to accept foreclosure rather than bankruptcy?”

or

– “What would you do if you were faced with the choice of foreclosure or bankruptcy?”

or

– “How should the law determine whether one is choosing or whether one is being forced to accept foreclosure or …bankruptcy?”

When I compare these unbiased wording choices to the subjective framing presented by CNN in its “walk away” question, I do wonder what the editor’s agenda might be. Whether the decision to accept foreclosure over bankruptcy is morally acceptable or not, the fact is that each choice is legal. It also is a fact that both leave ugly scars on the individual and/or family who must face such a lesser-of-two evils eventuality.

Rather than answering CNN’s silly questions, how about we ask CNN why it isn’t interviewing more well-respected leaders in economics, politics, and government who are opposed to the economic stimulus packages speeding (including Chris Dodd’s $20B subprime bailout Act) through Congress with little debate?

Obviously there was a lot of unscrupulous lending going on in this housing market, and my heart goes out to people who were truly taken advantage of. If you were truly taken advantage of there are a lot of programs to try to help you keep your house. This isn’t a legal question or a financial question. It is a moral question and what is at stake is your integrity. My question to the people who are walking away from there mortgages is you were “gambling” on prices going up and being able to refinance. You are in effect saying if I win I’m in and I get to keep the money, but if I loose it’s unfair and the smart thing for me to do is to walk away, but you are walking away from you integrity.

Hey dead-beat, you made a business decision to buy TWO million dollar properties using NO-money down, Interest-only loans that you planned to flip. It didn’t work out and now you want sympathy and a bail out? Well Drop Dead. Why do you think we, the taxpayer, should bail you out? Were you going to share the profit you hoped to make with the rest of us? If you walk I am in favor of prosecuting you for your fraudulent behavior.

And for the mortgage brokers, lenders, etal; your greed led you to make two million-dollar, no-money down, interest-only loans for a non-occupant purchase; and now you want sympathy and a bail out? Drop dead. Eat your losses like a man and not a mouse. It was a business decision and you miscalculated. I just wish the tax code didn’t allow you to write the loss off as an offset to profit.

Next topic ….

people are uneducated in these matters during these times. sell–sell as a short sale. he won’t walk away with any profit, but he won’t have the stigma of foreclosure. give the property back–call the lenders, request a deed-in-lieu of foreclosure. call the lender for options: a modification on loan terms, a short sale, a deed-in-lieu of foreclosure, a forbearance. it’s not OK to walk away, you take a debt that sounds too good to be true, you pay that debt.

It’s all Bill Clinton’s fault!! He wanted everybody to own their own home and so he pushed the banks and lenders to relax their policies: http://www.ghanaweb.com/GhanaHomePage/features/artikel.php?ID=128060

I have no respect for those that walk away from signing legal documents. They knew what they were getting into. They were hoping to make money. Well, they didn’t, and because of their actions the rest of us who are abiding by rules and believe in responsibility are going to pay the price.
The person you keyed the story on had no business buying two homes. I really believe he should go bankrupt and start over. I’m sure he could and still come out ahead.
i have no sympathy, and the bank or government shouldn’t either.

People, remember the fundamentals here. Defaults are up because property values were inflated by easy credit fuelling the whole mess into a bubbly inflation of market values. All of this “phony” equity, $12 Trillion by some accounts, MUST come out of the economy before any of this can be considered to be “fixed”.
Correlation does not imply causation. Walk-aways are but one sign of a much deeper problem than the simplistic it’s all because of “bad people” or “greedy lenders”.

Buckle-up and let the correction run its ugly course.

To everyone riding their high horses:

DEFINITION: COLLATERAL: Property that you pledge as security for a loan that is given up if you default on the loan.

The bank isn’t left empty-handed. They are left owning the property you financed through them. PLUS they keep all the interest and principal you have paid them up to this point.

The terms of the loand are “If you pay us on time every month for 30 years, ‘A’ happens, if you default, ‘B’ happens.” So what’s it to you if some people choose plan B?

The bank comes out ahead either way; Why else would they agree to the loan?

Homeownership is not a short term investment. That’s why they have 30 year mortgages. The market is cyclical, just as mutual funds are. Do you dump all your mutuals when they are at their lowest? The american public is spoiled and greedy, and when they don’t get their way, they cry and blame and point fingers. Take responsibility for your own decisions. No one held a gun to their head and forced them to refi, or take an ARM instead of a fixed rate. Why should the neighbor that has payed the higher monthly payment with the fixed rate be discriminated against because he chose the safe(and expensive) mortgage. Nobody is offering to rebate them money. When times were tough, and they couldn’t have a new car because they needed to make the mortgage payment, who stepped up and offered to bail them out? The government is just as responsible. Let’s create a few more low income programs for home ownership, and offer assistance to people who can’t prove the ability to repay. Then, when they go into foreclosure, let’s blame the mortgage industry. Show me another industry that has a 98% success rate. Even with all the foreclosures, there still isn’t more than a 2% default rate. Take another vacation. Buy another big screen TV. Eat out a couple more times a week. And then complain that you can’t make it work. It gives the people that really have employment issues and hard times a bad name. They get lumped into the same bowl with the abusers. But I’m certain the gov’t will figure out a way to tax the majority, to bottle feed the rest. Frankly, I’m sick of the gov’t control, and the lack of integrity of the american public. Our soldiers that fought for the freedom of our country are turning over in their graves because of how we abuse that freedom!

By walking away that is just showing how the morality in this country is deteriorating to a point that will destroy us. The majority of Americans have an ‘I don’t care’ attitude. We are the What’s in it for me society. We don’t have to worry about terrorists, we’ll destroy outselves.

If you cant afford the payment, then of course you must walk away.

When you buy and finance a car, it loses about 20% of its value when you drive off the lot, so are you to walk away from the car just because it is worth less then what you paid for it??

Wake up America.

When someone lends money, they do it to make an investment. In making this investment, they assume a calculated risk. The higher the risk, the more they need to make to offset the higher percentage of people that don’t follow through on their commitment.

The shady parts came in when houses appraised for more than they are worth, just to get a mortgage to go through; when borrowers stated higher incomes than they made (whether they were talked into it or not); when truth in lending lacked.

The question on whether you should walk away or follow through with your obligation is answered by who you think should be accountable. The lenders made poor decisions by not keeping tabs on the practices of those writing mortgages, so they are at fault, and paying for it. The borrowers are at fault for not doing personal research on a huge financial decision, and they are paying for.

The home owners and investors that did things right, and did their research, are the only group that are paying for (decline in market values), and don’t deserve to. They are also the group that are keeping their homes, and the only group keeping what’s left of the market alive.

I’m a hard working American. I own stock in my 401K like Merril Lynch, Countrywide, Citibank, etc. You know, big names. It is my expectation that these companies help me achieve my nest egg in life, a million dollars would be nice. The only thing I asked was that they be profitable. I didn’t ask how they delivered the profits. So when they shipped the call center and 800 jobs to India, I said nothing because they controlled expenses and my dividends were great. When they went with a lesser know manufactuer outside the US, I said nothing because the stock doubled and rose again. When they invested in high risk subprime mortgages to drive profits higher, I said nothing because i had 30+% returns. But now I’m upset because all of those actions have hurt the US economy.. OH and I’m not making money. Is the problem them or is it me? Who set the false expectation? As I read about people complaining about bad decisions by companies driven to make profits, don’t throw your rocks too far. This country created alot of this mess ourselves with our insatiable appetitie for toys and wealth. Wether its oil or subprime loans – take a look in the mirror.

I had to walk away from a mortgage in 2001 after my husband walked out on me. Tried to sell the house, but couldn’t find a buyer before my money ran out. Contrary to my former beliefs, there is life after foreclosure. Just 3 years after it happened, I was able to buy a new car, and began re-establishing my own credit. Rates weren’t great, but the re-building process was much easier than I expected. While I don’t think people should make a habit of not taking responsibility for their debt, I can understand why someone would consider walking away.

I have absolutely no sympathy for these speculators that only bought with the assumption that prices would continue to rise. I also have no sympathy for those who bought more house than they could afford. Anybody (even the people who can’t do math well) could have easily calculated the REAL cost of owning a house with an online calculator. These people never meant to just live comfortably in a home they could afford. They are ALL speculators, hoping for something for nothing. Many of them didn’t even put down a down payment… then they just bid against each other, driving prices sky-high. That is incredibly offensive to those of who are STILL scrimping and saving so we CAN actually afford a house. Banks should be prohibited from lending to those that cannot repay, and usury laws need to come back into vogue. People will borrow whatever the banks will lend. If banks can’t control their greed, the government will have to step in and make sure it gets done.

After reading this article, it is clear that three groups are responsible for this mess.

1. The Buyer – These people were greedy. They saw that they couldn’t afford a house on a 30 year fixed, so they went for the exotic loans.

2. The Lenders – This group was even greedier than group 1. As long as they were making money (and boy were they making money) they would lend to anyone. They flat out encouraged lying with “stated income” loans.

3. The government – Nobody care to enforce the lending standards. And now with the new Act they remove any penalty for the greedy buyers to do the responsible thing and make ends meet.

All three of these groups should be held responsible. Buyers and Banks should split the losses 50-50. If your upside down by 100K the bank takes a 50K loss and so does the buyer. The government should pass laws highly regulating the lending standards.

Only if everyone takes responsibilty will this problem be resolved.

If you couldn’t afford it in the first place, you shouldn’t have bought it. These people are hurting people who actually pay their bills on time.

No, it’s NOT “okay” to just walk away. We all end up paying for people’s irresponsibility. It’s just another sign of this entitlement generation. They want all the fun and perks of PLAYING at being an adult, and “having it all”, but none of the down-and-dirty work that goes with it. That’s why their GRANDparents were “the greatest generation”. They worked and saved and made a better life. The sequence is important. Work and save comes first (not only if you can’t find a way around it)!

Yes, it is okay to walk away if you don’t have any equity and you’re not attached.

The lender made a business decision to make a risky loan and he has to assume the risk. Most of those loans were financed with foreign money.

People were betting that the American consumer would kill themselves to make those high payments. The bet didn’t always pay off.

Its just business. Why should this guy ruin his life because some stupid lender encouraged him to take out these risky loans….. PERIOD.

I must say that jumping ship is not the best answer. Even with the housing market being so bad it is still a better investment for you money than the stock market right. Your home will rebound faster than the stock market is or at least before the market restores. Remember the depression, well we recovered from that!!!!!
Besides mortgage companies don’t want your home they can’t see it either no matter how little you owe. They would rather refinance you to a fixed interest rate some your rate doesn’t keep going up and you can stay in your home.

No sympathy got either party. I don’t believe a buy out is the right thing. If you signed a BS ARM mortgage and now are upset b/c you can’t refinance, do you think an arm was designed so a lender could loose money by lending to you on the short arm? DUh. Welcome to adulthood. And for the lenders who handed out cash like candy- the crows are coming home to roost. Stop expecting those of us who have been frugal to bail your buns out of the fire. It’s time for bankers who make 100-1000X the salary of the average schmuk to get ridden hard for a bit.

Home values need to fall, to be in line with personal income, not propped up in the stratosphere. The Wallstreet architects of this mess can suffer a bit too. Let interest rates rise and favor the folks who work for and save their money for a change.

It’s not wrong to do it: the home is the security on the mortgage, and the bank gets the home. I wouldn’t do it, though. Every market goes up and down, and I’d weather the downturn and reap the reward in growing equity years later.

we tried to prevent foerclosure via a chapter 13 bankruptcy. The mortgage service company continued its aggressive stance even after filing by insisting payments were missing and adding $1,000s of legal fees to our payment. We jumped from a $1295 mortgage to just over $1900 plus the ARM adjustments between $200 and $300. We have little choice now but to walk away from the home.

We don’t want respect from anyone; we don’t overspend, we aren’t careless, we are gainfully employed. We were pulled into the “Buy a home for your future” myth when we weren’t ready to buy. Those who criticize? Well, I sincerely hope that you learn compassion and that you DON’T have to learn what we have in such a hear-wrenching way.

When a person is buying a home they should know and understand that they are entering into a binding contract and that contract stands until the debt is paid. It is the buyers resposibility to protect himself, regardless of what interest rates or the economy does. It should be a very serious thing, to bail on a mortgage.

Well !

where do i start do we remember the internet craze in the late 90 where the nasdaq hit 5,000 everyone made big money then in the early 2000 everyone lost big money . Well the same has happened to real estate home prices shot way up cause interest rate went way down . What happened people where getting adjustible rates when interest rates where down . Whai i say is how stupid can you be did you think they would go lower . Bieng a american myself i cannot believe how dam stupid american people are . Now that rates went up from late 2004 to 2006 homes went down in price and are going lower . ME BERNACKE CAN PUT THE RATES TO ZERO THIS TIME AND ITS TO DAM LATE the home prices are doomed they wont go up for a long long time . My advice if your home dropped in price and your mortgage went up go to your bank and try to make a deal with a fixed lower rate . I f your bank says no then hand them the keys to your home and tell em see ya !

When to walk away is self-evident as described in the article. More and more will chose this viable alternative. The illusion foisted upon us wee citizens about credit score, and guilt only keeps the sheep in line.

It is never acceptable to walk away. People in know what they can truly afford – they don’t need to rely on some mortgage company’s formula to tell them. When you sign for the loan, that is a promise. If you default, or even worse, deliberately walk away, then you are a liar, and should never receive credit again. The value of your name and “word” is what you make it. Don’t rationalize your faults by expecting others to bail you out.

I can’t believe CNN is actually telling its readers to walk away from their homes. Where does the bulk of the responsibility lie? With the borrows. I didn’t hear anyone crying when 3/5 year ARM interest rates were at their lowest. If it seemed like it was too good to be true at the time, guess what?? It’s because it was!!

I don’t get all you people against this. You do realize this is exactly how corporate America has been operating for 50 years? make money for you and stock holders and leave someone else holding the bill.

The crashing house market leaves a small window of opportunity for the American saver with great credit to get a bonus. So if you’ve got a bunch of equity in your house go get a HELOC now. Then sit on it while prices plummet, then take it all out for a down payment on a giant new house and let the old one foreclose. So what, you’ll take a hit to your credit for 7 years, who cares? you’ll have a great new house!

I know it’s kind of crappy, but it’s the proven way to the American dream, get what you want by sticking it to someone else. And hey if you don’t like that, elect some government officials that will fix our economic policies.

So many comments…….. People don’t know what they would do until they are faced with this situation. That is why foreclosure was created, to free the consumer from the debt of the home. The bank gets back the home back, they still own it. So why do so many people feel that the buyer has to be financially stuck with it. The bank has my money. I have nothing. It’s almost like I am renting my home and paying a lot of money and making all these upgrades and improvements for the landlord, “The BANK”. And now what? Am I supposed to continue to rack my life with trying to pay for something that I can’t afford. There are a number of reasons I’m in this situation. My broker, the bank and of course most of all bad decisions on my part. I’m not asking to be let off the hook. My ruined credit will make sure that doesn’t happen. This is a very turbulent time for many people and those who think we are getting off easy are not living the hell that this has put on the families that really have to deal with this. I’m going to eventually walk away from my beautiful home. But I’m not giving anymore to the bank. I’m now saving all I can to start my life all over again. And believe me no one wants to be forced to do that.

America, America, you have gone down the slippery slope of compromised morals and now it has come home to roost

– Elected officials walk away from their voters via PAC & special interest money
– Athletes walk away from contracts after cashing the signing bonus
– US companies walk away from US workers in search of bigger bonuses and profits
– Schools systems walked away from educational standards and now pass everyone regardless of achievement
– Men walk away away from their repsonsibilities as fathers
– The courts allow us to walk way from marriage via 30 minute divorces
– Pregnant mothers walk away from unborn children via abortion
– The country has walked away from its Christian values

Once we went down the slippery slope of the above, walking away from a mortgage is no BIG DEAL…

Most of you do not get the magnitude of the problems, but a few of you do. Some folks put down 20% only to see themselves upside down by over 40% on a primary residence. This is not an amount of paper equity that will be coming back anytime soon.

The bay area has had a few slumps in my lifetime. One example would be a 180k house in the eighties falling in value to 140K. At the time this seemed calamitous, but was in retrospect peanuts by comparison. Reason being is that the paper ‘loss’ was less than what a median family earned in a year. Fast forward to today and we are talking about losing 5,6,7 or more times the median income. Housing doubled and even tripled in a few years in some locales for no fundamental reason. The market is not just going to ‘come back’.

Walking away from an asset that is several hundred thousand dollars underwater is prudent at this time.

This all came from greed. I do not feel sorry for the banks who made these stupid loans nor the idiots who bought houses they could afford. Here is a clue; If you work at Wendy’s and your spouse works at Burger King, you can’t afford a $400,000 home.

If you dump because the value dropped, but you can afford the payments, they should lock you up! Your house isn’t the only one that dropped in value.

Anybody here ever hear of a thing called “deficiency judgement”? Apparently not the CNN person who wrote the “just walk away” article.
Maybe that works in CA for first mortgages, but not so for second or home equity loans (even in CA), and also not in many other jurisdictions even for primary mortgages. You “walk away” owing more debt than the bank can recover in a foreclosure sale and the bank can go after you for the remainder with a deficiency judgement from the court. We don’t have “debtors prisons” anymore, but life on parole as a debtor isn’t much fun, nor very credit worthy.

This blogging gets addictive, drats! Another thought (I guess you can say I’m deep in thought tonight): by waiving the Glass-Steagal Act–look that one up, it concerns banks separating from investment corporations and was
established purposely after the Great Depression–President Bush, in his first term in office, really set the stage for this whole domino effect of subprime bank holdings and meltdowns. Nobody ever learns the first time around from history;that’s why it always repeats itself.

Americans are getting what they deserve and I hope all of these people who overextended themselves fall down and hard. Quite frankly, I am tired of working 80 hrs+ a week, making good money, saving and investing and paying in the highest tax bracket to support people who crave all the rewards of hard work without working hard. Now, as always, when the going gets tough, they walk away and have no moral qualms about screwing over lenders and investors in those mortgages. To further support this despicable behavior, our government is forced to bail these people out. Now, these same people are starting up again about how they have nothing left and cant afford anything and they are going to point the finger everywhere except at themselves. Here is a clue people, read the documents you sign (your mortgage), look at how much you make each month, back out expesnes that you need, put some aside for savings and investment and then finally whatever is left, enjoy yourself. I am tired of working 80 hrs a week so that my tax dollars can bail out your stupidity. I sincerely hope all of you who took part in this irresponsible behavior get hit and bad. Its the only way you will ever learn and its the only way America can try and salvage what is left of it.

Try paying back 100,000 in Education Loans, when the economy is so bad you are getting the same jobs as people straight out of HIGH SCHOOL! I can’t even IMAGINE being able to buy a house so I don’t feel sorry for the people who bought beyond their means. At least they probably have good jobs.

The guy that bought two houses in LA with no money down – he should have to suffer for doing something that stupid. Where’s the responsibility? Oh that’s right, it’s somebody elses fault – not mine. They made me buy two houses – I couldn’t control myself.
Give me a break.

Let’s see what all of the – “no bailout” “you made the bed, now lay in it” – people haveto say when ever other house on their block is boarded-up and home values plunge another 30-50%.

Let them eat cake indeed.

why did anyone think they could afford a 350k house on a 15hr job. then blame the bank when the payment went up and nobody else was stupid enough to pay that much for a house.It has become american culture to blame someone else for ones problems.Everyone who purchased a house then walked away was counting on someone stupider than themselves to bail them out of a retarded trend. Homeowners act like they never knew what the term adjustable rate or interest only meant only that they saw others in a small period of time make money.. I say you signed your name on that loan document, so own up to your stupid mistake and tell the wife to take the Suv back!

Maybe it’s time to reinstitute a debtors prison. if you walk away from your mortgage, without first declaring bankruptcy, you are commiting a fraud. If you do so, you should by all rights go to jail. It’s no different than taking out any kind of loan and then deciding not to pay. You can’t just change your mind.
So what if the value of your house goes down. Who the hell promised you it would never go down? Like others here have said, ride out this latest real estate hiccup.
Those of you who took adjustable rate mortgages, it’s precisely because people are backing out of their loan obligations that has created the situation where lenders will not lend so easily anymore. People, you created your own mess. Interest only loans…what kind of moron are you?
To those mortgage brokers who loaned money when any idiot could clearly see there was no hope of the borrowers ever being able to pay it back,you should have your assets seized and sold to help payoff those loans. And then be put in jail right next to the jerks who walk away from their debts.
It’s time to change the reall estate industry from a commision based industry to a flat fee or hourly industry. It would remove a significant portion of the fraud/greed factor and hopefully allow a honest assesment of home values and lending practices.
Glad I’m not planning on moving any time soon.

I foreclosed on my house in Southern California and I have to say that I resent being called lazy, a thief, and an opportunist. I would have done anything to have been able to keep my house. But my husband filed for divorce only three months after we closed in 2004. I was stuck with the house because he simply walked away from it. In most divorce situations, a home can be sold and the asset divided. But when a divorce occurs in this market, there are no options. I took on the responsibility of the house to preserve my credit, I got a new job and increased my income by 40%, and I paid every payment on time for two years – until my ARM kicked in. At that point, I was ineligible to refinance b/c my income alone wasn’t enough, my house had depreciated, and I had more debt than I had when I bought it, because of my divorce. This was an impossible situation. I was not a sub-primer. My credit score was 710 when I bought my home. Foreclosure was my only option after two and a half years of trying, and six months with it on the market. I had two short-sale offers (one for only $10,000 less than I owed) but the bank denied both of them. I work VERY hard, long hours, and I make a GOOD salary. But it just wasn’t enough. I wish all of you on here who are so judgmental would think about other people’s situations before you blame them for the decline in your own home price. There are very few of us who are proud of our foreclosures. But with no options left on the table, we are forced to accept the inevitable. And for the record, I do not drive an SUV, and I don’t own any big ticket items. I bought my TV on Craig’s list for $100 – it is hardly a flat screen. Think, and reserve your judgment.

For all of you who feel that people should not just walk away I say why don’t you put your money where your mouth is and start buying houses so that others do not have to walk away. You guys are all talk and do not face the financial situation of not having the money or desire to keep paying the banks that have billions of dolars in assets. Where did they get all of that money except for over charging everyone since time began. Now more than a few of them are in trouble. I have always paid my debts, but now find it impossible to keep paying for a mortgage on a second house (actually it was purchased before my job transfer). The house did have a couple of problems which I corrected when the bubble was expanding. I exhausted half of the money from my 401K to keep the thing afloat. I also refinanced the house that I live in and yet every week there is nothing but bad news and no one is buying houses. Now it has spilled over and the rest of my 401K seems to be in serious doubt. All at the same time I see CEO’s leaving their Countrywide Merrill Lynch, etc. positions and receive grotesque severance packages for not paying attention to the details as they should have. It really bothers me that there are so many of you holier than thou people that pass judgements on others when you have no clue at to the situation that others are in. You think that everyone who took a chance and got a subprime loan should have read the terms more closely.

“Current lending practices have created an environment where a measure as extreme as abandoning a home actually makes sense to some people.” What makes people so eager to to blame the institution? If everyone showed just the smallest amount of dicipline in their lives and not assume a 1,000,000 dollar loan with 0 down, we would all be better off. Good god country, take ownership and responsibility for your lives. Oh thats right, this is America. What you need to do next is hire an attorney, sue your neighbor for not taking out an 100% ARM, upgrade your wife/girlfriend to a DD, and take your kids to acting lessons. Enjoy the renting and reality of your decisions.

I do not think it is right to walk away rom an obligation you undertok. You have a resonsibility to pay your debts and a responsibility to teach your children right from wrong.
I also think you have to look at the problem d realize that you creted it. You signed the papers, paid the costs for the purchase and neer thought about the futur whwn rates are higher
and taxes are higher, etc.
Tose e not good lessons for our children. First try renegoiating with your bank, than try to sell the proerty and if all else falls try to dispose o the property on the bes possible terms you can withthe lender, ie deed to the porperty in liue of a foreclosure, etc.
Ther are othr ways than walking away from the property.

