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What's unethical is banks lending out money they don't have on reserve at interest, sucking you for a few year's worth of payments, and forclosing on you when you fall behind. Can anyone else imagine lending money they don't actually have at interest and then getting the asset purchased with the money that never existed to begin with when the borrower was unable to repay the debt? It's totally nonsensical, but that's how banking and money work.
Yes, sell first. We had to move, too. Had to, as in job relocation. However, I sold my home first, although it took us two years and my husband had to drive 2 hours to work ONE WAY, nearly every day of those two years. But, I'm half your age and I did it the right way. I made sure I wasn't going to play financial roulette with my family.
Do you want to talk about being overwhelmed???? Try spending $800 extra money in gas each month for all that commute. Try keeping your home show ready for almost two years with two small children afoot. Try never seeing your spouse because he's gone from 4:30 am-8:30 pm everyday because of the long commute. I felt like a single parent and I worked full time. Our family life was pretty much on hold for almost two years. It has been the hardest two years of my life, so I do have empathy for those who do and have to sell before moving on to their next home.
By the way, I'm a conservative, not a liberal. I don't know everything nor do I proclaim to know everything. But your blame is still misguided. I really do wish you weren't in the position you find yourself in...
Exactly.
It's not rocket science.
1) Sell
2) Rent a house and storage unit until you......
3) Buy
It may not be easy (as your post illustrates) but it's better than taking a gamble that could backfire as badly as it did for Humble101.
Defaulting in and of itself does not fulfill the contract. But defaulting and then mailing in the keys and giving up title to the home securing the loan is fulfilling the contract.
Mortgage contracts have language stating that if the borrower ceases to make payments, the bank will take the house back. Therefore when you cease to make payment and mail in the keys, you are fulfilling those specific terms of the mortgage contract.
IT IS THAT SIMPLE.
If banks don't like these terms, then they should not lend under these terms because they are not compelled to make loans whatsoever. But once they do, they accept that borrowers have the option and possibility to stop paying and that the bank then has the right to possess the house per the AGREED UPON TERMS OF THE CONTRACT THEY THE LENDER THEMSELVES WROTE AND WHOSE TERMS THEY OBVIOUSLY UNDERSTOOD AHEAD OF TIME.
A mortgage is no different than pawn shop loans or title loans secured by property. Lenders make such loans knowing many people have the option of defaulting and surrrendering the collateral. Walking away from a mortgage is no different than people walking away from a pawn shop loan secured by, say, your wedding ring or walking away from a car title loan by giving up your car. If you don't repay but also surrender the collateral to the lender, then the terms of the agreement IS FULFILLED IN FULL.
Last edited by sonoranrat; 01-21-2009 at 01:57 AM..
Defaulting in and of itself does not fulfill the contract. But defaulting and then mailing in the keys and giving up title to the home securing the loan is fulfilling the contract.
Mortgage contracts have language stating that if the borrower ceases to make payments, the bank will take the house back. Therefore when you cease to make payment and mail in the keys, you are fulfilling those specific terms of the mortgage contract.
IT IS THAT SIMPLE.
If banks don't like these terms, then they should not lend under these terms because they are not compelled to make loans whatsoever. But once they do, they accept that borrowers have the option and possibility to stop paying and that the bank then has the right to possess the house per the AGREED UPON TERMS OF THE CONTRACT THEY THE LENDER THEMSELVES WROTE AND WHOSE TERMS THEY OBVIOUSLY UNDERSTOOD AHEAD OF TIME.
A mortgage is no different than pawn shop loans or title loans secured by property. Lenders make such loans knowing many people have the option of defaulting and surrrendering the collateral. Walking away from a mortgage is no different than people walking away from a pawn shop loan secured by, say, your wedding ring or walking away from a car title loan by giving up your car. If you don't repay but also surrender the collateral to the lender, then the terms of the agreement IS FULFILLED IN FULL.
Moderator cut: personal remarks are off topic
Have you ever actually read mortgage loan documents? Do you know the difference between curing a default and exercising a remedy? Do your loan documents say mailing in the keys is considered fully performing? Do you know that the lender's inability to sue borrowers for a deficiency is mandated by law, not contract? Do you know what the words "I promise to pay" mean?
If we all went around breaking our promises all the time, our economy would be in shambles.
To the people wondering whether to walk away or not based on supposed "ethics":
A contract is not a holy vow to adhere to what you "promised" to do no matter what. It is governed by the terms and the legal framework surrounding the contract. And everyone has the inherent RIGHT to withdraw from a contract as long as all the contractual terms are met including what "remedies" are allowed under law.
Almost all contracts are structured this way. It is structured this way because there is the OPTION and POSSIBILITY to withdraw from it. That is certainly the case in business deals (ex. a sale of a company or merger) where after agreeing to it, the party can withdraw and simply pay the agreed upon compensation. And if the company chooses to do so as has happened many times, no one says they acted unethically by backing out and paying the compensation.
