When is it ok to walk away?

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 scre