HDL
Lyncrest Funding

It is interesting that the article asserts that “The most serious consequence is a tremendous hit to credit scores.” Not really. The most serious problem will be the taxes owed to the IRS once the property is sold. Tax liability is based upon the difference between the (repossession) sale price and the mortgage principle – which will likely be considerable. The example provided is an individual who bought two houses – with little down – and the value has already dropped &60K. Sounds like a tax liability on $120K to me. More than likely, the mortgage holder will be very anxious to sell and the sale price will be based upon a depressed property. Perhaps, the tax liability will be on $200K or greater.

People need to live up to their obligations and buy a house that they can afford to pay for. Those who take risks and over extend themselves in hope of striking it rich are typically ignorant and have no business buying that home. Walking away from that house will destroy your credit(deservingly so) and put the loss back to the bank that was nice enough to loan you money to buy the house you don’t deserve. People need to start acting like adults and become more financially sound in their actions.

If I agreed to buy a house from you on terms, such as owner financing, you would be very upset if I bailed out. You would most likely even take me to court. Why should anyone be above their word? These days, your word is all you have. Use it wisely.

Many americans walk away from everything that just isn’t working for them at the moment. The kids,the jobs, the wife, the husband, the family. Why not the house? They have no staying power and they don’t follow through with commiments. If you make a commitment, then you ought to stick with it. Show a little backbone. If you can’t afford it then don’t buy it! Grow up and be responsible for once in your life. They said I could afford a $300,000 home and I bought a $175,000 home because I knew what I could afford. Start looking out for your own best interest and quit relying on strangers who don’t care whether you make it or not! Use the good sense you were born with. I’m tired of poor me stories. THINK, THINK, THINK. It is a gift no one can take from you so use your brain!

What happened to the 2 little words “personal responsibility”? I’m horrified at the advice this column gives. The attitude of ‘oh, I can’t make my mortgage payments, so I’ll just walk away and let someone else pick up the tab’ is disgusting. What’s next? I put myself though grad school and have about 5,000 in debt because of it, should I just walk away from that as well so I can live in a better apartment and see some extra movies?

Disgusting.

I have lost all respect for these people who decide to walk away. They live in a fantasy land. They have overspent for the past 10 years without saving a penny! I have more respect for the illegal aliens that come to this country, rent a house they can afford, drive a car they can afford, and sock money away for a rainy day. We should allow the illegal aliens to move into their houses, and ship these irresponsible people to Mexico.

I think the mortgage lenders should be held accountable. What were they doing with the credit history check? If they thought the people were not providing the right information why didn’t they request for backup documents and, how could they issue mortgage with 0% down. They took a business risk with short sight and, they were the ones who were too greedy targeting the vulnerable people. I think the government should punish all these mortgage companies who took the advantage of the loop hole and, went after the wrong practices.

Is it ok to walk away from the deep sink hole of the overly inflated home price? My answer is definetely YES! Not just to pay the holding cost of the house but also suffer from the devaluation of US dollars! Thanks for our greatest President Bush’s Cowboy style No brainer economic policies. I just walk away my $200K downpayment of my own resident. The house itself lost over 30% value in two years. Don’t listen to the realators or Mortgage agent story about the rebouncing of the value in 2-3 years. The housing market itself is having a cancer “wrongfully Marco economics policies from our government”. Save yourself first and jumb out the boat ASAP before it is too late and too deep.

The only time I think it may be acceptable is due to an extreme hardship such as illness or losing a job and not being able to find work.
I have a hard time believing people didn’t fully understand what they were getting into. They knew what their mortgage payments would be and SHOULD how much income is coming into the household. Those who had ARM’s knew the rate was going to change and would eventually go up. And….the people who walk away due to the downturn in the market knew they were purchasing a house in an over inflated market. Did they really believe “the sky’s the limit”???

Unfortunately, those of us who are making every effort to make our payments and stay afloat just like everyone else in this economy are suffering. I can only hope those who walked away will not be able to buy another house anytime soon.

I think everyone in San Diego County who can’t afford their mortgage should walk away with no thought involved. Cost of living here skyrockets every year with no wage increases. This is the first time the area has a glimmer of hope that housing will become affordable again, and sadly paying the banks money is not going to lower prices.

This will -FORCE- the market to lower the prices to something almost maybe affordable, rather than this absurd 2 million dollars for a 1 story 4 bed 2.5 bath on .25 acre property pricing.

This problem has multiple causes, including but not limited to:
-Rich people who support idiotic homesellers by buying property in the area for way more than it is worth.
-Idiotic homesellers undeservingly getting what they ask for when they sell a cardboard house on 1/50th of an acre for 500grand.
-Lenders knowingly giving mortgages to people who won’t be able to pay when the interest doubles.
-Middle class people taking out mortgages on these houses, supporting the idiotic sell pricing in the area, and supporting the idea that a 2 bed 1.5 bath house on less than an acre can be worth more than a million dollars.

Everyone should boycott so.cal housing until homes are not selling for way more than they are worth. Yes, the homes are still being put up for a good 2-3x more than what they should be worth. NO ONE GIVE ANY BANK / PERSON SELLING UNTIL THE HOUSES ARE AFFORDABLE!!!

If you think you will never use credit again for at least 20 years, then walk. But if you do walk, remember that you will not be able to buy another home, finance a car or cash a check. Your credit will be so ruined, it will take many, many years before you can get credit again. Think carefully.

I’m sorry, but you should use your head anytime you make a business decision. Interest only loans?, Flexible arms? Balloon payments?. Give me a break! Making a smaller payment initally, with the hopes that you will be able to make the payment when it goes up – Stupid!

By the way, with all the defaults, bankruptcies and used homes on the market, why are the home builders still building?

My $.02.

We all know there was a promise made to pay. Now they can not pay. Honestly what is the suggestion for those who can not afford the house. It is too late to say “they shouldn’t have gotten the house”. They now have it, what do they do. Stay there until they are kicked out? Pay what they can?

I say f*&% the house, the lender/banks that sold us the joke of a loan and good luck to the people that buy the bs of the American dream. It is the American nightmare instead, because of Wall Street and their great ways to make more money for the top wealth. “The Graet American Ponzi Scheme”. Walk away from that lethal mortgage that’s waking you up in the middle of the night with heart palpatations and worrying about how this hellish existence is going to ruin your kids lives. Screw scaling back on anything that makes your life a little better. Yah, a second job is what we need…. are you frickin’ nuts!!! We need to live a simpler life in a smaller but cozy home with the important things…. health and family. All the other bs is just that. I for one will be walking happily; I don’t care if I have to file bk to deal w/ a deficiency. If the banks don’t do their homework on who they give loans to it’s their own stupidity. I will take the hits and I don’t care what these sanctimonious righteous people think. I HOPE my foreclosure ruins your comps….. Maybe then you’ll understand this IS EVERYONE’s proble.

I am amazed at what I am seeing in your great country. I live in Canada where such issues are non-existant. We did not have preditory lending practices that encouraged homeowners to extend themselves to the extent that many in your country have. I simply cannot fathom what is happening and for CNN to encourage people to default on their homes is simply irresponsible. In fact your whole reporting on the subprime issue has been decidedly subpar. I love my country but I also love yours in so many ways. We need a strong US that exhibits many of the characterstics that have made your country great in the past. How many of your countrymen walked away from the great challenges of the last century. You cannot walk away from your problems. You must face them with the same resolute steadfastness that you have in the past. Do not let your excellence drift away!

“The banks have ruined neighborhoods due to their evil lending processes and destroyed peoples equity in their homes. Buyers like myself cannot be blamed for being irresponsible if forced to walk away.”

The banks began in the 1990’s to accomodate screaming liberal activist groups complaining about minorities and lower income folk not being able to have access to home loans. The accused the lenders of being discriminatory and in all reality probably were not handing loans out to minorities and low income people because the loans didn’t pencil out with their incomes.

So they complied with the demands of groups like ACORN and created all these “creative” loans. You know who was at the forefront of all this early on? Countrywide.

If there ever was an example of “the road to hell is paved with good intentions” this is it.

I feel like I am crowding the blogspace. Sorry for that. Just one more thought. How does anyone fix a credit problem,when in theory the problem was “easy” credit,with more credit? Does one pump water into a drowned man to revive him? As for upside-down home values, does anyone consider that a stock purchased this way –up 20% over 2 years,for example– would not seem a little,er, overvalued? Same people must have assumed that buying tech stocks with no earnings and a P/E of 90 was OK as long as–let me repeat,AS LONG AS– the money eventually comes through.

If this walk away mentality is not stopped it could be disastrous for our country. As more foreclosed houses flood the market this glut of homes will cause real estate prices to plummet further creating a viscous downward cycle. I fear this cycle will be very hard to stop and it will feed on itself. As more foreclosures happen home values will decrease further due to the glut of houses on the market. More foreclosures mean more losses for lenders, which will lead to less credit available. People will spend less and the economy will contract. As the economy contracts more jobs will be lost which will result in more foreclosures, and the cycle will spiral downward. Add to this the many who can’t refinance even if they wanted to since their home values have decreased or because the fact that credit is tightening. This could get very ugly.

Municipalities will see large declines in property taxes and conveyance taxes due to the high foreclosures and will be forced to raise taxes to make up for the lost income. This will put further financial pressure on struggling homeowners. Municipalities issue bonds to finance projects. The bond insures who insure municipal bonds also got into the subprime bond market. They are starting to have their AAA ratings downgraded by the rating agencies due to large anticipated losses. How will towns hit hard by high foreclosures survive? Who will want to buy or insure their bonds? I predict hard hit municipalities and States could go into bankruptcy if these high foreclosure rates are not slowed down or stopped. This foreclosure crisis has disaster written all over it. The government needs to step in and stop foreclosure where it can. They need to make people accountable for their actions. Those who can afford to pay for their homes or investment properties should be held accountable. They signed a contract when they bought their real estate and they should be held to that contract. Both the borrowers and lenders are at fault for this huge mess and they should both face losses for bad investment decisions. The lenders and investors in subprime debt already have and will continue to take huge losses. The borrowers who signed mortgage contracts should also be held accountable. If the government lets them walk away it is positive reinforcement for being financial irresponsibility. Why should our entire country suffer from higher property taxes, higher federal taxes from government bailouts, municipalities going bankrupt and losses in the value of our own homes due to bad investment decisions by others?

I read an article that Senator Chris Dodd is proposing a subprime bailout which will cost $20 to $25 billion in seed money from taxpayers. I believe the government is finally beginning to realize just how serious this subprime problem really is. I have a potential modification for this bailout plan. Why not prevent borrowers from walking away from their bad investment decisions by holding them accountable. The IRS could add another schedule to the 1040 return. Everyone who forecloses would have to attach this new 1040 schedule to their return and on it they would have to list all of their assets – bank accounts, real estate, investments, businesses, luxury vehicles, etc. If these people had enough income or enough assets to be able to afford the foreclosed property but decided to walk anyway to prevent a loss then they would have to pay extra taxes for several years. They could pay a portion of the forgiven debt in taxes. These extra taxes could offset the taxpayer’s money that is put into Senator Dodd’s bailout plan. Obviously the details need work, but a plan like this would prevent unnecessary foreclosures by people trying to eliminate losses from bad business decisions. It would hold people accountable and punish some of the financially irresponsible people in our country who are working the system at the cost of other taxpayers.

Does the new Mortgage Forgiveness Debt Relief Act eliminate income taxes on forgiven debt for those who could have afforded their homes but just chose to walk away from their loss? If so the government definitely needs to fix this Act as well.

I urge everyone to e-mail their government officials to prevent well off people from walking away from their losses without some kind of penalty. People should be held accountable for their bad investment decisions.

Of course it’s not OK to walk away from your debt. Why is this question even being asked? What’s wrong with this picture?

It’s never OK, ethically. While it may be justified leagally to do so, it just doesn’t make you look good. When all is said and done, all we have left is our integrity, right? In a more perfect world, I guess this would be the time where people would realize there really is no such thing as get rich quick–especially in real estate. We could always go back pre-1965 and actually save money to buy a home. NO, wait, that doesn’t fit well with our microwave mentality. The bottom line is that just because lending institutions feel they can scheme people by maximizing the amount of home a person can buy (& in some cases upto 125%) and on top of that give us the NO-interest plan, doesn’t mean we as consumers/investors should be so stupid in signing up for that suicide mission. Hind-sight and all, but good for me cause no I can start flippin’ your foreclosures!

You signed an agreement to pay for a house that you said you could aford. You knew the interest rate would go up in the future. Why do you think its now OK to be a liar about your intensions now? Unless you have some finacial disaster like loss of job or big health problems, bight the bullet and stick it out.

The simple answer – it depends. It is NEVER okay to walkaway from this legal responsibility simply because the asset value is depreciating, IF you have the ability to pay for it.

I am tired of the banks, wallstreet, mortgage brokers, EVERYONE else having the fingers pointed at them – what about the homeowners. THEY are the ones that signed the paperwork, THEY are the ones the opted for ARM or Extendable instead of a fixed rate, and THEY are the ones who used their home equity (wrongly) as income.

These people need to shoulder the blame and have enough maturity NOT to burden the rest of America with THEIR defaults.

I think it’s just great that Bernanke lowered the Fed’s rate so we can start the whole vicious cycle over and over again.

I do not think it is right to walk a way from a responsibility. Bill Clinton provided us exemption from capital gains and exclusion on primary residential house sales. This propeled house sales I believe. But I blame the housing market crisis all on the lack of governmental controls and business wanting profit no matter the cost. The lenders wanted money by providing loans which where interest only loans and allowing 50% debt ratios. Typically 28 – 36% was used to obtain a mortgage prior to this. The appraisal companies which the lender paid increaseed the values of houses so the lender would get there money. Bottom line was the lenders , appraisal companies, and the government was at fault for preventing this. The government and Bush administration was more concerned on how Iraq ran there country then how we ran ours. Examples are the hurricanes, natural disasters. It is also of the person handling the finances in your household to handle problems so this does not happen. My family has suffered from my wife having cancer twice which lowered our income. We had to wait two years for social security to make a decision for backpay ,and through incompetents of builder not constructing house correctly we lost $30000. We later recovered some of the money but not all. Lost $3000.00 on tax place, who promised to figure taxes and did not fulfill paperwork promise. Also being fired from my job. Through hard times,I and my disabled wife we survived and still have the house we bought in 3/2006. Today society is filled of the non-responsibility clause and therefore I say is not okay . It is up to individual to make sound financial decisions

Everyone in the mortgage “food chain” needs to accept responsibility for the mess our “irrational exuberance” created. When the dust settles on this whole mess you can be sure of two things: 1) Unless you have a very big downpayment and excellent credit you won’t be getting a stated income loan anytime soon. 2) There is NO difference between “mortgage abandonment” and foreclosure to a lender and today’s guidelines allow a buyer to purchase again after 3 or 4 years, but you can be sure that will get tightened up and it’s not unrealistic to think it won’t be 7-10 years (Lenders were dumb but we’re not stupid).
So, Yeah, walk but be prepared to accept the consequences of your actions (which you aren’t doing if you walk now)

I do not feel sorry for the lenders who made these stupid loans nor do I feel sorry for the dumb a$$e$ who signed the loans. Rule of thumb is you can afford a house that costs twice your annaul salary. What is wrong with this country anymore. One thing that is wrong is that the government is not setting a very good example for people. Here’s a clue; if you work at Wendy’s and your spouse works at McDonald’s, you can’t afford a $400,000 home.

I am shocked and saddened by some of the mean-spirited comments below. This is a time of great suffering for many, whether through ignorance or through no fault of their own. Together we have created a society in which insatiable greed is the motivator and has left us with this so-called ‘correction’. Behind the numbers are real people, some who may never recover from this.

Deadbeats walk away. The mortgage companies will come back after you years later and sue for the deficiency. I know, I used to be the lender suing people!

With us living in a society where it seems to be deemed acceptable to walk away from parenting and letting the government raise your children…walking away from a house must also seem ok.

I must be in the minority when I bought my house. I made sure I could afford it. And…I bought a house to have a home to raise my children in…to create memories of Christmases, birthdays and anniversaries. I didn’t buy it thinking about what its value will be 7 years down the road. My house is a home. Silly me.

Those of you who think its fine to walk away from your responsibilities…grow up!

Finger pointing has been pretty popular in these postings. “Banks are to blame!” “Irresponsible borrowers are to blame!” “Congress is to blame!” Those are pretty much the competing mantras.

This whole thing smells like the dot bomb 8 years ago. People heard some hype, professionals glossed over the checks and balances in favor of short-term earnings, value was artificially added to the market due to false hopes and emotion and now here we are. Who’s to blame? Everybody!

Buyers – you thought that the world owed you a mansion so you tried to buy one even though you didn’t have the income to support it. Many of you even lied about your income to get a loan that was over your heads.

Banks – you failed to do your research. You wrote bad loans.

Realtors and builders – I hope you had your fun. You really pushed that flipping thing. That hysteria really drove up the perceived value of a home. Now that’s come home to roost.

Congress – guess what? Now you get the pleasure of dealing with this fiasco. That’s right, rather than pointing fingers and calling names, we expect you to earn your keep. Sorry guys, but that’s why you get the big bucks.

Wow, this is sure a heated topic. Let me say this . . .There are people out there who work hard, save their money and still lose their home. Nine months ago my husband started a new job and two months later got Cancer and within weeks his employer let him go. We are a 2 person working household who we thought did everything right. The following six month he had treatments I worked and we drained everything we had to keep our house. We could not sell the house, we tried to talk to our lender before we even missed a payment to see if they would work with us. They would NOT, they told us we cant help you until you are in default! Are you freaking kidding me? They wont help someone who has good credit, put 20% down and never missed a payment? Wells Fargo has done nothing to help and now yes we left our house and surrendered it back to the bank. My husband found work but in another state, we could not sell our home, even at a $150 discount from we we bought it at. So yes there are people out there, working people that life happens to and have no choice but to take care of their family and walk away from a house. Are their people who took advantage I am sure but believe me a lot of people are hard working honest people who had to make a difficult choice. Its only a house and only credit. I would rather have a life and be together as a happy and healthy family, and I guess will be renters for a while

I can’t believe that people think abandoning their homes and screwing the lenders and their investors is a solution to the growing problem. It’s not everyone else’s fault they were too stupid to discern that they may not be able to make the graduated payment if they didn’t sell or refinance. It just shows that Americans are lacking a moral compass and common sense. Good job!

This is so troubling a problem to be taken so lightly. For the person who boght in 2006, they were plain dumb for thinking the market would last. For them to walk away, they should pay for that mistake so badly they wont encourage anyone else to walk away let alone so they could do it again. Lets bring back the debters prison!!

Watch out! This “walking away” could become a habit for many people. Some might transfer this habit to their marriages, children and etc. Patience in these difficult times might rebuild American character that built this country.

California law lets you walk, but if you now do not owe $$$ that you owed last year, the IRS calls that “INCOME”. Another nasty surprise…

Poor Judgment call on the part of this journalist and CNN to run this. In a self indulgent, gotta have it now, don’t make me pay for anything or take responsibility for my actions world, we have reporters encouraging even more irresponsibility by suggesting it is ok to walk away from your mortgage. Where a handshake used to suffice in making people hold up their end of the bargain, even the most loop-hole proof legal agreements are being disregarded as meaningless because people don’t want to have to deal with natural ups and downs in the housing market. What is happening to personal values in this country? If you make a promise to pay for something, you pay for it. Otherwise, we ALL pay for it… again and again!

some people have lost their jobs over 64,000 in the indusrty ,their were never any guildlines but if people go to the banks they will work with you to save your home,I think america needs to stop outsauceing and bring the jobs home, if you call the banks most of the time their is an indian with your personel information.Some one got rich when they gave out all the bad loans but no one talks about that ,now the banks are crying what happen to all the money they made off the loans!!!goverment needs to investigate instead of looking at basball player.I would be going after the people at the top that got the fat paychecks .and now we have FHA their are no guildlines and lenders are charging over $20.000.00 per loan. Come on goverment your ripping people off again stop the preditors in lending .tell the goverment to stop trying to put a band aid on this mess,if you own a home go to the bank for help .And do not vote for people that had their homes brought by special interst group (sorry hilary)

A few years ago the lobbists for the real estate/banking sectors had congress pass a bill severly restricting bankruptcy – debt would not be forgiven, just placed on a repayment schedule. This opened the door for the real estate/banking sector to lure, entice people to purchase homes above their income level. The greed of the real estate/banking sector has made such grevious business mistakes that they are requiring bailout funds from Federal Reserve, China, etc. The businesses will be bailed out, but the citizen will be forced into bankruptcy, foreclosure and debt that they cannot repay. This is due entirely to the greed of the real estate/banking sectors. The greedy businesses should bear the loss.
Ron Cauthon, Las Cruces, NM

I am so happy to see this article. I love the idea that we give AMERICANS the same opportunity that is routinely given to the Banks and Wall Street. We do not owe Banks anything! I say let them choke on all of the houses until the prices drop another 50%

I don’t think it’s ok to walk away. I think it makes more sense for the lender to freeze the rate instead of doing short sales. I’m reading all these comments blaming it on the borrower saying it’s there fault, when in fact it’s the lenders fault- they should have qualified them at the max rate so the borrowers had an idea what their max payment could be. Again, these lenders need to freeze these rates.

It is the popular use of the term “home owner” for someone with a mortgage that has given our nation a false sense of prosperity. If you have a lien on your property you are a renter just like everyone else. It is just that your landlord is the bank but you still have to pay for maintenance of the property. True home ownership is at a record low. With the real estate crisis, we are now becoming a nation of deadbeats as we just walk away from our debts but still get to keep our toys that we bought with the money that we should have been paying our debts off with. A great example to set for our children. Our parents didn’t behave like this.

Me again. Joe, from NH: While I feel frustrated that many people truly are financial
idiots, I am more frustrated that a coyote like you can sense blood and wring your hands in glee over it. Do what you do, but don’t rejoice in the misery of others. Bad character will equal bad karma.

I think it’s real easy.

Anyone who walks away from a mortgage should not be extended credit of any kind, ever again, for any reason whatsoever. Period.

Personally I feel it’s not okay to walk away.

I live in a region of the country that has seen one of the LOWEST foreclosure rates in the nation.

Vermont was not over speculated or overbuilt by greedy developers and because of that we have seen only a slight leveling off of prices, not the horrible depreciation that has occurred elsewhere.

This problem of foreclosure came from greed. Somehow folks thought that the money train of home appreciation would go on forever. I fault the banks, realtor’s, and appraisers for this problem.

But mostly in the end it really comes down to the homeowners. Homeowners had a responsibility to understand the terms of their loans.

I have rehabbed, and resold many homes. I always understood that the responsibility and the risk of these transactions were mine. Sometimes properties sold slowly and sometimes their resale was not what I would have hoped. Regardless of the situation, I was responsible for the debt.

Everybody goes through bad times i.e., layoffs, illness etc,… I returned from the Middle East and struggled finding employment. I finally did, and I was 90 – 120 days behind on my payments. I found a broker, and attempted to settle the debt and maintain the loan, but the Mortgage company did not want to work with me on the deal. I packed my bags and left. I gave a good effort, and didn’t have a problem leaving. Today, that incident is not even a blemish in credit rating. It’s not the end of the world to lose a home. Advice, learn to finance the home to make payments you can make. Don’t let credit card debt get in the way of your house payments. Those morons are just out to steal your money anyway!

Walk Away

Obviously you got yourself into a house that you can’t affort. What will working working 100 hours a week and putting all of your had earned money into this mess get you? Stress and more stress.

RENT

With all the foreclosures a lot of speculators will try renting out their houses. This is going to put pressure on RENT prices to go DOWN. You can RENT without all the stress of now being able to pay a mortgage.

Don’t believe the hype.

Too many people have convinced themselves that they need a HOUSE. You can still have a HOME if you RENT. Owning a HOUSE is not for everyone, don’t be fooled. Free yourself of your mental bondage.

Dump the HOUSE.

Maybe in 10 years you’ll be at the point in your life where a HOUSE makes sense. Clearly it doesn’t make sense for you now.

This is a very typical modern-aged American mentality fostered by our society.