When you get a loan on collateral like a pawn shop or car title loan, it is completely ethical not to pay off the loan as long as you surrender the collateral because that is the totality of the agreement (pay and keep the collateral or surrender it) This is in fact done all the time and lenders are fine with it because the lender is suppose to make sure the collateral more than covers the loan obligation. (The mortgagors were suppose to do the same thing but it's not YOUR problem that they failed to do so).
When you sign a contract to buy a house or have one newly built and put down a deposit, you have every RIGHT to withdraw. You simply need to adhere to the agreement that you surrender your deposit. And lots of people have done so, especially with new builds. Sure they "promised" to complete the sale. But lots of people decided to walk away and surrender their deposits. Were they "unethical"? Hardly. They adhered to the totality of the agreement and the builders always knew they could and HAD EVERY RIGHT TO WALK AWAY and your deposit serves as their agreed upon compensation for you doing so.
The same is true of a marriage "contract". Are the vows normally "until death"? Yes but no one would say that you have to stay in an unhappy marriage until you or your partner dies literally. It is understood that one partner has the UNILATERAL RIGHT to WALK AWAY from their marriage and as long as they adhere to the overall "terms" of the contract including dividing assets and providing for spousal and child support if applicable.
Other than mortgages, it is routinely that companies withdraw from deals and pay compensation to the other party. It is routine that people surrender collateral rather than continue to pay off pawn shop or car title loans. It is routine that buyers surrender deposits to back out of completing home sales. And it is certainly routine that people back out of marriages. Backing out of a mortgage is no different than backing out of these other agreements and no less ethical. So if you think that backing out of these other agreements is ethical than so is backing out of a mortgage. It is no different.
Those who don't want to avail themselves of their RIGHT to WALK AWAY can freely do so. That doesn't mean that you should not. So if you want to walk away from your mortgage, do so with no qualms whatsoever.
Location: Halfway between Number 4 Privet Drive and Forks, WA
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Quote:
Originally Posted by sonoranrat
To the people wondering whether to walk away or not based on supposed "ethics":
A contract is not a holy vow to adhere to what you "promised" to do no matter what. It is governed by the terms and the legal framework surrounding the contract. And everyone has the inherent RIGHT to withdraw from a contract as long as all the contractual terms are met including what "remedies" are allowed under law.
Almost all contracts are structured this way. It is structured this way because there is the OPTION and POSSIBILITY to withdraw from it. That is certainly the case in business deals (ex. a sale of a company or merger) where after agreeing to it, the party can withdraw and simply pay the agreed upon compensation. And if the company chooses to do so as has happened many times, no one says they acted unethically by backing out and paying the compensation.
When you get a loan on collateral like a pawn shop or car title loan, it is completely ethical not to pay off the loan as long as you surrender the collateral because that is the totality of the agreement (pay and keep the collateral or surrender it) This is in fact done all the time and lenders are fine with it because the lender is suppose to make sure the collateral more than covers the loan obligation. (The mortgagors were suppose to do the same thing but it's not YOUR problem that they failed to do so).
When you sign a contract to buy a house or have one newly built and put down a deposit, you have every RIGHT to withdraw. You simply need to adhere to the agreement that you surrender your deposit. And lots of people have done so, especially with new builds. Sure they "promised" to complete the sale. But lots of people decided to walk away and surrender their deposits. Were they "unethical"? Hardly. They adhered to the totality of the agreement and the builders always knew they could and HAD EVERY RIGHT TO WALK AWAY and your deposit serves as their agreed upon compensation for you doing so.
The same is true of a marriage "contract". Are the vows normally "until death"? Yes but no one would say that you have to stay in an unhappy marriage until you or your partner dies literally. It is understood that one partner has the UNILATERAL RIGHT to WALK AWAY from their marriage and as long as they adhere to the overall "terms" of the contract including dividing assets and providing for spousal and child support if applicable.
Other than mortgages, it is routinely that companies withdraw from deals and pay compensation to the other party. It is routine that people surrender collateral rather than continue to pay off pawn shop or car title loans. It is routine that buyers surrender deposits to back out of completing home sales. And it is certainly routine that people back out of marriages. Backing out of a mortgage is no different than backing out of these other agreements and no less ethical. So if you think that backing out of these other agreements is ethical than so is backing out of a mortgage. It is no different.
Those who don't want to avail themselves of their RIGHT to WALK AWAY can freely do so. That doesn't mean that you should not. So if you want to walk away from your mortgage, do so with no qualms whatsoever.
And if you follow this advice, you can then demand Sonoranrat to pay your legal bills should you live in a recourse state.
Are you a lawyer or do you just play one online?
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"Borrower's promise to pay" and "Promise to pay secured".......my bad.