On the one hand you can look at CEOs and other high level corporate officers that run companies into the group or even just make mistakes that decrease shareholder value abandoning ship but saved by their golden parachutes. That is the model that we have been given by our corporate and even government leaders – ZERO Accountability! So those of us who have been fiscally responsible, lived within our means are the real suckers – we should have bought that 500K house while we could, bet the ranch on flipping properties because even when the bubble burst we all knew someone else would be there to take the hit.

On the other hand, if I buy a stock for $20 and it drops to $10, I can’t just walk away or sell the stock without realizing the loss. Why should someone who bought property they couldn’t afford in the first place get a bail out or be allowed to walk away and let it be someone else’s problem? OK, fine, let them walk away, but prevent them from ever being able to buy property again – force them to rent for the rest of their lives.

This and so many other things in recent years have found me asking myself: When did the Roman Empire know it was falling and that it was already too late to do anything about it?

I think that it is irreponsible reporting that you even put the idea of walking away on your responsiblity in the minds of people that are on the edge of foreclosure. Why does the media and others continue to blame only the lenders for this situation. I agree that things might had gotten out of wack but you also have to blame the consumer for not educating themselves on what they were getting into. With the hords of available information on the internet and in books consumers have no excuse saying that they did not know what they were doing, READ the information that is available to you and ask questions when you don’t understand something. Consumers want too much for nothing and this is what sparked the advent of what has happened. SAVE you money for what you want!!! I personally think that there is a place for the government to help but I am not sure if what they are currently doing is the right answer. The FHA guidelines and the conforming loan limits should be adjusted to help out but freezing the arms in my opinion is not the best answer.

They can burn at the stake for all I care. I spent the last 10 years being frugal. I own a modest house and drive a 98 Honda. I don’t have a flat screen TV or fancy toys. I make a very nice salary as a technology professional and am living actually well under my means. All this while everyone around me played into this orgy and bought all their fancy cars, all their fancy TV’s, boats, $500 faucets and slab Granite counters – all on vapor. And now I’m supposed to help bail them out as the government gives away the taxes I pay to these losers. To hell with them all. I’m glad I shorted the hell out of the market in general. I hope they experience a lot of pain – they’ve earned it. My .02

Shame on the lenders send them to jail.

If the underlying lender refuses to work with the borrower in bringing them current or making it easier for them to keep their homes, I believe they should reap what they sow. These lenders approved these borrowers who could not afford these houses in the first place and they should shoulder much of the liability.

No, it is not okay to walk away and clearly the credit rating agencies need to re-evaluate their scoring system if they are encouraging this irresponsible behavior.

What percentage of all the foreclosures are owner occupied vs. investment property? In my opinion, it is NOT ok to just walk away. Didn’t these people sign their names to a loan agreement? For those who made a bad investment, sell the house, take your loss, and move on!

So it’s morally okay to only have to pay one’s “PROMISSORY” Note in an appreciating market? I can simply tell the lender who trustingly loaned me the money that I’m not morally obligated to pay if my house depreciates and walk away without any guilt. Sounds like the same mentality as taking out bankruptcy for medical reasons. Who more should we pay that the medical people who saved our life? Go away.

I have been self employed for the past 14 years. My home loan is with Countrywide Mortgage. In 8/2005 I had a fire in my place of business. I asked Countrywide for assistance at that time. I had paid more than 1 payment towards the princ. balance of my loan. I asked it be posted as a payment and was told NO. I was not past due. I have struggled over the past 2 1/2 years to keep current, never being 30 days past due. I have been charged 6,000 in late charges and have paid and extra payment towards my loan. Walkaway? I just spent 2 hours on the phone and was told by Countrywide I am not far enough past due to help. Yes walk away, your credit can be repaired. Self employed persons like myself helped build this country. Without us, there is no need for mortgage companies.

Lending institutions used predatory practices to entice many borrows into sub-prime loans the could not afford (long term)… why should these institutions be so surprised when folks just walk away… you reap what you sow!

I believe it is never a good idea to walk away from a responsbilility such as house payments. In the end it costs all of us in dollars and neighborhoods. I lso believe it should be the responsibility of the bank to work with the owners to create lower payments that can be met.

The mortgage companies took on risk when they gave money to people who could only pay when the rates were insanely low and to people who were putting no money into the game.

Walking away is not a sign of any moral issue – this is all just business.

Perhaps the mortgage companies will think twice about loaning money to people who have no money to put down and then charge them rates that will only last for a short period of time.

Any bank that gives someone a home loan with 5 or 10 years interest only 100% financing is just asking for the keys back. No one should be able to purchase a home without a downpayment. If you cannot afford a conventional mortgage then you have no business buying a house.

Some critize saying that people are too lazy to get a second job, need to cut out fastfood & brown bag lunch, drop the cellphone service & so on. While I’m sure there are some out there that could continue to cut back there are many more who have cut all “extras” out and still do not have enough of an income to satisfy their monthly expenses. Is it their fault that the cost of gasoline is beyond reasonable yet an absolute must have to survive? Is it their fault that the cost of feeding their family has risen dramatically over the past year alone? Is it their fault that employers think a 3 to 5% annual raise is something to be happy about? It is nearly impossible to survive on a single income these days. Three years ago my husband’s income was more than enough for our family to survive on & then some. Now, even after getting rid of every extra “luxury” we were acustom to having, we are scraping by each month with two fulltime incomes and I mean literally scraping by with nothing much left to speak of when all is said & done. “WE” did not do this do ourselves. “WE” did not make poor financial choices. “WE” are victims of an economy gone bad and “WE” are paying the price. For some, it is not a choice to stay or walk away from a mortgage… it’s the simple fact that there is not enough money to pay the payment. Whatever a person’s reason is for walking away, it is not our place to pass judgement. We have no idea what they are going through and quite frankly it is non of our business. Bottom line is, if it meant paying a mortgage payment over putting food on the table for my children… well, I would choose my children. A house is a material object. A possession. In one way or another it can be replaced.

It doesn’t matter what Congress or the next President does for the housing market because the speculators and thieves have already stolen all the money! The people left over will NEVER be able to pay their mortgage because they simply don’t have the income to support it. Housing prices are still over inflated (especially along the coastal areas) and shady lending practices have lead to this downfall. The government needs to STAY OUT and let this market correct itself – it’s long overdue. People are already walking away because they know the property isn’t worth sacrificing other priorities in their lives (i.e. they need their credit cards more than the house).

As painful at it may feel, there comes a point where survival is more important than pleasing the lender and saving your credit. We live in a country where there are second chances given to those who have made mistakes in errors of judgement and need relief from the burden that the debt has put them under.

If the situation is such where the Mortgage amount is greater than the current value, it doesn’t make sense to continue down that path.

Walk away? Well, I guess that’s one way to handle the problem but then you introduce a few more such finding another place to stay, moving, the calls from the creditors, damaged credit, etc. etc.

There’s a much smarter way. We call it negotiation. Banks and mortgage companies don’t want your house. They want their money. They all understand that getting you to pay something is better for everyone involved then to go through the costly process of foreclosure.

Think about it. You own a house that has a payment that is now $1300 per month since the loan reset the rate. It was a more comfortable $600 a month before. You collect your paperwork and go to the lending institution. You sit down with their loan officer and explain that you cannot make that large payment and that you would like to work out an arrangement with them. Since they want their money and not the troubles of selling a house that is bringing in NO money since they foreclosed (i.e. kicked you out), the loan officer will be interested in working with you. Maybe they can’t go back to $600 a month but maybe they will go $900 a month and your financial s indicate that you could handle that much.

It’s a win/win case. You get to stay in your house and not have to worry about the foreclosure. The creditors will quit calling too. The bank will start looking for someone to buy the house but let you stay while they look as long as you keep paying the new agreed monthly payments. Since they are getting money for the loan, it won’t be a top priority for them to sell your home. And, who knows, you might get that raise from your job or be able to refinance later that will allow you to meet your obligations.

No. Walking away is not the answer. Talking to them is the answer. A load officer that won’t talk about it is a fool and you can always ask to speak to a different loan officer at the same bank/mortgage company.

Now some of you are saying nope. As a landlord, I can tell you that some of my best tenants were good people who bought more house than they could afford, got into the same trap, and negotiated with the bank.

I think many of the mortgage brokers who insisted that a house was worth more than it actually was should buy the homes back from their clients with the bonus money they made in the last bubble. I also think it is high time some buyers learn some simple–or should I say,compound– math,interest rates in particular. Most importantly, if a buyer can’t afford the lawyer to examine the documents, perhaps this is a clue that they may also not be able to afford the mortgage.
Oh, and don’t ever sign for the most expensive loan in one’s life simply because one is “on the spot” to do so. Examine the entire contract, or get someone fluent in contract law. Shame is not an issue–comprehension is.

The more that walk away the more the values shrink. Bad deal for everyone. When the going was easy no one had trouble borrowing. The banks are to blame as well for actually thinking these risk loans would work. Maybe they made enough money anyway? The more something costs, the larger the closing costs, insurance, ect. More money moved in the in 2003 – 2005 housing boom than in the previous more conservative (democratic rule) from 92 – 2000. High prices means more money. The smarts never borrowed additional money from their homes. The law should be- People now have to pay or stay out of the home owner plan forever. 30 year mortgage rates need to dump down into the 4 percent range to support even the reduced current values then freeze for awhile. The banks should be forced by the feds to correct their bad judgments. This should have happened before any bail out money.

You walk away, , I PAY . Thanks for nothing, buddy. Sleep tight.

I’ve been checking this board from time to time today and i too am quite amazed at how many people think it’s ok to walk away from your responsibilities as a home owner.

However, there is truely a bright side here. While you bankrupt, bottom fico score feeders begin to abandon your home, I will be actively seeking to buy them from you. In the event I will miss you before you send the ol chain mail, I will happily show my your lender 75% of the homes actual value.

In 10 years, you will be lucky to get a 10% fixed mortgage and I will be selling your prior house for 100% profit.

Cheers, ENJOY WALKING AWAY FROM YOUR HOME!

Walk away whenever you want.

If the “owner” was rich enough, he’d have accountants figure out how to write if off. For the not-so-rich, walk away!

The banking industry is totally corrupt. It sets its own guidelines for loans and then breaks its own rules. And, no question, lenders LOVE people who love to go into debt…as long as you can keep paying the INTEREST on the debt…..so…..yeah…
I say WALK THE HELL AWAY! Find peace of mind again and let the BANKS sort it out.

As long as you don’t HAVE to sell (e.g., having to relocate for a new job), and/or can still make the payments, you should stay in the house. Eventually, the market will turn around. If you walk away, you’ll still have to pay rent ($$$), so you might as well stay in your house and get the mortgage interest deduction and save your credit rating.

Maybe we can all walk away from our responsibilities and hope someone else picks up the pieces. If you bought property to get rich, you gambled and lost. Too bad. If you bought a house to live in, you should have thought about it first instead of jumping into a variable rate loan. Too bad. The housing market should be allowed to crash. That is what a free market does. Then other people can buy them.

What happened to personal responsibility?

My wife and I are in our late 20’s, make a mid six-figure income and live in a very modest 250K town home while friends making under 100,0000 are facing foreclosure on their $400,000 estates. Now, the thousands I’ve invested in the market … rather than a home I cannot afford … is taking a 20% loss initiated by the mortgage meltdown and the social services I never use will wind up under funded, funneling even more of MY tax dollars to bail out delinquents.

It’s a dismal future for those of us that are “doing the right thing”.

…And don’t bland the mortgage companies. Blame the previous generation that did not instill responsibility or our “gotta’ have it” culture. Middle class demise is the result of their own frivolous spending habits, $3.50 lattes and 21% APR credit cards.

I love reading the comments from these prostitutes for Corporate America blame the victims of predatory lenders and support our laws that treat companies better than human beings. Even in my case, I was lied to by my lender who said that I was “pre-approved” (not just pre-qualified, mind you, but pre-approved — i.e., credit, income, employment verified, etc.), for the same loan I had on my old house. Then, when I was living in temporary housing, with most of my possessions in storage, the scum-bag lender said I had to do a 80/20, “low-doc” loan to get the loan. At that point, I had thousands of dollars in the house, the house was now complete, and I would be out thousands and have no house if I didn’t go along. Problem is, now I have a high interest rate on the “20″ side of the 80/20 loan. My exact situation is never discussed in the media, because all the focus is on “subprime” mortages with teaser interest rates. However, it is another example of out-of-control, do-what-ever-you-want laws for corporate America.

The banks who created the fancy financial vehicles out of all sorts of mortgages and sold them to each other can write them off to the tune of 100 billion dollars or more combined. Why can’t individual homeowners do that, just like those banks? Business decision.

First off – If David bought two houses with no money down in a one year time period in the same area…that means he bought them both as owner occupied which measn he commited fraud. This is a huge part of the problem. The mortgage crisis is not caused by honest Americans who bought homes for themselves or to raise a family. It has been caused by scumbags like David who thought they were smarter than everybody else and commited fraud to go out on a limb and speculate on the future in real estate when they truley cannot afford it. And guess what…we might have to bail idiots like David out with our tax money if the Senate gets their way. If the reporter knows of Davids whereabouts…please shoot him before he reproduces………

Does anyone realize that the “money” that was lent by all of these banks and financial institutions never existed in the first place? It was created out of THIN AIR, which is why their pyramid scheme is now collapsing on itself. When your mortgage was “originated” the bank or financial institution simply created a bank draft or ledger entry in their books, and you agreed to start paying interest on this ledger entry in return for giving up claim to the title of the property you bought.

Its not about ‘discovering’ a new way of thinking sayin that its alright to just walk away from major bills and committments. That helps destroy the economy just as much as those companies that commit fraud.
Its not about ‘deciding’ whether its OK or NOt OK.
Most people werent looking to get a mortgage live in a house, make a series of payments on it, then default and walk away.

This is a tough decision for most all people and it hurts your pride, its frustrating and it hurts your future attempts at housing and investments.

Because believe me that the lenders will Lay off everyone they can that are customer service, or loan servicing etc. But the jobs that will stay strong are the ones that Pound people’s credit scores and put derogatory, and in many cases Fraudulent and malicious entries into your credit reports.

Its bad enough you have to battle IDentity theft, its worse when your credit reporters are purposely messing up your credit reports beyond what they should do by law.

I never thought I’d end up in this situation! Always said, “How could you just LET YOUR HOUSE GO BACK”?? Well, after literally crying for over 8 months while it sat on the market and I watched my other bills become late…it’s time to walk away. I have to be proud of the fact that I’m a single woman and have come so far with my credit and independence…and I’ll get them both back!

As far as I am concerned these people knew they could not afford these homes and should not have been allowed to buy them. Now us people who are smart are going to end up paying for the stupid people.

The Federal Government is responsible for all the sub-prime stuff, proliferating and subsidising home loans. etc. If I had a 100% financed loan, I’d walk away too!

And these are the “smart” elected people who are running the country. It’s easy to see why the economy is a sham and that we are in a resession.

When the lender approved the mortgage, they priced in the fact that they may get the property back if it dropped significantly in value. They determined the interest rate they were willing to accept to cover not only an adequate return on investment, but also the anticipated default risk. If the lender, who presumably is a seasoned professional, priced their product incorrectly by underestimating their risk, that’s too bad. They set the rate to cover their risk and if they set it too low, they bear the burden of their mistake.

This is what scares the hell out of me. Walk away, is just adding to the problem and it affects everyone.

I bought my first 3 bedroom 2 1/2 bath house in April 2005 for $429,000, the American dream. We put $100,000 cash down out of my pocket, basically my wife’s and my life savings.

Thanks, to people who so flippantly WALKED AWAY there are REO (bank owned) properties in my neighborhood selling for $299,000 the exact same house model. So, God forbid if anything happened to me where I couldn’t work and we had to sell we would lose everything we have worked for.

So, no do not walk away, you made your bed by making bad decisions why should good hard working people have to always suffer for the stupidity of others. And don’t tell me the bank/lender didn’t tell you about the loan you received, what did you think was going to happened when your house payment was less than your car payment, even though your house cost 20 times more than your car?

As a new American citizen, I am tired of people shirking responsibility and expecting others to pay for their mistakes or expecting the government to bail them out. The government has enough problems, look at the 300 trillion dollar deficit.

I will say the bank did bring this on themselves to an degree by offering stated income 100% loans and if anything they should renegotiate or recast the current mortgage so people can stay in their homes. This issue has huge far reaching consequences that people don’t tend to think about, people who had retirement money invested in these lenders (eg. BofA, countrywide) have taken huge losses, the dollar has significantly weaken which has driven up all imported product costs, unemployment is the highest it’s been in 10 years.

Walking away will only continue to add to this epidemic, and I say shame on you CNN for even planting the slightest seed that walking away is the right think to do, that sort of thinking and misdirection is what lead the people who are in financial trouble into this mess to begin with.

I have to say that I do enjoy reading the different perspectives on the foreclosure crisis that is going on in America. Ultimately, if you bought a house that you couldn’t afford, tough luck. Don’t be a child and expect the government to bail you out. On the other hand though, I think a lot of the mortgage brokers who have written these ARMs should be in jail for fraud when they have manipulated stated income loans to get a borrower qualified. I have been a loan officer, broker, and underwriter. I understand the conditions involved, and I understand personal repsonsibility. If someone has a very very legitimate case for why they should be able to walk away for their home, they should have to go through a very solid qualification process to rationalize their exclusion. We do need better qualification standards for mortgage lending employees. But for those of you thirty-thousand dollar millionaires that wanted to look good but couldn’t afford it.. go hire someone to play a violin for you because you brought it on yourself. Thanks for reading.

Walk away any time you want. Just do not ask the government for any bailout or change in the credit rules to overlook future credit scores or references. I think the lender and borrower get just what they deserve for their greed. It drove up the prices of houses for the average person who just wanted a house to own.

Anything that will bring down house prices is a good thing. The market needs a major correction. Keep walking away folks!

I do think some things need to be more clear in the “Wait a while and it will clear up from your credit argument”. First anytime you apply for a mortgage you are asked if you ever had a home foreclosed on… EVER!! While yes its true, you can lie and say no once its off your credit report and most lenders would be none the wiser, you are still committing perjury. You are committing a crime, and it doesnt matter why or for what cause… a criminal is a criminal.. a rightfully shunned lower class within law abiding society.

Additionally… how do we know that lenders will percieve foreclosures the same in the future?… How do we know it wont become common practice to deny anyone who has had a foreclosure a home loan.. we dont!!… Personally, I hope these individuals will be permanently shut out of the market.

Walking away is a good idea – My guess is the next home you try to buy you will probably have to pay cash for.

I am also caught in the crunch, not so much with my mortgage per say but sky rocketing real estate taxes, and insurance premiums. NO it is not ok to walk away- what an irresponsible attitude. I was not even behind although I would be if my mortgage company did not work with me- People that walk away are no better than thieves and contribute to the downslide of the economy, like people that knowing charge up their credit cards and do not pay.

Since when is a parent obliged to send their kids to college? If you can pull it off after meeting your own obligations, fine, good for you. If not, have the kids work their way through state college. Then again, just tell them to take out education loans and then not repay them.

A mortgage is no different from any business transaction. If the deal is not profitable, and you aren’t benefitting in any way, it is OK to walk away. Both capitalism and our legal system permit a person to break their promise, or breach a contract, if the deal is no worth their while. Our course, there are economic consequences. But if you are willing to suffer the consequences, there is nothing immoral about breaching a contract.

Buying a home and taking a mortgage is a commitment. It’s not the lender’s fault if someone speculating in housing gets pinched. If they can make the payment these people should be forced into some kind of bankruptcy and made to pony up whatever they can afford to honor their obligations.

I think it’s okay to walk away only if your income isn’t enough to pay the loan and the lender won’t work with you — if you can afford payments by getting rid of expensive cars and forgoing vacation then you owe it to decent society to suck it up. Don’t make everyone else pay for your mistake.

The writing was on the wall with this market. It took a fool to think the prices weren’t going to correct themselves. The sad part is, those of us who did the right thing and waited are still going to get screwed. The losses from all these defaults are going to be passed on to the general population, and the lending standards have now tightened to the point where it’s much harder for even well qualified buyers to get a deal. This bubble was driven by greed, and I can only hope that the people who are forced to walk away will have bad enough credit to preven them from ever being able to drive the market like this again.

For the oh-so-sensitive soul who referred to walking away as ‘evil,’ consider this: you are a college-educated, single-parent homeowner who loses your job of 12 years, and after a year of failing to find work that will support even a modest house payment, you take a job offer in another city hundreds of miles away, because, after all, you do have to eat. Then you squeeze an entire family into a one-bedroom apartment whose rent is higher than the monthly mortgage you still owe—what do you do? Do you live on the street and continue to make that house payment? Things aren’t always black and white. Think about it.

I don’t think it is a good idea to walk way from your obligations. If you can stick to the house with refinace options with the lenders help you can do so. In Southern Calfornia, renting cost also going up. You have to live under a roof right?

Consider either you pay with refi more money payments or pay to a landlord.

Why we have this mess? It is because of some home owners took the chance of thier home values go up ,up and up. This is not true, nothing will go up for ever. Some home owners were bought inot mess with the unfair lending practices and borrowers don’t have knowledge of it.

It is going to take 2 or 3 years to clear the clutter we have.

Sorry to see the familys suffer and economy downturn.

Hey! injured on my job. Unfortunately the company’s insurance company was negligent in getting my OJI payments to me. The mortgage company would’nt work with me on a repayment plan or assist with refinancing to a fixed rate. My choices a) walk away. b) file bankruptcy. tie a potential workers comp settlement up and still lose the house after losing my job. WHAT WOULD YOU HAVE DONE?

It is okay to walk away when my mortgage payment jumps by 335 dollars a month from 1415 to 1750 because of taxes and insurance. I live in Florida and my husband and I are working just to pay our mortgage. I am trying to convince him to let us just walk away from it we are killing ourselves to make the payment.

I don’t think it’s OK to simply walk away from your mortgage, UNLESS you have a very very very good reason. It’s not enough that you’re upside down. If you can still pay, you should. HOWEVER… The big banks, like Citi, BofA and others went ahead and “wrote-down” their assets and thereby relieved themselves of having to pay up yields to their investors. So, if the banks that made all that money on subprime loans can walk away from their obligations to their investors, the folks who paid with their own hard earned cash for houses, which are the actual “assets” behind “asset-backed securities,” should be able to do something similar. For some that means simply walking away. What’s good for the goose, ought to be good for the gander.

I’m a renter that has been thinking about getting into the housing market over the past several years until I tried to secure a mortgage about 6 months ago. I found it a little odd that no REAL documentation of my income was necessary and the broker was happy to rely on the “good word” of someone he did not know the day before….me. The $4200 monthly after the 20% down on the conventinal loan seemed steep for me. After talking to the broker he pushed me that I could afford it and that his firm would loan me right at double that amount I was asking for if I needed it…which would have totaled 65% of my net monthly income in a payment….with no tax returns necessary for proof of income.

I backed out knowing if money was essentially this free in the lending industry the crash was eminent. The following week rates on this type of property (TICs) went up a point and then the sub prime melt down was the following week.

My thoughts: If you got more than knee deep and understood the mortgage climate, you are an idiot if you did not see this coming or did not read/understand your contract…and if you think I’m wrong, you are probably jazzed about getting your $600 check from the Bush administration to go buy a bunch of other stuff you don’t need.

Happy Renter…looking to do some bottom feeding down the road.

Walking away is just another example of irresponsible individual behavior that is growing in the great USA.
- The “problem” is never their fault. It is always the fault of someone else.
- These people are the first to say that the government should do something or that the banks are evil. “Someone needs to take care of me”. Obviously they cannot take care of themselves.
- So many want a “free” ride or a quick buck. These people do not want to work for anything.
- When the going gets tough, these people blame or try to escape
- Yea, we will all pay for these deadbeats.

No, I do not think walking away from your house is the right thing to do. I would not do it. I am a mortgage broker in louisiana and I have watched my income fall by over 70% in the last year. I too am faced with what bills to pay and which ones to not pay. I belive the mortgage meltdown is the result of crooked mortgage brokers and appraisers and those are the ones who should be held responsible. I agree with some of the previous postings, that people need to take responsibility for their actions. I’ve had to compete with the predatory lenders and no matter how hard I tried I could not convince everyone that a 3 year adjustable rate mortgage is not fixed, which those predatory lenders told you was. Also, when people lose their job to someone in India (call your phone company or internet providers customer service department)or buy an American car made in Canada or Mexico, is it any wonder why people can’t pay their mortgage. When the cost to fill up your car with gas triples and your income stays the same or goes down, you have to ask yourself why? In my opinion the problem is much larger than people walking away from their mortgages, it is the state of the American economy. The DOW is now about where it was when Bush took office (maybe a little lower) and the NASDAQ is at about half of where it was. One thing people forget is that after 6 months of being unemployed you are no longer a statistic, you are still unemployed but no longer count.

I think that every mortgage that goes into forclosure should be investigated. Everyone involved from the mortgage loan officer to the appraiser. As it is now the lawyer administering the foreclosure stands to make a substantial amount of money, why not add on a few more dollars and track what lender, broker or appraiser’s transactions are ending in foreclosure. I’m sure it won’t take long for the investigators to find who did what and to what extent they defrauded borrowers. A friend of mine was the victim of a flippers scam, basically the person who orchestrated the deal found an appraiser to appraise a property significantly higher than market value (when I say significantly higher I mean appraising a house worth $75,000 for $170,000) and also found a mortgage broker willing to defraud the lender with a loan application that had very little truth in it. When my friend asked the broker why his income said $7000- a month the broker told him it was okay. My friend said I’m a college student, I don’t make that kind of money. Then my friend had to sign a notice of intent to occupy the property and my friend said I’m not going to live there I already have a house I pay a mortgage on and live in, the broker again said it was okay. When, my friend got to the title company he again started asking questions and here the title company told him to quit asking questions and sign the paperwork. So my point to all of that is No, don’t walk away from your house, take responsibility and if you’re one that falls into the category of my friend call the FBI. There are at least 3 people involved in my friends transaction who committed fraud. There is a place for those people…. it is called prison.

its Paris Hiltons fault. She flaunted her wealth and people all felt a sense of “hey, I want that too” a huge house, a hummer, designer fashion aka(paying for clothes that have a logo that will advertise a business- dumb!), plastic surgery on credit and all the doggy clothes and jewelry. These people have no personal responsibilty for anything.

Market speculating defaulters should pay their debt by doing community service.

I would say walk away – but not before calling your bank and giving them your circumstance – Id say on their side they gotta have money coming in – and id think it sweet justice if companies ate the bad loans and just accepted the loss out of bad judgement. I had a choice in 2004 to bay a modest home for a fixed mortgage or to get a nice pad for even a cheaper rate with adj or int only – At the time I have to say that agents made those loans sound like the next best thing- but I stayed with the small house and I am happy with it. I dont think it right to continue bankrupting America bc basically GOVERNMENT must monitor and intervene in these practices!!! Everybody likes a total free market – I DO NOT – a free market opens the door for the wolves to prey on the weak (not even weak – people who just need a chance) IF I HAD ONE WISH – id get a gigantic cruise ship – a luxorious boat – and get all these so called CEO’s and their SEVERENCE packages bring them aboard – my ship will set to sea with my patrons – once it got to the most remote, frigid, part of the world – Id sink it and with my one dingy i have available – id get my favorite snacks – sit back and watch them drown – as they have do so to so many Americans – and once the last one has given into fate Id radio for help – and get on with life….but thats just me.

When is it ok to walk away from a promise and a commitment? When you want to let the world know your word means nothing.

WHATE DO YOU FOLKS EXPECT, GREED BREEDS GREED. Reap what you sow. All of these bankers/ lenders are thieves to begin with. GIVE THEM A TASTE OF THEIR OWN MEDICINE. Those idiots in turn, will be looking to the government/ YOU AND ME…to pay this mess up. It’s all of our fault. BUT THIS IS THE GAME THAT WE ALL PLAY CORRUPT AS IT MAY BE. Have any of you skipped out on jury duty? Tried to avoid paying a parking ticket…SAME THING! CORRUPT TO THE CORE! SUCK IT UP!

If you work you can always afford your payment, to many people take mortgages they can never afford especailly minorities, trust me, stop having babies and work for a living, take on more than one job, educate yourself than get a mortgage and have kids. If you have a man and a women and everyday if you each put in $50 each, you can both work at a fast food place and make that money, you can afford to pay $3k a month..If your broke and dont want to work and want to live off the goverment than Hilary and Oboma is your girl, if you want to live the american dream in the greatest country ever and actually be a part of capitalism vote republican.

All these companies knew exactly what they were doing when they started giving out these “adjustable” rate morgages… you know what, they deserve it. Walk away, rent for 2 years, build your credit back up (wont take longer then 2 yrs for most) and purchase a new home at a FIXED rate knowing better that this time.

So-called mortgage lenders have engaged in predatory practices too long. While I would not personally walk away (I actually think this would have a very negative impact for one’s financial future), I shed no tears for the mortgage companies who have to pick up the mess.

At the same time, I don’t have much sympathy for people who were foolish enough to get a ridiculously huge mortgage that they couldn’t afford (or would soon be unable to afford). I initially had a 5-year ARM, but refinanced before the 5 years were up. Did I get the absolute best rate when I refinanced? No, but as long as I keep my job, I’ve got a mortgage that I can afford.

Just as investors have created products that have been too accomodating, consumers must take some of the responsibility themselves. What part of living within your means and READING WHAT YOU SIGN, and doing research on your lender, and asking a friend or family member for a credible lender do you not understand? I have been in residential lending twelve years. It truly saddens me that so many have fallen victim to predatory lending. However, consumers must understand, THERE ARE STILL LEGITIMATE LENDERS OUT THERE!

I agree that home owners should be held responsiible. If you have a standard non-recourse you have an obligation to pay, and your responsibility if you don’t pay is to turn the house over to the mortgage owner (in good condition) no more, no less.

You are not responsible for going to jail, or selling all your worldly possessions, or taking two or three jobs, or burn forever in the fifth level of Hades.

The problem is that the mortgage lenders made it too easy to get a mortgage (no money down, interest only, etc.) and did not protect themselves because it would have cut in to the fees at the various levels. Well boo-hoo. You lost money on the mortgage. Stupid business decision. Maybe now lenders will be a more careful in how they lend, and houses will drop to more reasonable levels.

Of course if you lied on your application, all bets are off and you deserve to be charged with fraud. Similarly with the mortgage brokers who lied to unsophisticated buyers about the terms of mortgages should also be charged.

Not all mortgage lenders engaged in the subprime lending. Credit Unions followed the proper protocol when granting mortgage loans, but lost a lot of business because they would not put people in houses that they could not afford.
Yes, the greedy brokers contributed to this, but so did the greedy borrowers. I do not support anyone walking away from a financial obligation, because in the end EVERYONE pays. They are not only walking from the homes, but their cars, credit cards, student loans etc…. There is simply no respect for good credit anymore. What a shame!!

TAKE THE DOG OR CAT!!!!!!!!!!!!!DONT LEAVE THEM BEHIND TO STARVE TO DEATH. ITS SLOW AND AGONIZING, PLEASE AT LEAST TRY TO FIND A SHELTER.

I think this is a two sided issue. Scheming speculators that drive the market wild like this David guy should have their feet held to the fire right down to their last nickel. Walk away – my ass! On the other hand, the poor schmuck that signed a bad loan for his only house should have a mediated settlement mandating the bad paper be rewritten at a reasonable fixed rate so as to allow them to keep their home as long as they can make reasonable payments.

People like to turn this into a moral dilema, but it isn’t for the most part. It’s merely a matter of pros and cons. You will take a severe hit to your credit if you default. But, if the market has turned so far that there is no way to get out, and no way for you to ever get even, then a voluntary surrender to the bank (Deed In Lieu of Foreclosure, as I believe it is called in some areas) does seem to be a possible option. The least you should do in such a circumstance is to cooperate with the lender (which will shorten the time for them to ready the home for resale) and not trash/strip the house, as a small measure of courtesy and respect to your neighbors, if nothing else. We bought our current home as this type of foreclosure, and I always respected how the prior owners (who fell on tough times) conducted themselves in such a difficult time.

I agree with the comments that say that fiscal irresponsibility on the part of borrowers and lenders alike led to this situation. But like all short term debacles, this one will pass. Over the next few years, if rates stay reasonable and prices come down, people who had been priced out fo the market will come back in and buy the homes that are now more reasonable. The big losers in this deal will be (1) The people who bought too much house and take a bath on the sale. losing the house or walking away. It may be 10 years or more before they can buy again. (2) The people who bought too much house and can afford to stay in, but just barely. Making the minimum payment they possibly can, perhaps at a higher than average fixed rate due to their credit and debt load. (3) Those who can afford their house and payment but looked at their home like an ATM, cashing out equity for items like vacations and SUVs. These folks will be unable to repeat their prior performance and heavily indebted, will have to make a significant change to their lifestyles, until (if ever) their income matches their expendatures. With luck, my family will do well over this period, having bought less house, in a fixed 15 year mortgage. We have the means to buy more house, and a new van (our Toyota is about 8 years old) but instead we keep up our home and equipment with care and sweat equity. Living this way allows my wife to stay home with the kids, as well, rather than our lifestyle demanding that we both work. Perhaps this is a great time to re-evaluate how we, as Americans, live and perhaps consider a simpler lifestyle. Instead of lavish dinners, more family meals at home. Instead of grand vacations every year, perhaps more picnics and simple pleasures together (bike riding as a family, etc.) Looking back at the conservative nature of the Depression generation (Baby Boomers) maybe they were on to something afterall. Maybe it’s time (with a weak dollar) to once again become the manufacturers and suppliers of the world, and let other people buy our stuff for a change, rather than being the dumping ground of every single type and form of consumable the world can possibly find a way to invent.

When the market was Hot I attended a seminar wherein the LENDER present suggested taking triple or quadruple (80-10-5-5) loans to get no-down status. He said – “that way if it goes to hell, just walk away”. I say, walk because these idots knew better and made the loan out of greed. Me? I got a nice old-fashioned 30 yr fixed, on less house than I could afford, thank you.

If it is the only option for a family to walk away, then now is the time. I have 3 young children and bought my home a little over a year ago. This was new construction and we locked in at the end of the Housing boom. We owe $295,000.00 on our home and have had it on the market for 8 months with out one showing or offer. The homes in my community (all new) are either in foreclosure or way below market value. How can a family compete. Similar homes are selling for over $100K less them ours. Who wouldn’t steal a home at that price? I work 2 jobs to support my family and barely make ends meet. Althogh I have a fixed rate mortgate, the escrow has gone up due to taxes and insurance cost in Florida. We are at the end of our rope and the stress is worse then walking away. We are trying to have a quick sale just to get out. Because there are so many empty homes, the properties have gone to hell. We have always been hard working and responsible people with excellent credit. We have tried re-financing to stay in the home but were told that the value of the home will not allow us to do so. The home was appraised over $70K less then we owe. We have no choice but to walk away. I do not know how the value of what we paid will ever recover with the prices the homes are selling for now. if it ever does recover, it will be a very, very long time. Unless you are in this kind of situation, please don’t judge all people the same. Yes, there are people who can afford the mortgage and just are walking away because they have another house to live in. We will not have another house for many years because of this and our family is suffering.

Walk? Why not run and now?
Every Real Estate Agent will always say, “Now is the time to buy”.
Well, right now the time has come to run away and not to look back.

Hi, I live in an area, Modesto, Ca. that has a large number of forclosures. I have also owned a Real Estate Sales Company and a Mortgage Company for several years. I do not blame the homeowner when they walk away. Most have not choice. I see it everyday. Its not unusual to see the value $200,000.00 to even $300,000.00 less then what is owed on the home. Also the payments adjust to, in some cases, to 5 or 6 thousand a month. They just can not make the payment. When the lender is called, its mostly smoke and mirrors and no real help. I know of not one lender that has given real help to these homeowners in these cases. Until the lender gets real, walk away I say. Wait out the bad credit period and start over. In other words, what the lenders want, it just can’t be done. I sincerely hope the lenders get real fast, because they have not, as to date.

In the spirit of making $. The bank was in it to make $, the builder, and you too. Thus, I believe if you are foolish enough not to think of the future when you purchase your home, not taking the overall economy into consideration, it is your fault. You shouldn’t buy things that you can’t afford. Having said that, I believe if you are able to make the old payments prior to your ARM increasing, then the banks ought to work with the homeowners to allow them to make payments at a fair reasonable rate, and not at a ballooned rate. In the end, it will be a win-win for both sides. The bank is still getting their money as well as the homeowners able to keep their house and retain their credit rating. But, I do believe that society has come to a point where GREED is the dominant element from the corporations to the banks and to the individual homeowners. We gotten used to a quick gratification with fast-food drive through, instant heating with microwave oven. Now, we want to make fast bucks. Not to mention the biggest culprit of them all the Oil industry. I think the US economy will do a lot better if from top down everyone is willing to give as well as taking… This will keep a lot of jobs in the US, and the US economy will prosper because of this. We need to share the wealth and not be so self-centered and get so GREEDY!!!

Dave from Anchorage- you are 100% correct.
You aren’t taxed until you sell- same way you wont feel the drop in value unless you sell. idiot suggestion to walk away- what an irresponsible article. and Patti from brooklyn- you’re WRONG. These home buyers – families included – LIED about their income to get the loan. They lied. now they suffer. No one forced you to buy a house or refinance. When I bought my house- I didn’t even know refinancing was an option- I expected to pay down for 30 yrs or sell. I came up with 70K to do it. No tears, no help for the liars & speculators. You want some REALLY GOOD advice about getting RICH?
Get Rich Slow

All I can say is… the majority of the people in this country are strait DEAD BEATS!!! O, you don’t care what other people think about you…that is exactly what is wrong. The fact that CNN Money would even publish this crap is unbelievable. I am officially ashamed to admit I am an American.

No it’s not OK. People need to honor their commitments and buy only what they can afford in the first place.

It is not “OK” to walk away from any contract in my view, but what is REALLY not “OK” is for CNN Money to endorse the practice! The speculators and status-driven buyers not only should have seen this train approaching, but I really now feel that they deserve comeuppance and they are getting it. When they “walk away” as CNN encourages them to do, they will find that they are not absolved of the costs and legal fees as well a other losses incurred by the lender, so it’s not the “quick-fix” after all.

ALL IS FINE WHEN HOME VALUES ARE GOING THREW THE ROOF, BUT WHEN THE FIRST SIGN OF TROUBLE COMES PEOPLE START JUMPING SHIP AND LEAVE THE PROBLEM FOR SOMEONE ELSE TO DEAL WITH.WHICH IN A ROUND ABOUT WAY AFFECTS US ALL.WHEN YOU BUY A HOME ON AN ARM YOU ARE TAKING A RISK THAT YOU PAYMENTS MIGHT GO UP THATS A RISK YOU CHOSE TO TAKE.AND NOW TO HOME VALUES DROPPING WELL THATS A RISK WE ALL TAKE WHEN WE BUY A HOME.BUT WHAT MAKES IT WORSE IS WHEN PEOPLE DONT TAKE CARE OF THE OBLIGATIONS THEY AGREED TO BECAUSE THINGS DIDNT GO THE WAY THEY PLANED.IN THE END IT COMES DOWN TO PEOPLE BUYING HOUSES THEY REALLY CANT AFFORD!!IT IS GOING TO HURT US ALL EVEN THOSE OF US THAT BOUGHT HOUSES WE COULD AFFORD IF THINGS DIDNT GO THE WAY WE PLANED!

Walk away? Depends. You have to live somewhere.I knew some in CA who chose to tough it out as they considered it “rent” The market eventually turned around and they were whole again.

It depends, you have to live somewhere, analyze your cash flow / priorities /and / long term results!!!

BUT – don’t expect sympathy for your idiocy!!!!!!!!!!!!!!!

The problem is Americans are wasting their money and living above their means. Act You Wage and listen to Dave Ramsey (www.daveramsey.com).

QUIT YOUR CRYING and PAY YOUR BILLS!

It’s not ok to walk away. If you bought a home through a lender you signed a contract saying you would repay the loan. I feel people who are struggling with their loans should cut spending in other areas. I have seen people who complain about the price of a gallon of gasoline, but drive a huge SUV many of which speed by me when I’m driving slow in order to save gas in my small gas efficient sedan. These people who just “walk away” cause the other taxpayers to pay for their default. The lenders loaned money knowing the borrower’s credit was shaky. The lenders are to blame and the borrowers who borrowed the loan are the ones who should be held accountable.

We seem to be missing the point that a mortgage is a CONTRACT. Walking away is breach of that contract and should never be condoned — either morally or legally. Americans seem to have ZERO integrity these days and this is a great example. As a minimum, those who wlak should NEVER be able to get credit — let alone a mortgage — for life.

It is never okay to walk away. You signed an agreement. It was your responsibility to understand the terms of the contract. If you ignorantly signed the mortgage without reading the terms, then shame on you. Bad lending practices would not exist if people would refuse them. Sure, you may have to go back to apartment living but so what? I’d rather live in an apartment than disgrace myself with a dishonorable action such as defaulting on my promise.

Why am I not surprised that this is going on. Personal accountability for one’s actions when it comes to taking financial risks is obviously a joke. If multinational banks can be given help for their mistakes, then why not the home owner.

It’s not.

Can someone say Enron? Yeah, its amazing to me that people are judging other people for having to walk away from a bad investment, real estate is an investment. The banks/lenders are the ones who made it change from a long term investment to a shot term investment. What is happening now is referred to as “Calling and Shorting”. Someone invested money in you, they are calling for an increase in return and/or payment. You are unable to pay them, thus other lenders/buyers/sellers are shorting you. If people want to place blame somewhere well then look into the mirror; do you have to eat all the food at the Claim Jumper? No but you do and that’s why you are fat. Do you have to buy a SUV, boat and eat out everyday? No but you do and that’s why you are fat and you take up more space on planes and trains and it bothers me but I can’t force you to diet. And so the same is true for people walking away from bad investments thus making other people suffer on their block, neighborhood etc.. Blame consumerism and MTV…and yourself fatso.

The example of David is the problem in our country of people not accepting responsibility for their actions.

“He bought two properties in Hancock Park, west of downtown, using no-down, interest-only mortgages in 2006. He paid just over $1 million for both.”

He obviously bought these to make a profit and use them as an investment. He hopped on the band wagon then and is doing it again now. My home has droped 50,000 at least,and my family and I are not running away. it hurts everyone when people dont pay their debts.

A little over two years ago we
refinanced with an ARM. We were told
that we could refi in two years bfore
the ARM adjusted and get a lower fixed
rate. Within two months, I took an $800
per month decrease in my salary. I got a
second job, but was usually only one month
behind on my mortgage payments. When I
tried to refi in 2007, it was a no-go.
We were struggling to keep up with the
current mortgage payments, and after contacting
the lender, the payments would only go up $300
a month rather than $600. Not everyone who walks
away are irresponsible. Some us were
just caught between a rock and a hard
place. Perhaps our original mortgage
broker shouldn’t have assured us that we’d
be able to refi. Perhaps my employer
shouldn’t have cut my wages. We are victims
of our circumstances. My bet is that
more people who walk away faced the same
walls that I did.

We saw this abandonment of homes in Houston in the 1980s. Many people left their keys and left town while going to another state and buying another house. Houston was devastated for years, but I understand things have come back.

Before you just walk away you better know what your rights are. Many people have mortgages that they may be liable for even if they walk away. In California if you have a 2nd mortgage that was not used to ORIGINALLY BUY the home and the first forecloses you are still liable for the debt to the 2nd mortgage. Many people can qualify to file bankruptcy and wipe out the debt to the 2nd BEFORE the foreclosure but MAY NOT BE ABLE TO QUALIFY afterward. Ignorance can be costly. I know because I am a Sacramento attorney and a CERTIFIED BANKRUPTCY SPECIALIST dealing with these situations all the time. In some states the 1st can foreclose and still sue you. Learn the facts before you make mistakes you cannot undo. Most bankruptcy attorneys will give you a free consultation (I do). Even if they charge you, it is nothing compared to the cost of making a mistake that can cost you many thousands of dollars.

It’s never OK to walk away. All the people that are running from the trouble they got themselves into are dragging the rest of us down too. These are probably the same people that max out their charge cards then file for bankrupcy protection. They need to suffer the consequences of their actions.

This is what happens when the old rules about owner equity are thrown out and folks can buy property for $0.00 down. When I bought my latest home in 2000, I put 20% down to get the best interest rate. When the new owner has that kind of investment, he/she won’t be so quick to walk away from it. The bankers removed this traditional barrier to ownership, and you see where that’s got us. Walking away may be the LOGICAL choice for those who have no equity and a toxic loan.

It is not ok to “walk away.” Buying a house is a big decision and above all a big commitment. Its not an impulse buy people! By walking away all they are doing is hurting everyone and blaming anyone but themselves. We’d all love to just have what we want, but the world doesnt work that way. To you people that are doing this: I don’t want to pay for your mistakes. It isn’t fair, reasonable or ethical. It is downright criminal. If you’d done your research you’d have know what you could handle and what you could not and wouldnt be in this position in the first place…. That’s why i’m not, despite my desire to own more. I bet these are the same people expecting the govt to assist them with other things and when they get older. What message are you giving the next generation of buyers & taxpayers? You’ll find out when your a Senior and need help with something… unfortunately we all will.
In the case of many of these irresponsible and selfish people I’d advocate the establishment of a debtors factory where you work it off through an assisted program (contributed to by corrupt lenders). If you were truly committed then you should be willing to work off your debts however you can. This will cause an enforcement and reform in the lending industry. Problem solved.
Ignorance and stupidity aren’t good enough excuses anymore, the information is right in front of you. Stupidity and willful ignorance should hurt. Unfortunately this is a very good measure of the sheer lack of applicable education in this nation. I bet half of these bad borrowers knew all about Britney Spears and what she was doing, yet were clueless about the roof over their heads….

Business decision? Since when is it OK to borrow money and just decide not to pay it back? Only one name comes to mind. DEADBEAT!
Nevermind what you’re doing to financial institutions who are forced to layoff workers and move their positions off shore to make up the difference.
Hey as long as you’ve got some change in your pocket, more power to you!
Your credit is your word. What good are you if your word is worth nothing?

A man as as good as his word. When you borrow money, you sign a promise to pay it back. That is your word.
If you “walk away” you’ll never borrow money at good terms again and if enough people do it, nobody will ever borrow money at good terms again.
Be responsible and honor your commitment.

I am a mortgage broker and I know that all these lenders were offering us so much money to offer these ARMs and exotic mortgages. Is it okay to walk away? At the end of the day, you have to look out for your best interest. If someone is half ass smart, they will find a way to negotiate, prolong or come with something creative. If you are totally SOL, and you have a choice of not paying for your kids college, get divorced or simply go insance trying to keep up with your liability. Than it’s fair game to walk away. This country was designed to give second chances. It is survival of the fittest, I have lost over 150K in my house. But, when the market was HOT, I made tons as well. I feel bad for those first timers, who thought they had it down. I guess fast and furious does not always win the game.

Anyone who walks away from his or her responsibilites deserves the repreussions. If people would accept their responsibility for their actions and not “feel” it is up to the government (and in the United States, we the people are the governement) to pay for their actions, the United States would be in a lot bwetter shape financially, morally and socially. Stand up and be a man!

unless he is a total moron ( iq below 99 ) he should be arrested for acting without a brain.

It is nothing short than “lack of character” to just walk away. I couldnt afford to buy a house in SoCal years ago and had to hear all my friends bragg about thier rising equity. I waitied “unitil I could afford it” and then took advantage of a foreclosure with “a fixed rate” and a mortagae “I could afford” who doesnt want to live in a mansion, but if you cant afford it, you cant afford it. When they signed the mortgage papers “like I did” they should have been resposnsible and realized what they could and coulnt afford. I have no sympathy for those who tried to “work the real estate system” and lost. Grow up, take charge and show character. Debt is to paid back, not walked away from.

I’m truly amazed at the number of people that make risky investments and then want everyone else to pay for their mistake. If someone was dumb enough to sign up a variable rate mortgage they should be forced to live with it and pay for it. I’m sure a majority of those people drive (leased) BMWs, eat out all the time, go on vacations and waste an exorbitant amount of money on “designer” stuff. These people need to get their priorites straight.

The answer is really quite simple. If you have the means to pay, then it is immoral to walk away.

If your financial viablity is questionable, then you are obligated to make every effort to find a way to honor your debts.

Walking away should be the last resort and is a moral choice only when all other options are exhausted and there is simply no money to make payments.

Let’s face it. We live in an incredibly spoiled culture with a ridculous sense of entitlement. People got way over extended and now dealing w/reality is painful. Honor your debts, folks and be true to your word.

You know who is will be making all the money off of this mess. Lawyers working on the garnishment of wages. Take the loss on your house now and walk away, you will just be paying back all of what the bank loses plus fees and interest when they take your paycheck for the next 15 years. All they have to leave you after garnishment is 165 dollars pre-tax (30 times federal minimum wage)look it up, try living off that. Also the lawsuits (judgements) stay on you credit report for up to 15 years good luck buying a home after that.

Once upon a time, there was honor. There is no get rich quick… you sign a long term debt for the long term. It is time to take responsibility for your actions, however misguided they were. There was a time you paid you debt and did not expect a bail out… If these home buyers had made a big windfall, I do not believe for a minute they would share that windfall…so why expect someone to share the risk… grow up an be responsible for your actions.. if it was too good to be true, that free money, then it was… so get over it.

I work as a Loan Officer in the mortgage industry. Yes there is plenty of blame to go around, but it comes down to someone following through on their word, (contract). I am grateful that our bank requires 10% down before we will even talk to someone about a home loan. You would not believe how many people would just come unglued at the suggestion that they should save money for a down payment. How dare someone reccommend they do with a new Lexus, big screen TV, an i-phone, etc. in order to buy a house. Many would get down right angry when it would be suggested that they couldn’t afford the home. So naturally they went else where to obtian there mortgage from HELL! I guess we do get the last laugh on this matter. By the way our bank foreclosed on 4 homes in all of 2007 out of 125 million in mortgage loans!! It’s amazing that a requiring a down payment will help people fight to keep their homes.

The Federal Goverment wanted to slow housing down, they wanted to prevent a “housing bubble”. The Fed started relentlessly raising the fed fund rates to slow inflation driven by the housing boom. The problem is that they over did it, they kept raising rates until they sank the housing market. They wanted this mess, so they can have it! And its not over yet!

Absolutely not! People have no ethics or principles. I consider it immoral!

IT IS NEVER OK TO SIGN DOCUMENTS AND NOT FULLFILL THE OBLIGATION….YOU MUST PAY BACK THE LOAN…..WHERE IS THE PERSONAL RESPONSIBILITY?

With 20-20 hindsight, the responsibility for this mess is split three ways — between Alan Greenspan, the lenders and the borrowers. If any one of these three parties had behaved as an adult, things would have been OK.

We live in ‘interesting’ times.

“I’ve watched my neighbors buy boats,cars and go on nice vacations because of a 600.00 a month house payment on a 350.000.00 house while I pay 750.00 a month on a fixed rate and a 130.000.00 house.”
That about sums it up. I don’t take if they stay or walk… but if my tax dollars are going to be used in some ridiculous government bailout I may just lose my mind. Congress would make terrible parents…

Absolutely NOT! Words and contracts have meaning! NO it is not OK to “walk away” from a responsibility.

You signed agreements and counted the costs and rewards and now you get to deal with reality and choices and ‘known risks’ and ‘harder to quantify risks.’

You cannot walk away from it anymore than I cannot walk away from it. P.S. Why in the world would a responsible CNN/Money even think of posting the headline in this manner???? Surely you are not advocating this kind of ‘walk away from responsibilities’ behavior, are You????

this is the most RECKLESS, IRRESPONSIBLE and DANGEROUS piece of advice ever written-CNN YOU SHOULD BE ASHAMED-THINK BEFORE YOU TYPE! And fire the writer!

I guess you have to ask yourself, “Do I have integrity?”
You made an agreement, however bad that agreement may be, YOU made it. YOU agreed to the terms. You may have made that decision with people that make poor judgments, or with greedy people, or whatever, but YOU made an agreement. If you walk away, when you have the means to pay, you have no integrity. And if you are okay with that, please don’t justify YOUR decision by talking about how bad or dumb or mean or stupid the banks and lenders and mortgage brokers are, for YOU are worse than them.

DEADBEATS

If you have an auto accident and have a big claim for your insurance company – is it ok for them to walk away from their commitment (insurance policy)? Of course not! So why do we think this behavior is remotely acceptable? These are the same people that overextended themselves on a ‘gamble’ years ago while the rest of us practiced fiscal responsibility. What message do we send if we say ‘you can gamble and win, or you can gamble and it’s ok to skip out’..

Actually, it’s a really sad state that people ae even asking this question.

Smitty, you are a liar. You can get a conforming loan 2 years after a foreclosure. sometimes less.

& the last time the housing market took a loss (& it certainly wasn’t as bad as the 1 coming on now) it tool 9 years before the prices rebounded.

not 2-3.

myself, is it ok to walk away? absolutely not. when you signed for that loan you made a promise to pay it back.

some people have integrity. some do not. & we will all pay for the ones who do not, through higher taxes, rates, fees, and governemtn bailouts.

I’m happy with this ‘walking away’ mentality because it is the only thing that will keep lenders from creating this mess again. People wouldn’t walk away if they’d put 20% down and could actually afford the home they’re buying. Zero down, hybrid, negatively amortized caused this mess. The lenders should know they risk jingle mail if they continue.

Personal responsibility you people! How about it?? There are good markets and not so good markets. If you bought at the top, don’t blame your Realtor or lender. You knew what you were doing (but it’s so easy to play dumb now isn’t it… uh, my Realtor didn’t tell me to read my loan information…uh, my Realtor should have know that I couldn’t afford my payment…uh, I didn’t read in the papers that Stockton was the most overpriced market in America…uh, why should I be blamed for taking out an obligation that consumed my entire paycheck, even though they would give it to me!). You wanted to catch the gravy train on the way up…grrrrreeeed! The American way allows you to get rich or get poor. But the more times that someone (the rest of the taxpayers) have to bail you out, the less likely that the average middle class American will be given a loan in the future. Walking on your obligations makes it hard on everyone. Now, only those the rich enough for substantial down payments and perfect credit will get loans. (next you can blame them) You were given a subprime loan because you ARE subprime. And you will always be if you walk on your obligation! So, pay the piper! The market will turn in your favor. It always has. And if thats just too much to ask, well, enjoy your apartment.

PS — shame on you CNN Money for publishing such a stupid suggestion to a population that includes folks who don’t know how to manage their money/assets to begin with. I come to your site for great business/money articles – not this junk.

The more and faster people walk away the better. It will bring the correction on faster and then we can have a normal market. A market were people put money down, have income and intend to live in a home, I know I know it sounds totally crazy.

Why is all the burden of falling valuses placed on the mortgagee? The lenders are the ones that were raking in the big bucks the last five years (just look at quarterly reports)! Maybe a borrowers current mortgage balance and rate should be based on the current market not on what people had to finance last year! Who would lose in this scenario… why the lenders… and why shouldn’t they, aren’t they the ones who set the usery level rates which caused the collapse?

Are you absolutely kidding me? At what point does an owner…take OWNERSHIP for his/her decisions — i.e. the decision to buy a house he/she may not be able to afford to begin with. Grow up. Pay your bills you signed up for. Take responsibility. For those that have serious hardship (job loss, etc.) this does not apply, but there are far too many people reaping the unnecessary rewards.

There’s a real person on the other side of this transaction. Would you walk away from a loan to your friends, family or neighbor and leave them holding the bag?

Borrowers made a promise to pay these loans, and they need to honor their promises. To walk away is stealing.

If a borrower was duped- they have recourse-messy as it is- this is the most fair way to do it.

Next time-make sure you can afford it and understand the terms and risks of the transaction.

If it’s a choice between feeding your family and making a mortgage payment, of course walk away! It is NOT the end of the/your world.

This is irresponsible media, it is not ok to walk away from your liabilities. But even worse is to build a system that makes it easy to do so and then have the liberal media expose it. CNN, you should be ashamed of yourselves!

bailing on the loan is the same as stealing – unacceptable and should have consequences.

Those who walk out should never be given a mortgage again. It is never OK to walk away. Negotiate a deal with your lender, perhaps, but walking is the height of irresponsibility. This is especially true for “investment” properties — certainly anyone buying on speculation should know better.

I have several employees at my company and I can tell you from my standpoint that I would NEVER hire anyone that walked away from a house unless they lost their job, had a death in the family, or something else occured that changed their financial situation dramatically. I have no respect for anyone that walks away from their responsibility. It says a lot about character… it says a lot about their ethics. Be responsible for the mess you got yourself into and don’t make your mistake someone else’s problem. I hope all of you that walk away never get employed or get credit ever again. SHAME ON YOU!!

Nobody can force anyone to borrow money. Some people took money from banks and spent it, either for luxury vacations or for big houses that they never earned the money to pay for. When the banks failed to do due deligence to protect their own interest and loan money to these people, the banks become victims. I don’t understand why these borrowers who fail to pay back the money they owe are now called victims.

Don’t get me wrong. I understand sometimes people get into hardship because of unpredictable events, but there are also lots of people who want to spent the money they never earned.

Folks, we’re living in a new world order…record oil company profits…gas over $3/gallon…stock market down 300 pts one day, up 300 pts the next day…you should look out for #1, and do whatever it takes to ensure your survival…

I’m confused. In most states you can NOT simply walk away. That isn’t even an option. Oh sure you could physically, but you’re still responsible for the house. The lender will sell it at auction, and whatever is left owing on the house, the mortgage lender will chase you into bankruptcy court. They’re not just going to tell you okay we’re stuck with it now. In order for them to not legally pursue you and force you to pay, you would have to declare bankruptcy.

P.S. Our president set the standard for such boorish behavior by making it OKAY to lie in public…

I am a real estate agent that is dealing with this first hand and repersenting a financial institution in selling their foreclosure homes.

It is my opinion that people need to think of their homes as a place to live and not an ATM. If the value goes up then it goes up and if the value goes down it goes down. You need to be responsible for making your payment and don’t walk away just because of the value has gone down.

For the people that don’t have a choice because of financial situations beyond their control, they need to call thier banks and work out a payment plan with them. They don’t want these foreclosures so they now are willing to get something rather than foreclose. America needs to be responsible for their actions.

There is no more stated income loans out there any more and I’m lucky that being self employed that I took advantage of the oportunity to get this kind of loan when it was available. I need to hang on because I may never get that chance again.

Stop crying and SUCK IT UP!!!!!!

I work for a fortune 500 lender, yes we are still in business, and it’s amazing to me how many homeowners are all of the sudden “rate conscious”, and asking “the feds lowered the rates”, etc. Mind you, these are customers that have been in their loan less than a year on a 2 year fixed rate. “my rate is too high compared to what they are today”. Well, guess what: when you signed 1 year ago they were the same. Did you not read anything at closing? Oh wait: you refinanced and got cash out so you really didn’t care, but now you do because your money is all gone…? Gee, that makes sense. Oh, and when you went to closing and signed the 1003 application that had an overstated income, you initialed that page making your self liable for all information, yet you want to sue the lender or broker? you just verified that the income was correct? you lied too, so you should be punished for walking away. Did you think the value of your home was going up forever? your an adult so you need to get educated first. If you jumped in to a crazy i/o or option arm, and this is NOT your first time to finance a home, then the blame is on you, bottom line. Is it your home or an investment? Most people continue to pay on their homes, even if it’s in a depreciating market: why? because they are the smart ones with a fixed rate mortgage. Do you still pay $600 a month on your car payment that you owe $35k on and it’s worth $20k? yes, then what makes this different? Good luck, and i think it really sucks to the homeowners that made the right decisions the first time, and did it right.

Both lenders and borrowers are to blame. I agree to the “LET IT BURN” argument. I dont mind the idea of the cost of living in a house to go down. I own a house but I would rather see my kids get a chance to buy a house at REASONABLE price. The prices were rediculas. Punish the banks for being so lax. Maybe they wont make the loans as readily and our society will be less chained (enslaved) to their homes/banks. LET IT BURN!!

I would walk away in a heartbeat if I suddenly realized that I had been stupid enough to sign an ARM agreement with an unscrupulous bank. There are two parties in every loan transaction; each party is responsible to make sure the transaction is sound. When banks make loans to people who clearly don’t have the means to pay, it becomes difficult for me to see the borrowers as the criminal. David from Alaska needs to step outside his bubble and see how people who don’t drive $50,000 cars live from paycheck to paycheck.

I tried to stay until they foreclosed on my home of over 20 years. I never would have walked and tried everything to get my bank to work with me, but they knew they were going to get all of their money so they had no interest! I have no positive feelings for any financial institution at this point.

walk away, let the prices drop 50%, then but it back. git er dun

Shame on CNNMoney for suggesting that it is acceptable to walk away from a mortgage on a home that is under water. The borrower signed an obligation called a PROMISSORY note to repay the bank the money lent. The bank did not force the borrower to sign the obligation. When rates increased the bank also did not arbitrarily raise rates on borrowers. We Americans have a nasty tendancy to look to others to solve our problems and bail us out. If you make a poor choice, it is no one’s fault but your own. What is the message that is sent to our children when you walk away from a promise?

Here is the good news, if it wasn’t your principal residence you are on the hook for the deficiency balance, and the leder has the right to sue you and garnish your wages. Which will force most into bankruptcy. So in the future, everybody can see the skunk that you are. If it is your prime residence, and you can proove it, most states do not allow the lender to recover on deficiency balances on 1st mortgages, but god help you if its a second/3rd or home equity credit line (HECL). Then you too can go BK, and show the world how lazy,greedy and stupid you are.

If you trust your spouse you might consider a divorce today (on papaer)and remarrying in the future. You only need one good credit score going forward. Flip a coin.

If the walker falsified loan application info they should do a Martha Steward.

I took a $60,000 hit on the house I sold last December in Colorado. It’s no ones fault but my own. I signed on the dotted line and agreed to make payments NO MATTER WHAT THE MARKET DID!! Thats life!! People who borrow money to purchase houses should know the risk and shouldn’t be asking anyone for help, especially me, Joe Taxpayer, who bit the bullet on my Colorado house already. I was on a fixed loan, so my payments did not increase but I have no simpathy for those that took the “easy” money at first and are now having to “pay the price”. Can’t they read? If they are too stupid to read the contract and do the math, they shouldn’t be buying a house. I now live in Oregon where housing hasn’t been hit as hard (yet) as the rest of the country. I was able to purchase a nice house, agian with a fixed mortgage, and will live in it until I die. I’m sure by then it will be worth at least 3 time what I just paid for it. The market will rebound, hang in there and keep your committments.

I think this is a plain and simple mathematical calculation; you have to do what is in YOUR best financial interest and is legal. If walking away from the house minimizes your loss, it’s pretty clear that that is what you have to do. I see comments where people try to give it a moral spin, like being responsible, etc… It is not irresponsible or morally reprehensible to do what is best for you as long its a lawful act. Banks know they are taking a risk, which is why they charge interest on the loans. Government intervention through Fannie Mae and Freddie Mac shielded bank losses which made banks less risk averse, the tax payer will take a hit but that is our own fault for voting-in people that believe in government interventionism in what would otherwise be free markets.
God bless free market capitalism, where the best results are achieved when everyone is free to seek their own self-interest in a lawful manner.
Corporations are allowed to write-off their losses, why should individuals be denied this same freedom?

That’s where we have sunk to as a nation: borrow money, and when we cannot pay it back, walk away. The sub-prime borrowers became “victims” even though it’s their responsibility to understand the terms for what maybe the biggest purchase in their lives. You are actually encouraging this type of behavior. Great, with the lowered interest rate from an irresponsible Central Bank, this country is going on a downward spiral! We are so thrilled at claiming number 1, now we are number 1 in bad debts, number 1 in defaults, number 1 in bad maths education, number 1 in having no financial sense, number 1 in sub-prime borrowers… Are we proud yet?

This is exactly why the US continues to melt down in the eyes of the other members of the civilized world. When is it okay to walk away? Did you nit-wits write this article for an episode of Jay Walking?? Unless there are some seriously extenuating circumstances ITS NOT OKAY – especially when some greedy putz, who wanted to make a quick buck in Real Estate, wants to stop playing because he made a stupid bet. Of course the industry shares part of the blame but the other part belongs to the folks who wanted much more than they could afford and were going to cry if they didn’t get it when they wanted it. You just have to love the personal accountability of what seems to be a growing portion of the US population. I think I have the answer though – when you get tired of something or someone or it gets really hard to pay for the stuff you obviously deserve then simply do what they do in Hollywood – Just call it quits. After all, as Americans we should all get an un-ending supply of do-overs?!?! But if you decide to walk don’t stop when you hit the border.

California people appears to be the lowest of all Americans. Just like JBATZMARU, OC & CA said….. this reflect how stupid they all are… no one tell you to buy these houses and then to dump them…. you are the problems in this country… people who have no real self respect.

Wow. Maybe the question should be, When is it ok to take a loan you can’t possibly afford?. It’s too late to ask that now, I suppose.

Walking away is not the answer; we all will end up paying the price one way or another either with higher interest rate on all loans or higher taxes or both.

Did you think about where will you live when you walk away from your house? You will need a place to live. You don’t own a house and no one will loan you the money to buy a new house since your credit score will be 350. You will be Renting, when you Rent you are paying somebody else’s Mortgage and you will be building up equity for somebody else.

When you agreed to the loan terms, you know what you were doing,
All mortgages have a Promissory Note with a Truth in Lending Statement, and Loan Disclosure Statement, informing you the about terms of the loan. If you disagree with it then you should have not agree to the loan terms and not sign the paper. When you walk away from a Mortgage that should be consider fraud and you should go to jail.

This is like the old saying “you can have cake and eat it too”.

It starts at the very top, the Federal Reserve. They create a system of debt that filters down to every American. We are all brainwashed consumers who have no idea what’s really important in life. People here preach about spending less and saving. If we all did that, our economy would crumble. It’s built on debt and imaginary money.

Sure, people know what they are getting into when they get a mortgage, but so does the mortgage company. So when a person gets a mortgage they can’t afford, two entities made a mistake. Why should individuals be the only ones to pay for it?

I was an employee of a mortgage lender that lost my job with all of this mess. Everyone always blames “the brokers, the lenders, & the dumb borrowers.” Not many people realize that the reason all of the lending guidelines existed was because of investors on Wall Street. The investors had a HUGE appetite for these risky loans and wanted even RISKIER ones. The lender I worked for didn’t write our guidelines, the investors (Wall Street) did.

With that said, most of these risky loans had & still have their place. The problem is that they were over used. People should not walk away from their homes, because they are adults that agreed in writing to pay the debt. People should look at their income & debts before buying a home rather than waking up one day and buying the first house they look at.

The US Government is going to do what they can to bail everyone out to save Wall Street, when Wall Street got us in this mess.

What I would like to know is who is going to bail out the US Government?

Please, walk away. Walk to Mexico or Canada and do not return. Swim to Cuba. Stow away on a ship to the Far East. Please, just go.

The financial institutions are paying the price for their greed and stupdity.
Your neighbors will pay the price for your greed and stupidity.

So please, walk away….far far away.

In 1983 I paid $170k for a home in Houston, and paid extra every month to pay it off as early as possible. Many neighbors “walked” when the oil boom went bust, but we just kept making payments. When we transferred to Atlanta in 1996, we sold the home for $122k, nearly a $50k loss, BUT we only owed $56k due to ur financial discipline. We then paid $370k for a new home, and last summer (11 years later) we paid off our home. Of course, we have old cars (paid off) and don’t indulge in PDAs, iPods, BMWs or other “necessities” of the American Dreamers. But even if my house DOES drop 20%, I don’t care – ’cause I own it – not the bank. Wake up Americans! You CAN make it if you don’t eat out every night, lease new cars, buy junk you don’t need, and keep your focus. Walking out on a debt is not right, and one day it WILL catch up with you. Doing the RIGHT thing never goes out of style. Take a Dave Ramsey course and get your life in order! Living debt free is really liberating, and allows us to give so much more to people in REAL need. It is GREAT!

Whatever happened to personal responsibility? Trying to make a quick buck & it backfired on you,too bad. Make your money the old fashioned way, inherit it or earn it.

Only if it is your primary residence and you truly can not afford it. Let all the ‘flippers’ rot. Trying to make quick money.. get a real job.

Those who took these high priced temporary loans new darn well what they were getting into! Most should have never qualified to recieve such a loan in the first place. If everything turned out like they anticipated it would, then they would not be complaining, but they would celebrating. They made a committment and now they should step up to plate and uphold thier end of the bargain.
America should look at instituting the old system of work plan or prison term to work off their debts.

It was a stupid gamble that they took and now it is time to pay the consequences!

My husband and I got up everyday,went to work,budgeted,bought on sale,saved money,taught our kids the same.We are mid 50s,paid off mortgage 10 yrs ago,are now retired because we were responsible,not rich,RESPONSIBLE!!!! Our society needs to wake up,I worry about all the giveaways and walkaways and it’s time we responsible folks do something about it. NO BAILOUTS!!!

I don’t think it’s ok to walk away. But it wasn’t ok for the banks to be lending money to people who clearly couldn’t afford these homes in the first place.

I am no financial genius, but I easily saw this crisis coming. I purchased my house about 10 years ago and even back then, the loans that were offered to me were full of tricks and gimmicks and the banks and real estate agents kept pushing me hard to buy a more expensive house, telling me to only look at the monthly payment and not worry about anything else. I bought a modest house, even though I could afford a lot more. Evey year, I watched the value of houses shooting up and up and up, and I knew it could not last. Contractors were throwing up crappy houses and huge apartment complexes all around our city and I wondered who are all these hoses for? I kept getting offers to refinance or take out a second mortgage, again the loans were full of tricks and gimmicks that you’d have to be an idiot to fall for. All of my neighboors were refinancing and using their houses like ATM machines to buy all kinds of trinkets and other crap. I bought a house that was within my means and now it’s 100% paid off.

I have no sympathy for irresponsible people. What really sucks now is that I will have to pay for their bailout.

This is just another example of escaping personal accountability. Most of these people chose to live beyond their means or attempted to get rich quick in the real estate market without knowing what they were getting into. Most of these people made their bed, know they should have to lie in it. There are some exceptions such as job loss, etc. – especially here in the Detroit, MI area. However, most people I know who have lost their jobs but never lived beyond their means to begin with still have their homes.

I have a ARM note on an investment and have tried to get the mortgage company to roll it over to a fixed interest so the payment doesn’t exceed my income. I had planned to refinance, but the market dropped out. They are holding on to old policies that will force me to let it go back. I don’t want to.

I lost my house back in 1991 during a bankruptcy. I couldn’t get the mortgage company to work with me – that is, until I filed bankruptcy. By that time I’d had a nervous breakdown and couldn’t cope anymore, so I walked away and let them foreclose on it.
You’d think they’d rather work something out with people than take such a huge loss and risk going under, but I found out – wealthy mortgage companies aren’t smart enough to find another way. Their just there to get the money and run.

companies don’t hesitate a minute to walk away from bad investments. Let ‘em hold the pig. Next time they will be less greedy and more particular with depositers money

i personally think bank should make payment arrangemnets according to buyers financial situation rather then foreclosing,for e.g if a family bought the house at peak&paying the mortgage of $3000 where there income is not more then $4000, i feel bank should make plan with each indiviual according to there financial situation, as in this case family will be more comfartable in paying $2000 mortgage,rather then 3000&by doing this they either increase the term of loan & or by giving this plan for next few years untill mkt comes back(4-5 years)another option bank can give is to make special mortgage prog. for owners with financial problems, by refinancing @lowest possibble price for 5 years
i suggest trouble owners should not walk away,as it effects the mkt&further create trouble in society by abandoning the house

If it is OK to walk away from your responsibilities, how about if we break knees of everyone in your family?
You made a commitment you will pay or run where no one can find you.

By the way can I get money back from the stock market which just went down? They told me it will go up.
Get really, – you sign – you will pay!

You never give up on your dreams, unless the fight is over, a quote from Rocky Balboa, “But it ain’t about how hard you hit… it’s about how hard you can get hit, and keep moving forward…how much you can take, and keep moving forward. If you know what you’re worth, go out and get what you’re worth. But you gotta be willing to take the hit.”

The banks drove up the prices and made it easy for people to borrow more than they could afford. They made a ton of money and created this situation doing it. This is just their chickens coming home to roost. Of COURSE it’s OK to walk.

2 Million ARM type mortgages will reset in 2008 alone. ARM type mtgs. will reset all the way into 2010. This will take many years for this to settle down. Be prepared for wave after wave of much more foreclosures.

The gov’t. knew we were headed into a DEPRESSION after the 2000 tech crash and the 9/11 event. They purposely lowered interest rates to cause the housing boom which in turn made all other businesses boom. This was only a forestalling of the inevitable…where we’re at now.

There are no more ace cards left to play by the gov’t. We will soon see many impoverished people coming online from the huge amount of debt individuals have and can’t repay. They will be made into land serfs, literal slaves to the Chinese and Saudis who have loaned us money to stay afloat in the near future.

Really bad times are coming!

This stuff about people being taken advantage of by mortgage companies is bull. If you are too stupid to read and understand your contract, don’t sign it. Either get legal help to understand what you are signing or don’t sign it.

Society is going down hill to allow this with a wink and a nod. Buying houses and having babies you cannot afford just shows everybody how dumb you are – not how much of a victim you are. Grow up.

The situation many people find themselves in in for the most part their own doing and they should be made to pay for their mistakes. Did people know or should have they expected house prices to fall and interest rates rise .. of course they should have, but money was cheap. I strongly object to the the Fed taking the measures that they are currently with lowering interest rates .. what make money cheaper to obtain! Have we not learnt anything? The economy and the housing market are due for a big correction and people should be held accountable for their own choices ’cause at the end of the day it is individuals choices that have got themselves into trouble.

What kind of topic is this? Why limit it to just skipping payments on your mortgage? Why pay for anything? Gas is going up. Drive off without paying for it. Food is going up. Skip the checkout line in the grocery store. And who suffers? The idiots like myself who actually think they’re responsible for their debts. Puh-leeze.

First and foremost, the real problem is the overvalued properties. WE the consumers caused this mess (why are we willing to pay 600K for a house that we know is worth 200K?).

I mean, don’t cry and be accountable. In one hand, I am a renter because I am aware that I cannot afford buying the overvalued prices in the DC area. In the other hand, is not wise to pay above the real value for a good/service/asset. It is YOUR responsibility to crunch the numbers and make sure that the trade-offs are there (i.e. Is this house worth 600K?, I think this ARM is dangerous I must go for a fixed rate loan instead, What if I am not going to be able to refinance my ARM?, etc.)

The goverment MUST NOT INTERFERE with free market, PERIOD!!! Is very dissapointing to see the Feds lowering rates to save Wall Street and on top of that bailing people out with tax payers’ money and hurting the overall long term economy.

This is a NEEDED and UNAVOIDABLE correction, it will cause some pain now but is better than “creative and morally questionable patches” that will have the overall economy agonizing for years. To all politicians and political appointees: do the right thing and don’t think on your personal political gain!!!

I don’t know if walking away is that easy because average Joe never wins against Wall Street. You think you’re going to be able to buy a house in 2-5 years from now. THINK AGAIN

shame on cnn, to even plant this seed, IF YOU OWE YOU SHOULD PAY!!!!!!!!!!!!!!!, IM FINDING ANOTHER NEWS SOURCE,OTHER THAN CNN!!!!!!!!!!!!!!!

It is NOT ok to just walk away. All of their neighbors will suffer as a result of their irresponsibility. Additional houses will flood the market beyond those already being foreclosed on and drive down prices even further. And, just as we are talking about lower home prices as a cause here, even more people will panic causing a snowball effect. Rational or not, but probably not, it could create a full fledged housing panic.

If they can afford a fixed payment, they should refinance at still low rates. If they cannot afford a fixed payment, they should set up a short sale and work out the “with” or “without” recourse on the difference with their lender. At least their house would be sold quickly and removed from the market.

The homeowners have just as much responsibility in this as the lenders. Regardless or moral or immoral activity of the lender, they should review and research every contract they sign. Not reading it because it is long is not an excuse. Not reading it because you don’t understand it means you SHOULD NOT be signing it in the first place. There has to be self-responsibility and accountability otherwise people won’t learn from their mistakes and may even learn to abuse or take advantage of situations.

You have got to be kidding me… I am appauled that CNN would even advocate something like this. Plenty of people have already stated the obvious reasons this is just wrong, so I won’t rant; but, people have to take responsibility for their actions, and accept consequences. Otherwise, we might as well be living in a lawless society.

I am frustrated and disturbed at the fact that the blame has largely been placed on Wall Street, Banks and Mortgage Brokers for creating the mortgage mess that a relatively small percentage of homeowner’s are in. The consumer is not without responsibilty here. Although, it is not surprising that the people that couldn’t prove their income, couldn’t put money down and had a history of missing payments in other areas of their credit lives would condone walking away from this responsibility. Wake up people! Yes, the banks got greedy expanding the base of people it would lend to given the rising property values. But that doesn’t take away the borrower’s responsibility to pay it back. Just because someone offers you credit to buy something doesn’t mean you should buy it. Consumer responsibility would have prevented this. Not governmental regulation. Fortunately banks have learned their lesson and it will be a very long time before the credit standards are lowered and trust is given back to these bad credit borrowers.

people will move to their highest consequence.

i feel for those who thought they ‘deserved’ (didn’t our gov’t promote this too?) to own a house despite their financial statistics, and took the bait from the greedy folks listed above. but come on – you signed the contract, live with it. what’s happened to responsibility in this country?

flippers or ‘investors’ should be jailed if they walk on the mortgage imo.

flippers, mortgage brokers, real estate agents buying houses (more than 1M licensed realtors in CA last year!), and financial institutions (bundle, divide and sell those bonds!) have destroyed the housing market. one used to buy a house to live in it… what a concept. affordability is a thing of the past thanks to the greed in the system.

the house as a piggy bank with every ‘transaction’ increasing in value and lining the pockets of those in the greed chain… thanks alan greenspan. great idea – what a stupid way to build national prosperity.

When a person gives a mortgage to a bank…they sign a promissory note. Essentially they promise to pay their obligation….no matter what. The promise or contract is not provided with any clauses that state….”you only have to pay as long as your home appreciates in value”…or “you only have to pay as long as the interest rate does not adjust up”. Sad part is all of America is going to pay for this. Our dollar is weakening against other currencies because we are a debtor nation that has become financially irresponsible. Our grandchildren and great-grandchildren are going to pay the price for this “walking away” mentality when they are enslaved to the global market. America will soon be the source of China’s cheap labor if this mentality persists. Those out there that irresponsbly “bit off more than they could chew”…suck it up! Gut it out and do what is right….pay your obligations! Period.

Yes it is absolutely OK to walk away and it is perfectly LEGAL as well, it says so in the mortgage contract. In the contract, it says you agree to pay the monthly payment OR ELSE the bank will take posession of the home.

Let’s look at the big picture for just a moment. What is more important to YOUR family? Will you ruin your family and lose $100k+ by “sticking it out” and paying the mortgage every month or would you rather just walk away and rent something affordable and start over again?

Hmmm let me think, put kids through college or make interest payments to the bank. Is there really a choice here?

IF YOU WALK AWAY AND DO NOT DECLARE BANKRUPCY WOULDNOT YOU BE RESPONSIBLE FOR THE DIFFERENCE BETWEEN THE DEFAULT AMOUNT AND THE DISPOSAL PRICE OF THE PROPERTY.I GUESS THEY EXPECT THE FINANCIAL COMPANIES TO JUST FORGET ABOUT IT.

Walk away! Wow what a great lesson for your children. You signed an agreement – stay with it. Cut out other things, sell things that have value, get a part time job. Keep with YOUR WORD!! And don’t buy something in the future that you can not afford in the first place.

Just “walk away”–kind of like what the government does to the citizens?? That is a grand idea…and very reponsible.

Walking away from the mortgage is nothing immoral, just business between borrower and lender. If lenders are stupid to let the borrower borrow without real downpayment, the lenders should carry the loss when house prices fall and borrowers with negative equity walk – a lender fool and his money are soon parted. – I hope that more people will walk, more REOs will bring prices down to non-bubble levels again and we will be able to buy, with a real downpayment, of course.

I say the time has come to equally distribute wealth in this country! People work hard and can not afford a roof over their heads. The banks and mortgage companies have taken advantage of the weakest in our country. I say give these victims these homes outright and sign the deed over to them. This will teach these rich *&^%*@! learn a lesson they will never forget so they will never try to take advantage of theses poor people again. So don’t make them leave but instead let them stay a means of restitution.

Didn’t anyone read:
http://money.cnn.com/2005/10/21/news/newsmakers/barrack/

And wasn’t it around that same time that the Feds changed the bankruptcy laws?

Don’t tell me the writing wasn’t on the wall.

What’s the best defense? Blame the banks. I didn’t hear anyone complain when they were able to put nothing down on a mortgage and watch their little investment appreciate through the roof, then walk away with a considerable McFortune.

Oh, and wasn’t there a show called ‘Flip This House’ on HGTV? Just to let you in on a little secret.. once you let out a secret it isn’t a secret anymore. Sure enough, everyone thought they could make a quick killing. Sure reminds me of the Internet bust.

For those of you who thought you were cashing in and are stuck – I have absolutely no pity. I hope you’re screwed with bad credit until my mortgage is paid off (you have quite a few years).

I think I’ll head down to Atlantic city with my kid’s college fund and if I blow it, I’ll have them on Tuition Aid.

Very interesting! David should go to jail. He was a speculator who tried to use the system and lost, that’s life. People that walk away from debt should never be allowed to borrow again, ever!
America has become a country of no-fault everything and let the government take care of it. And by the way, rich people are bad and big companies dishonest. Give me a break.

If CEOs of large corporations are allowed to ‘walk away’ with large ’severance’ pays (e.g. Countrywide CEO), after putting the company in the toilet, why not homeowners?

Of course, the CEOs will ‘retire’ in a private, sunny island, whereas homeowners will have to dig their way to a decent existence, once they walk away.

The subprime mess is a perfect example of how our regulators were watching the store. Private mortgage lenders lined their pockets, and capitalized on unsuspecting applicants. Many appraisals were grossly inflated and never questioned. Responsible parties must be held accountable to prevent these problems in the future. This is only the first wave! Auto and credit card delinquiencies are on the horizion.

IT IS NEVER O.K. TO WALK AWAY. THESE BUYERS SHOULD PAY A BIG PENALTY. IT PUT NOTHING DOWN; HE HAD NOTHING AT STAKE. SO, HE SHOULD PAY. HE GAMBLED AND HE LOST. HE NEEDS A CONSEQUENCE. THE BANK, NO, THE TAXPAYER IS LEFT HOLDING THIS GAMBLERS LOSS. BANKS’ SHOULD NEVER HAVE BEEN ALLOWED TO MAKE SUCH LOANS. THE REGULATORY AGENCIES NEED AN OVERHAUL AS DO THE BANKS, AND WITHOUT GOLDEN PARACHUTES FOR EXECUTIVES……..

Sure it is OK, I would do it if I was in that situation. Banks took risk let them take the hit. Big boys need to loose some money sometimes HAHA.

Mortgages are a contract. Beople that default should be sued by the mortgage company for every asset they have, including their cars, boats, cell phones, and clothes on their back. The banks and taxpayers soud not have to suffer for someone buying a house they cannot afford then walking away. The liberals will probably bail the defaulters out using taxpayer money in return for a vote in November. That way I can not only pay for my own house (that I can afford) but the defaulters house also. This is not fair to people that try to live in a monitarily responsible manner.

If Enron executives can just walk away and devastate the average man. The average man should be able to walk away and devastate the investors. And by the way people forget it was the investors who made the rules and qualifying guidelines that allowed this situation to unfold. So why are they crying foul now?!!!!

Hello,

To “walk away” when you can afford the payments just because the value dropped is very short-sighted. The market will eventually come back. The number of people in this country continues to rise and all of them will need a place to live, period. Unfortunately it may take awhile.

I agree that many people who can not afford their payments got themselves into trouble by taking out interest only loans. These people probably do not deserve any type of help what-so-ever. The problem is that their mistakes are hurting responsible people who need to sell their home (job loss, relocation, etc).

I believe walking away from a loan is a “bad” thing. However, it is a far worse thing to let your family starve. For some the only sensible thing would be to walk away, rent an apartment, and once again be able to feed their families. Hopefully though, these people, who used their homes as a cash machine, don’t get to keep their fancy cars, boats, etc.

It is NEVER OK to walk away and not be severely punished. This is not only the problem with mortgages, but with society in general. If this same person who bought that home made $100,000 in profit from it, they wouldn’t be donating it back to the banks would they? This would now make it socially acceptable to file forclosure and give anyone who made a bad investment decision the right to just stick the loss with somebody else because they are too irresponsible to see it through. We have seen these up and down markets before and they have consistently rebounded over time. Suck it up, keep the property and PAY YOUR DEBT !

Buying cars and homes will be much harder for the next generations because of idiots like these people trying to make a quick score.

I believe that we should tighten up the forclosure laws and prohibit anyone who files from buying property for a minimum of 5 years and then make them take a course of how to borrow responsibily. Also, make each mortgage broker become licensed in the “profession” of lending money.

This whole mess has happened because our federal government has failed us.

The entire industry needs to be regulated from top to bottom. No more speculation in single family homes. If you are not living in it, then you are not buying it. No more low down payments…if you can’t save enough for a down payment then you can’t buy it.

The answers seem simple to me but our society has condoned a system heralding greed, and our standard of living has suffered because of it.

Everybody who bought real estate with no money down and hoped to resell it top make a quick buck should be sent to prison for crimes against their fellow citizens.

It is absolutely not ok to walk away! These buyers bought their homes just like the rest of us – knowing that with any investment, there is risk. People should have thought about the possible risks before taking a no money down, interest only loan. That was not a sure thing. Wake up and take some responsibility! Get a second job, cancel the cable, stay at home to eat. Be a responsible contributing citizen and pay for your debt. I got a mortgage I could afford. I did not buy beyond my means and as a result, I am not walking away from my loan. Sure, my property value is down a bit just like everyone else. But I am sure in time, it will be fine – just like every cylce in the past. Walking away is an irresponsible thing to do. Just like taking a too good to be true loan was in the first place.

To CNN:
The problem is not the homeowner, but the lender who allowed the heavily discounted interest rate on the mortgage in the first place.
In Canada, in order to purchase a home, the lender has to do his due diligence in ascertaining the homeowner’s ability to repay the interest and principal on the home. If the tests fail then the mortgage would not be approved and the situation of a borrower walking away from a property is quite minimal.
Rob Pellatt
West Vancouver, BC Canada

My mother has decided to walk away from her place. She owned it for more than 20 years, but was suckered into an adjustable rate refi by some mortgage crooks. (She swears they told her that it was a fixed rate, but I was not there.) Anybody who can pull the wool over my mother’s eyes is a pretty good con man, but they still managed to sucker her. No, she didn’t get the money to blow – she put the money back into the house in the form of replacing the roof and a full remodel. However, the “appraiser” that worked for the refi company did a drive by appraisal and said the place was worth more than it really is, so artificial equity was tapped to create the mortgage that she was sold. The number of time’s I’ve seen her crying over the loss of her house is depressing, but I think she is doing the right thing by making them deal with it.

I feel no sypmathy for the companies making money off of old ladies this way. To all the people who think that walking away is stealing, explain to me what these brokers are doing to people who don’t understand all the terms? Explain to my mother that she is “stealing” when she would do anything in her power to keep the place she has lived in for more than 20 years? I only hope that this little recession turns into a depression and this financial mess you have created by taking advantage of the ignorant comes back to hit you in the wallet.

While it is not ok to just walk away from responsibility I don’t think it is ok of a lender to be able to drop rates so low initally that some young couple or person is able to get into a loan they will not be able to afford later. I believe that interest rates that change with the economy is a bad idea for eveyone involved. The lenders I am sure disagree but think about it if you are a lender would you rather recieve money from a fixed rate for 30 years or money from a variable rate for 5yrs with the chance the loan will go to default & you will be stuck with no only lost money on a loan but a vacant home. It is a tough situation all the way around & I see it as though both parties need to be more responsible when it comes to lending & borrowing.

“No Pain, No Gain”
Walking is a healthy choice to get rid of the extra fat around the belly and the debt around your neck. It’s ok to walk away now just “Keeping up with the Joneses”.
Greedy borrowers (including the ones lacking common sense) and the always deceitful, blood sucking, greedy Banks/ Lenders should be allowed to feel the full consequences of their actions without the interference of the government using our money or squandering our future (NO BAILOUT).

We use to be known by the corrupt government (corporations, banks) as the people, the public, and the constituents now as I am sure most people hear often we have been reduced to being referred to only as “The Consumer”.

Definition of Consume:
1. to destroy or expend by use; use up.
2. to eat or drink up; devour.
3. to destroy, as by decomposition or burning: Fire consumed the forest.
4. to spend (money, time, etc.) wastefully.
5. to absorb; engross: consumed with curiosity.
6. to undergo destruction; waste away.
7. to use or use up consumer goods.

It is not OK to walk away. Speculators are responsible to throwing the market out of whack. They need to be held responsible and shld pay. Because of them, responsible buyers are suffering.
Credit record shld carry it for at least 5 years.

What an irresponsible suggestion, encouraging this won’t just ensure a recession, it could lead to something far worse, potentially another depression. We have all been told that this couldn’t happen because of the FDIC and legislation that is in place requiring financial institutions to maintain reserve percentages, but we have a lot of mortgage brokers out there who aren’t covered by FDIC or any other insurance package and the investors who have given them money are equally uninsured as are any banks who have invested funds there. Massive walking away from homes could well cause economic chaos.

Everybody should read the comment posted by “JOE from NEW HAMPSHIRE. (posted @ 4:03 on 2/6) ” Vultures like this guy are the reason well-intentioned, Average Joes have been manipulated by predatory lenders of the past few years.

Regarding all your wonderful properties and fast-growing fortune, Joe, can I interest you in my home for sale in Philly? My ROTTWEILER is VERY FRIENDLY to prospective buyers…..

What a crazy thing to do. You have to live somewhere. You might as well live in the home that you thought well enough to buy. Eventually the value will catch up the the debt amount. What have you lost? Nothing. Walking away because of a “perceived loss in value” is ridiculous.

Please do walk away from your house, then I can pick it up at a major discount when the bank needs to dump it.

Do not blame the lender, you are the person that purchased 300% more than your income could support. Are you honestly stupid enough to think that interest rates would stay that low for 30 years? Give me a break!

FYI you can qualify for an FHA loan after a chapter 7 bankruptcy has been discharged 2-3 years. The same time period applies to a foreclosure, but its from the time the property transfers to the new owner.

For instance the property goes to sherrifs sale, the lending institution buys it back, clears the title and then lists the property for sale.

This generally takes 3-6 months from the sale. property sells in 3-6 months to a buyer you wait 2-3 years from that date.

foreclosures typically dont even start until you are 120-180 days behind. then can take 6-12 months to get to the sherrifs sale. bottom line it’s easier to bounce back from a chapter 7 than an foreclosure, one would assume cnn money could pick up a phone and call a reputable lender and get this information.

No, it is not OK to walk away. Speculators need to be made responsible for their actions. And that includes the financial institutions that lend money to undeserving candidates.

I don’t think that those who walk away understand the full impact that it has on the economy, their retirement, family etc…. If this continues to spiral as it is..this will have an impact on your retirment or perhaps your parents retirement today.. have you noticed the decline on the DOW? If your 30 and walking away from this home and your parents paid for theirs and are ready to retire, but now cant because the market is plummeting because of this turmoil… shame on you because you just contibuted to the market enviroment! Your parents worked way to hard to put up with this… put some perspective in your choices before they are made!

walk away!! This is all the fault of the Fed and it’s Member Banks and their loose money practices that jacked prices up. If you can walk without getting burned then walk fast…and for you that think it’s irresponsible because it makes YOUR home worth less then tough. You didn’t buy your home for altruistic reasons either.

Yes, walk away, Big business and Wall St does it all of the time. The Govt does it with unfinished projects that waste tax payers dollars.

Everybody should read the post from “JOE from NEW HAMPSHIRE” posted at 4:03 on 2/6. Vultures like this guy are the reason good-hearted, well-intentioned, Average-Joes have been manipulated by predatory sales people.

Regarding all your wonderful properties, why don’t you come and take a look at my house for sale here in Philly? My ROTTWEILER is VERY FRIENDLY to potential buyers….

The subprime mess is a perfect example of how are regulators were watching the store. Private mortgage lenders lined their pockets at the cost of unsuspecting subprime borrowers. Inflated apprasials were never questioned. New laws must be inacted now to prevent this problem in the future.It was only a matter of time! This is only the first wave, auto and credit card delinqueicies are the next wave!

I feel it’s okay to walk away in certain circumstances.. well mine is one.

Purchased my home on a ARM.. not a low interest starter either. Iwas told that was all I could get. Bought because wanted to start a family soon and were making pretty good money, plus saw we were quickly getting priced out of where I grew up (Long Island). So , I purchased my house thinking that in 2 years in addition to the money I put down AND hte improvements I’d make (cause it was a mess) in my starter neighborhood (Levitt house) I could get my score up. While I didn’t really think prices would continue up as they have, never IMAGINED it would.. well plummit so much. Figured that with the added equity AND an improved credit score I could refinance into a fixed mortgage (my mortgage guy told me to get my scor up and I’d qualify). Come August I had done just that.. my score was pretty good, not fabulous, but good enough to get a fixed ..or so we thought. The market then changed it’s tune and started requiring even higher scores for my particular situation. On top of that I lost equity in my home month over month. Moer and more homes starte popping up (there are over 220 homes in levittown for sale). So, I was trapped. in addition in that two years we did have a child and so I wasn’t able to contribute as much to the income so it went down.. most of our reserves were both in the house. I knew I was in trouble then and begain to call my mortgage company back in September and have still nto gotten anywhere. I was askng if I could get the rate fixed or frozen for awhile or something.. but nothing. Not even the subprime freeze did it for me, as I am NOT subprime, but ALT A. Now, with the increase oil prices, etc. we are 60 days behind on our mortgage (Dec with the older payment.. jan is now at $800 more! eek). (Dec & Nov are ALWAYS slower months for us and we had a big hiccup). I could hang on and hold in if the mortgage company would work with me on fixing the mortgage (I will have Dec paid by the end of the week.. but jan will be short as the $800 increase is impossible)
The stress is terrible and I’m in shambles… I thought I was doing the wrong thing.. I guess it wasn’t. Now, I have a few things I’m trying to figure out. If I can’t make more money I will have no choice but to try and sell my house. If I do sell, it will be a short sale. I can guarantee you that if we do decide to sell we will no longer pay the mortgae while it’s starting to sell. and the proccess will begin for foreclosure. If I am eable to sell it it will be better than a foreclosure and not paying during the proccess will give me time to save some money so that I can MOVE out of Long Island all together (Cost of living is just too insane). And if I can’t sell I will try to turn it over to the bank or let it foreclose and live it in for free until they kick me out.. the proccess is logn here and I will manage to save a lot of money in that time..a s my mortaage is a heavy one.
Don’t neccesarily WANT to do that.. but I have no choice I think. We are trying to hold on.. and if they DO work with us we WILL be able too.. but now it’s in the banks hands.. I do believe they are being greedy stubborn pigs if they insist on foreclosing when I’ve been paying a 6.95% interest rate for hte past 2 years (no Im’ sorry 3 years).
There comes a point when you have to just give up i guess!

If I get a chance to sell my townhome for the same price I bought 4 yrs ago, I will sell and move to an apartment or go for rent in the same place. Mortgage is a total ripp off, banks are atrocious, very cool for writing off in Billions but when it comes to mortgage they chase you till the last dime!

No, it is not OK to walk away. Speculators need to be made responsible for their actions. And that includes the financial institutions that lend money to undeserving candidates.

Guys fight it out and show you are a true American in every sense.Do we walk away when we are loosing a game or do we fight it out.

Drop off other expenses and beleive me its very traumatic to go through a foreclosure and no to forget what it does to your credit ratings.

The banks are the thieves here. This country was built on GREED not morals.So you do what you have to.The one on here that said people are thieves for walking away has no clue. It`s easy to judge others.All I know is that this is very bad and I fell so sad for the ones loosing there homes. I know just how it feels for I have been there.So I do know what I`m talking about. Not like some of these bone heads on here that know nothing.

The moment one buys something using someone elses money they are agreeing to a commitment of repayment based on social morals. It is these morals that this artical is not upholding. This change will come and lead to a severe change historically of the currency system in the world (Just look at the US deficit). Long ago you had to barter with a possession someone else wanted from you for a possession you wanted from that person. This means you had to have it, nowadays you need have nothing to obtain that same possession based on using someone elses money (Money – A globally accepted item of worth backed nowadays by demand, not precious metals) The WHOLE moral of my blabbing is if you DONT have the money DONT buy it. What does this mean for large purchases? Work till you can afford it. Think of this way, everyone “needs” things they cannot afford so economy continues to provide these “things” through manufacturing and employment of the same people who “needs” these things they cannot afford. SO what happens, they peoples credit is destroyed AND they lose there jobs because no one is no longer buying products they work to make. A vicious circle that NEEDS a hard reset.

I mirror Smitty from VA. I too, am a mortgage lender, and have experienced many many folks that want more house than they can afford, yet, anti-discrimination laws say I have to give them a loan if they qualify. Integrity has been on it’s way out for a long time in this country. It is so refreshing to hear from many of you that you appreciate what you have, you earn what you have, and you recognize that there are consequences to everything – good and bad.

I agree with the guy at the top of the page who bought the 270K house in 2005. It is mostly the banks and lenders fault for house values going in the red. I too own a home. I closed in 06. I qualified for 250 but choose to keep it real an purchace at 190K. Since I travel alot I decided to sell but like him I cannot even get payoff and that is 164K on a 2400sf home, 20k in upgrades, sprinkler, custom entire paint job. My best offer has been 150K. Please. The bad part is people are not even being moral and willing to pay you what your house is worth, they too want a bargain so in 3 years they can brag about what a great deal they made. People have become just as greedy and immoral to get a deal of the century as the banks were with their fancy loan modules. I cannot even sell and break even because of this mess. So I feel like him, why should I suffer because all this bull crap. Countrywide bought my loan over a year ago and they are a big part of the problem. I called them and asked them to take less so I could simply sell but they have not gotten back with me yet. People, know your credit and situation before proceeding and banks and lenders, stop the greed, trying to make yourself rich and when you bust asking for help. I dont see you sharing profits with me in your good years….What ever…..

A lot of us I’m sure would like to walk away from a lot of our dept- but because some of us are responsible citizens-we pay. Why should the rest of us have to pay when others(like investors)took on risky loans. And shame on the banks for giving anyone a loan who had a pulse. The people who got us all into this mess should have to pay !!!!!

Is walking away OK? NO WAY! Enough said.

This sad sector of the citizenship has values that have gone down the tubes, so far down down down, that they just don’t care who else they take with them.

Depending upon the circumstances, yes!
Not all but a majority of mortgage companies and lenders provided loans to at risk consumers, regardless of the financial credibility of the individual(s). Lenders simply took advantage of the situation and in some cases charged outrageous interest rates and used very creative methods to finance homes for people who simply would not otherwise be able to qualify for a loan. Against my advice, my son feel victim to one of these mortage companies and I sincerely hope that all involved with this scam pay a high price for their actions.

People are too accustomed to living in luxury. Six months ago, I made a poorly-timed moved and am now paying the mortgage, taxes, and upkeep on my old, unsold house in addition to my new apartment. We decided that we can make do on one movie rental a week, one restaurant dinner a week, and both kids sleeping in the same room instead of having their own bedrooms. And guess what! We’re getting by. If you have a boat, two new cars, go on four vacations a year, have a 40″ plasma-screen TV, and you can’t make your house payment, you won’t get any sympathy from me. Grow up and pay your bills like an adult.

I am tired of those who feel it is ok to walk away from an obligation that they took and promised to pay back to the finance company. If you buy a car and drive it off the lot it goes down in value. Do you stop paying and walk away from that? How about investing into the market? If you purchased stock and it went down in value, are you going to demand a refund? There is risk in investing your money in almost everything. Suck it up people. You have no special privlidge to NOT live up to your obligations! You do NOT get a “free pass” in life. You have received the same tax benefits as everyone else and now you want people who are willing to work through this to take on your mess too? You should not only have to have this stay on your credit for a minimum of 10 years, but you should now owe the IRS with stiff penalties the tax benefits you’ve claimed while you’ve own your home. The goverment should not be bailing you out while the homeless now will get less because of your laziness to “pay as agreed”!
The housing sector will come back and values will eventually start to gain again. This is how it works.
How it doesn’t work is people walking away because they don’t want to pay anymore because the value has gone down.
Well I don’t want to pay for your mistakes. I don’t want higher taxes, higher insurance and you getting away with it!

Jingle mail originated in the 1980’s. What people who walk away so easily don’t understand is that everyone’s property value is affected. This article is irresponsible and if people are walking away, I hope it’s in the author’s neighborhood. If you walk away you will be affected alot longer than 2 years. Take responsibility for your actions.

Of course you should walk away from your mortgage.
The IRS isn’t going to go after you because of your ill gotten gains. The lending industry will continue to loan you money for cars and credit cards. It will be years before it makes sense to buy a house again and by then your credit score will recover. Your neighbors and friends don’t care if you’re a “casualty of the housing disaster”, because they probably are too.
The government/IRS, the lending industry, and your friends are all telling you it’s ok to walk. Get your life back by dumping that toxic loan. Sleep well at night knowing that your Bush/Greenspan “American nightmare” is finally over.

I cannot believe what I am seeing. When people were buying homes and flipping them because the value increased so quickly everything was perfect…but as soon as things go the other way WATCH OUT….responsibility and ownership of your actions suddenly becomes a mute point.

All of the interest only loans were in essence like gambling or playing the stock market…sometimes you win and sometimes you lose. But when you lose nobody says oh poor you and gives you your money back! Come on people take some responsibility. Fixed rates were so good during that buying period that it seems to me people were consumed by greed and keeping up with the Jones instead of looking at what they could realistically afford. We couldn’t afford to build a house at that time because it wasn’t in our budget and now we finally can afford it and we locked in at a 30 year fixed because the rates are still great and it is obvious that they will go back up.

Buying a home is a huge debt and responsibility and I just don’t think walking away is at all acceptable.

@ Riye, Germantown, MD
RE: I bought my condo in 2005 for 270K$ with 20% down. It has been the market for 8 months now and I am not getting offers even for 210k$ simply because of the tougher lending standards.

But you CAN BE BLAMED for buying an overpriced condo. I could have bought in Arlington at $400,000 for a condo, but I DIDN’T. Why? Because I knew they were overvalued and inflated.

It has nothing to do with being a speculative investment, you just made a bad financial move into paying for something extremely over-valued. I mean come on, Germantown? Did you really really think that a condo would hold value out there? Even in Arlington, Condos in 2001 were $150K for a new one. At the high they were $400K and now are down to the low $300K’s now and still dropping like a rock. No one forced you to buy that condo. And since you CAN make your monthly payments, you won’t be able to walk away. You made a bad move, and you will, like many others, have to sleep in your bed that you made.

No, it’s not okay to walk away. There comes a point where people need to take responsibility for their actions. The predatory lenders should work with individuals who are having problems making their payments, but I don’t like the attitude that just because home values are down, it fine to stick the bank with the balance.

If they can afford to, they should be required by law to keep or sell it, with stiff penalties (matbe even criminal) for walking away. A contract is a contract and it is time people took responsibilites for their actions. If keeping up payments on their home means driving a Kia instead of a Lexus, so be it. They should have thought twice before buying that house. But now it is theirs for better or for worse, and no one should have to bail them out.
What if the owners(employers) of large private businesses decided to just walk away, shut their doors and lay off thousands of employess, just because….

I’m sorry, but walk away…what kind of trash are you. You made a deal and now you don’t want the deal. This laziness and stupidity is bringing they rest of the country that has any investment tied to financials–and it is your fault and no one else’… and as for all the loan originators that signed anybody and everybody up without a down payment… I hope you burn in hell with the fools that could never afford the flip or home that they got themselves into.

Every right implies a responsibility; Every opportunity, an obligation, Every possession, a duty.
-John D. Rockefeller

I’m an avid CNN Money fan, but your article promoting the ‘upside’ of walking away from mortgage obligations is similar to the unscrupulous mortgage brokers and lenders who helped create the situation. It’s bad enough that we’ve allowed ourselves to view our homes as nothing more than an investment, but now we’re actually encouraging America to default on their financial commitments, and let someone else worry about, or pay for, the inevitable financial mess that will follow!

Walking away from a mortgage sure sounds like stealing to me. Implying that it’s OK because your credit profile will only take a hit for two years is completely ridiculous. People who decide not to pay for something that they borrowed money for should be thrown in jail just like any other thief.

When is it okay to walk away? Never. You signed an agreement to pay for your home. If you walk away, others suffer, with empty homes in the neighborhood and home prices taking further dives. You don’t have the right to cause these woes for others. If you were stupid enough to sign up for a sub-prime ARM at a time when homes in your area were overvalued (and they all were), you deserve what you’re now getting. It’s called consequences. Look it up.

Previous poster qualified anyone who thinks about just walking away from a debt, that has become inconvenient. You are a petty/grand thief.
So, as a licensed CA RE agent, I can tell you the law here. If the mortgage you walk away from on that home, is the one you used to make your initial purchase, then the lender (usually) has no recourse. The lender can satisfy the debt by auctioning off the property. Of course, you will never be able to borrow again in your active lifetime.
Here’s what almost every person does not know. If you refinanced, you are screwed. All refinanced loans are “full recourse”. That means you can’t just walk away. The lender has the right to take everything that has your name on it. Everything! And deservingly so.

The wisest thing to do is to walk away now and not wait. When you walk away take everything you can that isn’t nailed down. Like take the light bulbs. The curtains and curtain rods, drapes,anything like carpets, rugs, shower curtains. Take the trash cans. Shelves and brakets you installed. Then find a less expensive place to live or move in with relatives temporarily. Save as much money as you can and then move into an apartment and put your other belongings in a storage unti stacked to the ceiling. Theres no point in throwing good money after bad.

Its time for these folks to step up and take resonsibilty for their action. The goverment needs to stay out of this. Let the money lenders take thier lumps along with the greedy home buyers.

I say: “OH YES! WALK AWAY!” It’s the banks fault anyway! Why do the banks think that they can treat mortgages like credit cards, and intice someone in with a low rate and as soon as they can, the banks raise the rates? That’s why the credit cards are suffering also. No one is paying the ridiculous rates!
Even my 57 year old Mother-in-Law got her credit card rate raised to an outragous rate and she never been late or over the limit! If the banks will do this to a poor old lady with a $3,000 balance, just imagine what they will do to you!
FYI….I have a $114,000 mortgage at a fixed 6% and no credit cards, so I am not in this boat. But I am seeing the ships sinking as they float by.

Why is it always someone else’s fault in this country. Homeowners who signed blindly are as much at fault as the mortage lender in this situation. In every profession, there are poeple who take advantage of other people and to not seek out another opinion before making the biggest decision of one’s life is shear stupidity.
I’m a mortgage broker who has only written two non-conforming loans in the past 2 years beacause I work for my clients to ensure the best possible terms. We are not all evil, money grubbing fiends and to lump one sector into the same catagory in absolutely unfair. Trust me, the mortgage people who can no longer deliver a sub-prime loans are out of the industry and looking for the same stupid people to take money from, just in another profession….so beware if this is you.

I find it hideous that an American would walk away from their home. Get a second job and make your payments. You signed a contract. If you believe the lender should have given better advise, remember that the lender is not serving your interest. You should have gotten a lawyer if you could not read the paperwork.

What has happened to our morals and standards in America. These people ALL knew the rates could go up. They heard what they wanted to hear and jumped in with both feet. I am a seasoned 25 years experienced mortgage broker. Two of my clients ran out my door because their realtor told them they could get a 0 down, interest only… and refi in two years. I supported the fixed. They lived in the home, bought the home and now they should “refinance” or sell their home. It is not my fault or my associates fault that they and the realors sold them a bill of goods for their “dream home”. Tell them to get roommates or a second job.

NO! It is not okay to just walk away. When you buy a home and agree to a mortgage you need to stand by your word. RE prices go up and down and there is never any guarantees that your home will always appreciate. If you sign a contract you are bound to the terms of that contract, period.

I think it is sad that people are just plain lazy. You bought the house…now PAY for it. You knew what you were doing when you signed the papers. For all those people that say it was for an investment, well sometimes investments go bad. It may suck for you but for those of us that bought a house the smart way and took responsibilty for our actions we are being punished because the rest of you are too lazy to do what you should do. If you want a house then pay for it. You should have been thinking when you signed the papers or even better when you ever thought in your wildest dreams you could afford to own a house in the first place. People walking away from their house should have some sort or penelty or something because it makes me sick to see people on my block just pack their stuff and walk out. Now I have this house on my street that has a forclosure sign on it. I want to just go put a sign next to it that says, “owners were lazy and stupid.”

I would say that personally I try to keep my finances in a place that I am able to pay for my mortgage. It also helps that it come directly out of my bank monthly. However, we like everyone else (mostly everyone else) are feeling the pinch. So our rule is this: Pay in this order, the Mortgage, gas (gotta get to work to fund life), food, utilities and whatever else is left goes to whatever else we owe. That way, I always have a place to stay, a means to make money, food and electricity for my family. And if the food is low, that is what family is for.

I cannot believe that you condone walking away. Is it any wonder that people have problems?? Two million dollar homes with no money down? Are you joking??? I would hope that the lenders go after the borrower for a judgement because of the defiency. And I hope the lender loses it’s idiotic butt at the same time. Stupidity should not be rewarded in any way shape or form.

Look, this is a cycle that repeats itself over and over. Lenders get greedy. Buyers get greedy. More, More, More. I watched this all happen before from 1989 to 1994. Same sad stories. Same greedy (and stupid) lenders in different logos. Investors who were going to be millionaires now left holding the bag.
However, those who bought houses in line with their ability to pay will likely be fine. All the speculators will have to deal with the consequences of their actions. Walking away will hurt their credit for a long time. In the end, this will get worked through and we’ll all end up on the other side. In the meantime, you do your best to fulfill your promises. If you can’t make the payments, then the lender gets the collateral. Its not morality, its reality!

If it’s ok for corporations to walk away from debt, then why can’t regular people? The same people who say that “You have a responsibility!” won’t bat an eye when the same corporate thieves who sell these mortgages write off 12 billion in debt.

If you think you will be better off leaving your house, do it. Who cares what other people think?

Bring back debtors prison.

Don’t blame the banks or the lenders. You dummies spent more than you could afford. Now suck it up and live with the consequences. Don’t make the rest of us, that live within our means, pay for the mess you morons got yourselves into. It’s never ok to walk away.

Well it now the bottom of the ninth in
the land of easy money. Many of the loans are coming due and much of the so-called smart money is now out of luck and on the street.
I grew up in the 50’s and saw my famlily toil and do without. We are of humble means. We were taught to live within our means. It galls me to see all of these paper rich people complain and whine about how tough they have it.Of course there are “others” to blame. Sadly it will take a toll on the Ameican people who will have to foot the bill that our legislators will undoubtably make some sort of bail-out available.
Sadly it speaks volumes about the fabric of a generation that has the ability to blame others for their greed.Our situation will suffer as a country.We need to experience this situatiion.Maybe as a country we will be forces to work together for a common cause. Wow what a concept.

When everything is said and done, the vast majority of those loosing will be; (1) investors, (2) those with no doc (and no income) loans, (3) those who put no money down, and last but not least, (4)those who took out some crazy teaser rate or negative amort loan.

But that still doesn’t excuse just walking away. If those that are walking away think it’s the best for their situation or hurts only the banks and investment companies that re-sold the loans, they are wrong and when they try and get another mortgage they will realize that when they have to come up with 20% (or more) for a 30 yr fixed.

I guess the next thing to walk away from will be credit card debt.

Another man made disaster. The astute observer could see this happening two years ago – when people were lined up to pay anything for anything. And, of course, the mortgage brokers were there to participate in the folly. This may yet eclipse the S&L melt down from the past housing downturn. And what is really shocking is that I see major financial institutions, the guys that think that they know everything, standing there like deer in the headlights of a speeding oncoming truck. And, yet, a bailout may be on the way. But I greatly fear that it will be like surviving the sinking of the Titanic only to be picked up by the Pequod.

Now I unerstand how a Moron such as George Bush can become president.
I have never seen soo many Morons assembled in one single Blog before.
May God have Mercy On America.

Look at these responses… What a sad commentary on the collective American Mentality, morality and psyche.
Our majority seems full of hate, resentment; anger and calling for harsh or even inhumane punishment for those who would suffer financial short comings.
Pray people, pray; for yourself your immortal souls and a more compassionate world for your chilren and theirs; lest we all become consumed by satan.

There are certainly some homeowners that have come upon hard times, can’t make their mortgage payments because of job layoff, illness or other reasons beyond their control and lose their home through foreclosure. I truly feel for these people. On the other hand, those financial idiots that had no problem buying over their heads, bragging about it at the water cooler and want to walk away beacause their equity is decreasing, should never be allowed to own another home, period. They had the chance to get a fixed rate loan when they decided to get a lower payment for a shorter period of time. They knew it would adjust, but the carrot was way too tempting. Homeownership is a previledge, not a right. When I’m asked by someone, what’s wrong with kids today, I simply say no, what’s wrong with the parents? Install values with your kids and maybe they won’t grow up to be irresponsible financial idiots.

they are losers that have been brought up as shelfish brats that dont know the meaning of committment and hard work they make me sick it is the politically correct not my fault generation thanks to the clintons and the liberal media i am not a republican either both partys suck republicans are part of the blame for the greed factor in this by speculators speculating on property for profit now us middle class working people with good credit will suffer by lost property values

First, let me say, I am a mortgage broker. My business is roughly 90% conforming, and approximately 75% of that being investment property related.

I am tired of hearing people say, “It’s the originators fault”. I get investment property referrals all the time and I have yet to do a single “Pay Option Arm” loan.

90% of rental property purchases are done with a long term business plan in mind not short. Yes, I would get the phone calls asking for “Pay Option Arm” rates. I simply explained to them why these types of programs were not suited for them. But, even after these customers were told about the downfalls of these types of loans, they would still leave my company and in turn, run to another originator who would originate the loan because it’s what the customer wanted!

Using that same philosophy of: “It’s the originators fault”… Why don’t we blame the television show “Flip this House”, shown on the TLC channel? They have shown multiple times this type of loan process. Do I think it’s their fault? NO! It is the fault of the consumer. Risk vs. reward, and they took the risk.

The real question CNN should be asking: How do we get out of this mess?

Fannie Mae and Freddie Mac should develop a new program for good real estate investors. The program should require larger requirements for reserves, down payments, credit score, and a proven track record of investment property management. This alone will start investors buying properties, which will in turn begin to stop the downward spiral of housing prices. I have numerous clients that have above 750 credit scores, more than 30% down payment, and can’t get a loan through these two agencies.

Wow, once again another article about how the evil banks did everyone wrong. I’ve got an interesting idea for an article. PERSONAL RESPONSIBILITY AND WHAT IT MEANS. You are all adults and you were disclosed all the information regarding your loan. You also knew when you were lying about your income on a stated income loan. It doesn’t matter that the bank let you lie, you still lied and now it’s a problem..SHOCKING. How about some honor and principles? Sure there are some people who got ripped off when appraisers and lenders conspired to inflate value, but that has nothing to do with the monthly payment. You knew what you were getting into and you did it anyway hoping values would continue to increase 20% per year. Nevermind that the media has been talking about the bubble bursting for the last 3 years. If you don’t have the comprehension to understand the closing documents you should have hire a lawyer to look at them prior to signing them. How do waltz into a real estate closing with an average transaction value of over a quarter of a million dollars without any homework? It’s nobody’s fault but your own and it’s much easier to blame everyone else. Say what you like but you know it.

It is never OK to walk away from a mortgage or any other financial obligation. Individuals who bought into the interest only plan should have known the risks and planned for them. Nothing in life comes for free. It’s time for these individuals to suck it up and learn from their mistakes. I have no sympathy for Mr. Investor who purchased two million dollar investment homes. And for others who are struggling, do what the rest of us middle class families do – moonlight, overtime, sell your fancy cars and plasma tvs, buy a home within your means and fix the problem. Don’t expect the rest of us to bail you out.

It is immoral to walk away from your mortgage, period. If it is OK to walk away, why would it not be OK for the bank to foreclose during good times so that someone else can get a bigger mortgage to make the bank more money? Walking away is theft.

First off, no it is not okay to just walk away. Get a second job, if you feel you have to pay for your kids college education, they need to get a job while they are living with you to help pay the bills. Cut back on the luxuries like new cars, eating out, buying the newest gadgets, etc. Secondly, this mess has been complicated by the rising interest rates, falling home prices, and rising property taxes based on the initially rising home prices. People buy with an ARM, and then expect to be able to refinance in 2-5 years. Unfortunately, they can’t because too many people have “walked away” and now home prices are falling so they owe more than the house is worth, so no refinance. Or…they decide to try to stick it out and their property taxes skyrocket and they can’t afford the 1-2 point mortgage increase and the increase in taxes. There are alternative ways to deal with this.

Bottom line is simple… CAVEAT EMPTOR!

READ the contract you sign! What’s with all these people who claim they were ‘tricked’ into a mortgage?!? That’s the height of irresponsibility.

‘Walking Away’ is dumb for several reasons:

1) You destroy your credit, possibly even triggering default rates on credit cards, you’ll pay higher interest in the future, maybe even harm your job prospects, etc…

2) You get burned! You’d be better off riding out the storm for several years then cashing in, if this means renting your place out or taking on roommates, etc., then do it. You’ll be much better off in the long run.

3) You become a catalyst in the downward spiral. People who walk away from mortgages are personally responsible for the decline in housing values! That’s bad for everyone. If you can’t figure out why then go buy a brain.

It is NEVER Ok to walk away. no one put a gun to their heads to force them to take out a morgage at those rates. I fell very little sympathy for them.

Blame some people for your issues…Walking away is such a courageous thing to do. I bet your kids are proud of you. It is time AMERICANS own up. Pay for it. Why do I say this? Your the one trying to keep up with the Jones’. Now lets see what they think of you

Walking away from an agreed upon contract is stealing, period. It doesn’t surprise me that in this era of not having to be held accountable for one’s actions that some people think it is OK walk away from one’s financial obligations. It’s not. Never has been. Never will be. Thou shalt not steal.

Here is a grand idea. Get an education, work hard, live within your means and you have nothing to worry about. I would love to see the education level of the average foreclosure victim…

I’ve been wondering for years when the rest of America would catch up with my home town Detroit. The banker made loans on terms to people who wouldn’t be able to pay back unless they got big promotions (especially after their ARM reset). People on the other hand were told that the price of real estate NEVER goes down.
I have looked at my ancestral dwelling in Detroit in Zillow. In 2007 it is worth what it cost my father to build it in 1960; now is is worth half that much. In Google Earth 20% of the lots on my old street are empty of houses at all. This is an old neighborhood. There used to be a house on every lot. Some of the houses still there have holes in the roof that the satellite can pick up. Plenty of people have been walking away from their houses in my ancstral neighborhood.
A house is a place to live in not an “investment”. Houses had become unaffordable by several indices with respect to wages. There is no reason why the home owner should suffer while the banker is getting his. Rent. Walk away and start over in 5 years. It will take that long because this time a down paymetn might be required.

With current real estate values declining and with current mortgage guidelines it is unfortunately beneficial for home owners to walk away from their homes. What are their options if they can’t sustain making their current mortgage payments, can’t refi and their loans are higher than their property values. Under current mortgage guidelines they allow someone to buy a home after 3 years after a foreclosure, so if they wait the 3 years they can be a property owner again and probally be catching Real Estate Values on the upswing in some areas. In the meantime, the homeowner can live rent free for 6 months until they are evicted. Not a proponent of the situation, but this is what I am seeing on a daily basis. Rate cuts are not going to help those with trying to refi homes whose loans are exceeding their property values. Also with the credit risks associated now baked in the current mortgage rates the government is going to have to cut rates lower than we ever seen in order to compensate for a current .625% credit risk spread.

If you can not make the payments I can understanding giving the keys back and moving out, But you should pay the price for this. We all need to learn to live within our means. We are not the government who will just keep printing money to cover the cost. We all need to be responsible and understand that we can not have everything THIS INCLUDES THE GOVERNEMNT

I will have to reiterate “smitty’s” post:
Being a mortgage lender, foreclosure means many will never own again(4 years minimum). It is not desirable to be upside down, but the market always comes back. In 2-3 years when prices rebound, getting back in a home will be impossible. Quit eating out, brown bag lunch, drop the cell phone, dump the $600 SUV payments and get a second job. Don’t be the lazy American and wait for the government to give you another tax payer’s money. Show some fight and make it work. This problem is short term, quitting on this obligation will have long term consequences. In a couple of years, you will wish you shown just a little fight. Lenders took a chance on you, you probably won’t get the chance again.

When is it OK to walk away? How ’bout BEFORE YOU SIGN FOR A LOAN YOU CAN’T REALLY AFFORD???

How self righteous of all of you people to judge when you don’t know the circumstances involved. What gives all of you the moral code. Did you ever consider divorce, losing a job, making a mistake. Wow, how perfect all of you must be, in your own mind of course. I am sure the tables would be turned if you were in their shoes.

Its definitely NOT OK to walk away from their responsibilities. One post stated they should “do what is in their own best interest”. Well, its in the best interest of entire communities for houses not to go into forclosure, for interest rates not to plummet due to federal “help”, and for tax-rates not to be raised due to falling revenues. Buying a home is not a gambling excercise. Those who chose to gamble took their own risks. The rest of us should not have to pay the consequenses.

Some folks claim that there’s a penalty of sending jingle mail to the bank. While technically speaking a bank may go as far as garnish one’s wages, it’s an unlikely scenario as the national pastime will be to foreclose, and lenders will likely triage the loans they sue debtors for. Randomly selecting a subset of the folks might put some fear into the masses. However, loopholes always exist as well such as tucking the money in an IRA or owning physical gold to avoid asset garnishing.

Let me put this into a basic understanding for people out there who blame the mortgage bankers or brokers or whomever:

John Doe buys a house. His credit wasn’t the best so he was given a 2 year arm. Which means 2 years fixed then it would adjust.
This will give John Doe the chance to make his mortgage payment ON TIME at a fixed rate for 2 years.

2 months before the adjustment John Doe recives a notice from his lender stating his rate will be going up and payment.

John Doe then can either call his current lender and see if they will lower his rate (only happens if he hasn’t been late) or he can call any mortgage company.

THe point here people is if John was ON TIME with his payments before his loan and payment adjusted he would have many options. The people that are in trouble were late from day 1 and its there on fault!

Never, never, never! The absolute height of irresponsibility and a great disservice to other citizens.

Ask the question what are the “lenders” doing? There was several years of flexible underwriting and appraisals. Now all the major banks, fannie, freddie and wall street want to tighten up underwriting, knock down appraisals remove programs for self employed borrowers…. yes this is whate no income verification loans were created for, now if your not W2 good luck getting a loan.
Now the lenders want to cry foul because they will not underwrite the same loan they wrote 6 months ago, what do they expect they have eaten their young.

Good news is the market will shake out all the corprate dead weight and lending will losen up.

No it is not right to just walk away if you just cannot manage your money. If however someone got really sick or lost their job throught no fault of their own,that’s different but just becasue you don’t know how to manage your money or you were trying to get rich quick, your credit should suffer for 7 to 10 years and you should not be able to buy another house for a long time.

…one more thing ! If the government is going to bail out bankers and/or sit by while the rest of us are going to get charged more for doing ‘responsible business’ – then they should also have the guts to regulate the industry. It’s time for someone to step up and make some meaningful suggestions in DC.

Does anyone care about responsibility anymore? Or is it just me, me me, me? No wonder why we have no leadership in this country. Own up to you debts you baby-boomer scoundrels.

I don’t think you should walk away. I don’t think you should bite off more than you can chew. I would love to have the job that some people have so I could buy one of those $350,000.00 houses, You know sit on your hands go golfing for lunch talk on your cell phone play with your pda basicly not sweating at all.

either way we are in a bad spot. I only see two options to get rido of all this imaginary worth. If you walk away it’s the banks problem (credit crunch), if you don’t is yours (recession). Or how do you think we had such an amazing five growth years since 2001?

It is never honorable to walk away. If the govt grants the changes they are considering that remove the income tax for unpaid mortgage debt, many will run and not walk away leaving many communities in a financial crises. As a residential appraiser for over the past 25 years, many of my fellow appraisers ansd I have wondered why this has taken so long? Thank you Mr. Greenspan. Thanks also goes out to the slimy mortgage brokers that refused to use honest appraisers that would not give them the numbers they wanted to make the deals work. Now us honest appraisers are starting to get busy doing review appraisals on some of these over-valued properties so that the FBI, Fannie Mae, and other regulatory agencies can file charges on those brokers, title companies, appraisers, and real estate brokers that all lent a helping hand in this debacle. Your greed now has me busier than ever. The next 18-24 months are going to be really great for my business cleaning up this mess.

This has turned into a game of “hot potato”. Don’t be the loser because your to prideful to walk away.

Housing prices will continue to decline until at least 2010. You will never have enough equity to refinance into a fixed rate loan.

The Fed. continues to lower interest rates to bail out the insolvent banks. The dollar will continue to collapse. We will be faced with an economic pinch similar to the 70’s stagflation.

What solved stagflation was higher interest rates. Don’t be the loser who holds on to a house worth a third of what you paid while trapped in a variable rate mortgage that will continue to readjust every year.

With the collapse of the credit markets you will never find anyone to take the risk of refinancing your loan.

When interest rates spike to 18% like in the 80’s you will lose your house anyway.

foreclosing is perfectly acceptable. The cost filing bankruptcy has increased and for the person in such a situation, walking away is all they have left. Its just an asset, no different than that stock you lost money on that you still own. Just dump it, learn a lesson, and move on.

The banks are supposed to loan money for mortgages, because they make money from the interest paid over the life of the mortgage.

In the last five years, banks made loans so they could collect transaction fees. It should have been obvious to all lenders that housing was in an unsustainable bubble in 2005 and tightened lending standards. Instead, they created even more crappy loan products to generate (and pocket) more fees.

Those on both side of these bad loans are at fault, but the idea of staying a debt slave for the rest of your life to prop up a bunch of unscrupulous, wealthy bankers is too much. Walk away and hope everybody learns from the pain.

This is not a character issue. This is not an ethical issue. If you look objectively at this difficult decision, you’ll see it’s a financial decision, and often a prudent one.

Yes, there are innocent bystanders: neighbors whose own home values will depreciate when others in the neighborhood walk away. Yes, there are angry spectators: friends and co-workers who have too much equity or other such constraint to themselves walk away from an investment gone sour.

The average person trying to make a comfortable life for his family can’t simply be expected to grit his teeth and indefinitely write inflated checks on a soured investment (despite his *ability* to walk away) out of a sheer sense of obligation to his lender, community, neighbor, or whomever.

People will say “You executed a contract! You signed on the dotted line!” These statements, while true, are irrelevant. Everyone has a price. With every $50K or $100K a home depreciates, each owner becomes ever more likely to compromise his agreement with his lender. While not everyone has a point at which they’d walk away, most people do. With the exception of the truly “virtuous” (quotations to reflect sarcasm), people who have not walked away either have no immediate need to or have not hit the point at which it makes sense…yet.

It brings me no joy to share these sentiments, but I believe they reflect the reality around us.

I file CH13 every 8yrs, did so in 07′ walked away clean record. Looking to buy again in 09.

First, It was greedy people who defaulted. How can we-the responsible people who have made the payments on time WALK AWAY. Even though it is us who are suffering due to falling home prices and market. We should not add to the misery, but hold our heads high in times of trouble. Home prices plummets but the PROPERTY TAX rally!!! So Far nobody is trying to bail us – not by giving incentive for making timely payments or larger home owners exemption!!

Absolutely irresponsible. How can ANYONE justify the decision to bail out on their responsibility for the decisions they make? If you made the bad decision to buy a home with a loan that you either didn’t understand, couldn’t afford, or just didn’t care as long as you got what you wanted, how can you now say that it’s someone else’s fault? These so-called “toxic mortgages” that everyone scapegoats were merely a financial tool that can be used badly or well, like anything else. If you use it wrong, you get bad results. If you use it well, it does what it’s supposed to. As a mortgage broker and business owner, I say screw anyone that shirks their responsibility like this. You deserve debtor’s prison.

It’s not ok to walk away. People got themselves into this mess and now they have to pay. They were trying to make quick money and got caught, now they have to pay.

The american way; if it’s broke, dump it and blame someone else; can’t afford it? charge it and then declare bankruptcy so everyone has to pay for it. Better yet, fake some pain and suffering, sue someone using a lawyer you saw on tv at 1 in the afternoon! No wonder this country is going down the toilet.

Funny enough, its good these people do not write the bankruptcy code. i fact, isn’t that why we have the code to begin with?

geesh, talk about blaming the victim. i think the people would rather not just dump their houses.

i’m reminded of the opening of fitzgerald’s novel, the great gatsby. (which was written in times not unlike our own)

“never judge a man until you’ve walked a mile in his shoes”

I think too many people are walking away… it really isn’t fair that some people made stupid choices for their loans and still tried to keep up with the neighbors. When you have a morgage, you have to make sacrifices to keep your house. My husband and I would have loved to have a brand new house but we knew we wanted to keep our children out of daycare. We also knew that in New England you have to factor your utilities and everthing into your budget. I think a lot of banks took advantage of a lot of people.
Instead we drive used cars and live in an older home which is quite small. We buy things on sale, use coupons and avoid silly purchases.
Use your head
I hope there is some type of penalty for people who do this .

Morally it is not right to walk away from your obligations. But who are we to judge in this situation? The banks and mortgage brokers told people they could afford ridiculous amounts beyond what they were capable of handling, took all the money on the transaction, then turned around and sold the mortgages off to financials who bundled them, misrated them, and sold them back to public via CDOs. Now we’re dropping rates and screwing the public by raising inflation and dropping the dollar in an attempt to bail out those very same banks and financials. If those institutions aren’t going to be held accountable for what they did, why should the homeowners? Do what’s best for you and your family – the Fed won’t be riding to your rescue, and that $600 rebate check isn’t going to compensate for the $60,000 drop in your house value.

i used to work 80+ hrs a week.
i became disabled.
now due to (ssd) red tape i have no income.
the only advice i got – foreclosue or bankruptcy — i do not want either.
a loan modification wont be allowed, i have no income.
any advice ????

I have no problem with people walking away from a house they made a dumb financial decision on. I have no sympathy for the financial institutions who made bad financial decisions and lent these people money.

I do however take exception when our government wants to get involved and subsidize people and business with my tax dollars. If I loose money in the stock market that was the risk I took. If I purchase a product and it depreciates faster then expected then that was the risk I took. Houses are like every other commodity, prices go up and they go down. Basic economics! The current housing environment is NO surprise to anyone. At least anyone with a third grade education or higher.

Anyone who grants credit to these people again are the real idiots and everyone who deals with these individuals needs to act responsibly to make sure these individuals past, poor financial decisions are factored in to any new credit lent at a premium.

Let these people fall hard. Maybe, just maybe they learn from their mistakes. If you hear anyone crying about their house loosing value, then point them to the cardboard box on the street and say there you go.

These people are getting what they deserve. A lot of these people were living beyond their means. Basically, living fake, period! They signed them papers, they should pay up. But, if you lose your job, now that is the only time I would say walk away. But, all these speculators, and people thinking there house is an investment, should pay the price! People, your house is your place to stay!

Hey isn’t that what is supposed to happen? If you can’t afford it, the lender just takes it back. Wasn’t that their plan? When the gave out the ARM loans, the assumption that the rate would spike, the borrower couldn’t pay and they’d get the house to resell at a profit. I guess it’s bout time the predatory lenders bit themselves. Walk away and “let them have it!”

If someone is unfortunate enough to make a bad financial choice then it’s reasonable to have to be accountable – just as if their fortune went the other direction. Don’t heap your irresponsible actions on to the rest of the American population.

It’s ok to walk away whenevr it makes sense for you to do so. Period.

Walk away, jeez. Like the rest have said – don’t make a deal you can’t deliver on. It is, in my opinion, going to be on the back of the lender to pursue those that ‘walk’ in civil court for breach of contract. Of course they already know blood cannot be had from a turnip.

It is a disgrace to dump it and walk away and let the rest of the country pay for your problems. Have some dignity and accept the responsibility you signed up for. I do not think people in other counties behave like this. The bad credit will haunt you, not as much as it should, but it will not just be forgotten and there should be a public shame associated with overextending and being financially reckless

Well, ole David is the exact cause of the problem. He buys a couple of homes for a million bucks, with an attitude matched only by Scarlett O’Hara, says “fiddley dee” and walks on his committment.

Thanks David, it’s people like you who created this mess.

You are the cause.

Walking away from a mortgage in times of distress is BRILLIANT. Suzie O always says” People first”!!!

It’s always someone else’s fault. That’s what I’m teaching my 6 year old. That way he’ll always feel empowered to consume everything he wants and never have to pay for it.

Wait until these walk-away’s start trying to rent an apt. or buy another house after reneging on their prior obligations. I’m SURE they’ll blame someone else for the fact that there’ll be nowhere to live. I hope their parents have a big enough place to take ‘em back in.

Where is your credibility?!!! Since when is it acceptable to walk away from your responsibility. Pay what you owe and hold you head up! If you are looking to gamble, then go to Vegas!

The business of making home loans has become so corrupt that I would tell anyone to walk away whenever they felt like it. Between the realtors, banks, closing companies, etc. greed taken over the industry. The subprime debacle has been caused by the industry itself getting greedy. Just walk away.

I am a first time home buyer and I actually welcome the fact that people are walking away from the homes and mortgages they cannot afford.

I have been waiting patiently for a long time for the correction to come so a house becomes much more affordable.

The more people walk away, the more glutted inventory in the market and the more likely the banks have to cut prices drastically to move REOs.

Of course! That is exactly how lenders structured their loans. Lenders knew full well the risks and possible consequences of their subprime loan practices and didn’t give a damn. The reason; they were just going to sell the loans to someone else, make a quick profit and let the ball fall in someone else’s lap. Well, it looks like that is exactly what happened, borrowers and investers (worldwide)paid the price.

This is todays Money News:

“Macys’s Retailer said it will cut about 2,550 management jobs and consolidate three regional divisions in an effort to reduce costs and boost sales”.

These management jobs are people who pay mortgage. HELLO, is anyone listening? Nobody want to loose House, unless they are force to do soo. Most American working class pays morgage. Hello!!!

I hope our nations banks and lenders tighten up their guidlines and never approve a borrower for any credit following a foreclosure for at least 7 to 10 years.

This is a business, and these borrowers and lending institutions need to be accountable for their investments. Both will suffer long term for their poor decisions.

It is never ok to just walk away from anything! Homeowners know what they where getting themselves into when they applied for the loan.People always say, I will worry about it later when that time come for a higher payment. Therefore, leaving us all to clean up your mess.There are always other ways to try to keep afloat–Listen to Dave Ramsey show!

Why not walk away? The concepts of personal responsibility and integrity died a long time ago in this society. Look around. Show me a sector in our society that embodies these principals. The rules are grab all that you can get because you’re entitled to it. If things go wrong don’t forget that you were a victim of some unscrupulous______(fill in the appropriate oppressor).

We used to have this thing in the United States called “Debtor’s Prison”. Remember that? It was for all those people who couldn’t come through on their mortgage payments. I think we should bring it back. Truth is, the taxpayer is going to be stuck for your bad borrowing practices. Sure, there were predatory lending practices, but did you people just clue in that banks are in the business of making money off of you? You were foolish to sign up, and it’s your responsibility. I think there should be more profound credit rating consequences for all those “fast money” types who were flipping properties and now are walking away. Warren Buffet said that “the tide is going out and we’ll see who was swimming naked.” Well, there’s a lot of skinny dipper defaulters out there. Sure, I feel sorry for the families who own a “deteriorating” property value and are caught with huge payments, but they also signed up and are ultimately responsible. The taxpayer isn’t nor should be held accountable. Just because you’re an American doesn’t mean that you can have something for nothing – and walk away when things get rough – no matter how much George Bush digs us into an economic hole or gives us “free” tax money. No doubt, our new Chinese masters will change things around here when we ultimately sell out to sovereign funds as theirs. I’m sure Debtor’s Prison will be back in vogue when that happens.

It seems to me that in these days no one wants to take responsibility for their own actions. If someone signs something that seems too good to be true, then they suffer the consequences. It’s always somebody else’s fault, not mine. People need to stand up and be responsible for their actions. That’s the way it should be, end of story.

It is quite uniformed to speak of walking out on a mortgage as “committing a crime.” It is never a crime to breach a civil contract, such as the contract between the mortgager and mortgagee. CA (as an exmaple) will not lenders come after the mortgagees for the difference–talk to your CA legislator! The lenders assume the risk when they make the loan. They have/should have built in the risk of not being able to collect in CA into the interest rate. The lenders are not stupid, although they may have (at their risk) assumed that values would not decrease and thus, did not properly factor this into the interest rate. Civil contracts should always be breached when economically efficient. Why pay a $400K mortgage on a $300K house? If you are stupid, then maybe you can explain why. Once again–it is not a crime to breach a civil contract. I cannot believe so many people are so ignorant.

It seems responsibility for your own actions is losing favor with large percentage of our country. ‘Walk away’ or ‘Get away with it’ is the two common calls of the ignorant, self centered, selfish ‘I want it all, but don’t ask me to be responsible for it’ irresponsible losers. If you made a bad loan, YOU made it. No one forced you into it. YOU took a chance on the rates, and YOU lost, no one else. Live with it, or PAY attention to what you sign/do in the future.

As I said, responsibility for ones own actions are becoming out-of-style. You get a ticket, go to traffic school and get it erased. God forbid you accept your medicine. Haven’t paid your taxes, or they are to huge? Get a tax attorney, you will pay pennies on the dollar, while responsible CITIZENS pay what they owe. They have two things you do not, SELF-RESPECT and CHARACTER.

Come on irresponsible, greedy, chance taking idiots, GROW UP!!! As hard as it may be for you, TRY to act like adults and set better examples for your children to follow. Least they will end up burdening society like YOU do.

Our government has failed to regulate this irresponsible banking industry. All of us get hurt, good homeowners who loose equity and the flippers.
The banking industry refuses to manage itself as we are seeing now and in the S&L crisis in the 80’s
Perhaps the public has finally found a way to fine these people for their irresponsible activites. Just walk away.
I’m considered well off by most peoples values and will not suffer any significant amount by what is going on. I’m very frustrated with what is happening and no permanent action is being taken to prevent it from happening again.
Does the public realize that banks are still heavily lobbying to enter the realestate brokerage business. If they are successful then we will see even worse problems

Walking away should be a last resort, but if you have to, then so be it. What’s the difference if you can’t afford it, they will take it from you eventually.

I’m lovin’ it. The lady we got our place from didn’t walk away. She got booted. We got the place for $90k less than what it was paid for in just under 1 year after she bought it, and the banks lost $150k after all the fees were paid out after the short sale. From the guy in New Hampshire who posted below, “Thank God for making idiots.”

For people who buy houses for “investment” and planning to flip, let them walk away and hope they lost more money. No tears for the banks that are stupid enough to lend to these people who had no intention of living there and put nothing down. For the people that are actually living in the houses, they should be helped as much as possible.

There is a difference between real estate and stocks. In real estate, it is the LENDERS who created this bubble. By lending people higher and higher amounts for the same property, they in effect drove up the “real market price” of the property. The appraisers were in on it too. Appraisal is such a joke profession. If you say a house that was worth $150k last week is worth $170k now, Boom, it magically is. Because a bank will lend that to you now.

Home prices became inflated due to this very collusion between appraisers and lenders.

Granted, this does not excuse people who took on a mortgage they could not afford. But why shouldn’t the institutions which engineered the housing market bubble share some of the pain by eating some foreclosure losses now? That’s true market justice.

to: Posted By Anonymous : February 6, 2008 3:06 pm

Yeah lets give them a Life Sentence.?

Statements like this make me wonder if our country will ever regain it colective sanity,
You have some Seriously twisted concepts that are completely void of rational and reasoning in your head.
May I suggest psycho analysis before you become a complete sociopath.

Stripping people [who default on their home loans], of their constitutional rights for LIFE; is a little disproportionate I would think.
Did you really think about it before you actually made that insane statement.?
I pray that your have no children who are suffering at your hand for eating the last cookie in your pantry or some other capitol offense that you have sentenced them to some sort of Life long suffering.
My God…!

I think it should be required to have
some sort of(PMI) private mortgage insurance when taking out these high risk lones. Then if you go into default the insurance would help keep the mortgage until you can refinance with the bank.
No one wins when properties go into forcloser because everyones property values go down even if you have a solid mortgage and can make the payments you’ve lost equity because your next door neighbor went into forcloser.

I don’t think it is OK to walk away from any commitment a person makes, whether that is for a house, car, credit card, etc. The majority of people are not stupid…except when it is to their benefit. They knew going in that it would be a stretch for them and when push came to shove they made a choice what to pay and what not to pay. Now due to their greed and their choice not to live within their means, my property value suffers AND as a responsible tax payer who pays their bills on time AND who doesn’t live beyond my means, I now have to bail them out of the mess they created.

Had the housing prices not been so ridiculously over-blown in the last five years, had the “seller’s” realtors not been so eager to cash in HUGE on each sale . . .

Welcome to the wonderful world of greed.

Greed. Envy. Sloth. We’ve heard ‘em before. The 7 deadly sins . . . they are what makes the world go round, but that’s also why they are considered deadly . . .

We will all do what is our basic instint — if it is sloth or greed we will walk-away; envy (of the Jones’)is how many of us got in this dilemma anyway . . . .

I am a responsible person, but I am not stupid. I will walk away.

The bankers made the loans, now its time to eat their lunch, walk away!

“Heck NO”
I already pay for insurance fraud, thievery, cheating, laziness, infidelity, unfit/unavialble parents, food stamps…ad nauseam. Now, I have to pay for irresponsible lenders and homeowners (it takes two to tango you know).
Who cares about the ‘Joneses’ when you now all you have is being repoed? You screwed up, live with it.

Many of you post that Bankruptcies are worse on your credit then foreclosures. Nothing can be farther from the truth. I used to work for Countrywide and you wont get an a paper loan in the next 5+ years while compensating factors and good payment history can overshadow a bankruptcy in 2 years.

Also, good luck renting with a foreclosure on your credit. Most landlords do a credit check and once they see your housing default you will move to the back of the pile.

Much of the blame falls on lenders and mortgage brokers for “steering” customers into high commisioned low rate ARMS.

Yes, every loan application asks if you have had property forclosed upon in the last 7 years! It is a 7 year decision. But at the same time, if the value of a home is less than the mortgage and the payments are too high to handle…it is time to accept the fact that you made a bad decision and let nature take its course. The banks have anticipated forclosure loss and they did give you that loan with almost no equity in the first place. Personally, I think BofA is in major trouble for buying Countrywide. Home prices are goind no where but down and the loans that Countrywide has been making over the last six years were very risky. I’m talking about extremly low down requirements and even having negative amortization on some loans. When buying a home or refinancing…YOUR ability to afford the monthly payment is all that matters! Think twice.

Joe from Hillsboro, NH is hot! My friends and I want to date him!

Seems to me that home buyers signed the mortgage papers, agreed to pay the bank back, and now should do so. Man up to your commitments and pay the bills. Running away from responsibility because it “gets too hard” is one huge problem in this country these days.

i think it’s okay to walk away from home loans at this point even though i have lived in mine 28 years. i can’t afford it any longer at this junction and i feel i could turn in my keys. i also feel that way about my childrens student loans. you have to get a education and then there are no good paying jobs to pay back the money it’s relentless.