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Old 12-17-2009, 01:08 PM
 
Location: Arizona
824 posts, read 2,073,871 times
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Last edited by Yac; 04-18-2014 at 07:20 AM..
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Old 12-17-2009, 01:30 PM
 
Location: Phoenix
3,995 posts, read 8,862,573 times
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Quote:
Originally Posted by azjack View Post
Moderator cut: post removed
This isn't an Arizona article but a national one; I wonder if these people calculated their homes values in the future and what a default judgement on their credit will have on them in the future. Seems like a risky proposition to just walk away.

Last edited by Yac; 04-18-2014 at 07:20 AM..
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Old 12-17-2009, 01:39 PM
 
Location: Arizona
824 posts, read 2,073,871 times
Reputation: 604
It is from a national newspaper, and includes focus on three residents of Metro PHX.

The third one is kind of interesting too:

"Christina Delapp bought a house out of foreclosure in July for $49,000 in cash. She says she will stop paying the mortgage on another home she still owns in Tempe if she can't sell in the next few months for more than the $312,000 that she owes."


Quote:
"what a default judgement on their credit will have on them in the future."
I guess that they weigh the six figures of unsecured debt against the loss of 160 or so FICO points, and then make the call.
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Old 12-17-2009, 01:49 PM
 
Location: Sonoran Desert
29,345 posts, read 39,740,850 times
Reputation: 18786
Quote:
Originally Posted by fcorrales80 View Post
This isn't an Arizona article but a national one; I wonder if these people calculated their homes values in the future and what a default judgement on their credit will have on them in the future. Seems like a risky proposition to just walk away.
In many if not most cases, there is not going to be a default judgment - if by that you mean a "deficiency" judgment. The credit hit is the worst of it and that may be tolerable to them. In the case of the person who had enough cash to pick up a very bargain basement house that might be totally acceptable. Credit ratings these days do hit other things though, like insurance rates, renting a car, owning a cell phone, getting utilities. Credit is more pervasive in our lives than we might appreciate before we lose it.
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Old 12-17-2009, 01:56 PM
 
Location: Phoenix
3,995 posts, read 8,862,573 times
Reputation: 901
Quote:
Originally Posted by Ponderosa View Post
In many if not most cases, there is not going to be a default judgment - if by that you mean a "deficiency" judgment. The credit hit is the worst of it and that may be tolerable to them. In the case of the person who had enough cash to pick up a very bargain basement house that might be totally acceptable. Credit ratings these days do hit other things though, like insurance rates, renting a car, owning a cell phone, getting utilities. Credit is more pervasive in our lives than we might appreciate before we lose it.
Thank you for the deficiency clarification. And yes, even thought a FICO score, on average may drop only 160 points in a good scenario, the lending practices of yore are long gone. Good luck establishing acceptable credit or obtaining a great mortgage rate, much less a mortgage in a decade or so. I haven't worked out any economic models, but the long term costs over short term gain might not balance out for many.
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Old 12-17-2009, 02:02 PM
 
Location: Arizona
824 posts, read 2,073,871 times
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Quote:
"And yes, even thought a FICO score, on average may drop only 160 points in a good scenario"
If the WSJ is correct, 160 point drop is more like the worst case scenario for a foreclosure.


I think that five years of post-foreclosure clean credit would put one into a reasonable credit position, assuming that one wanted to acquire mortgage debt again in the future.
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Old 12-17-2009, 02:07 PM
YAZ
 
Location: Phoenix,AZ
7,075 posts, read 11,840,791 times
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I'm sorry, I just don't get it.

Why in the hell would anyone purposefully default on a mortgage?

We just don't do that kind of stuff where I come from.

It doesn't make sense to me.
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Old 12-17-2009, 02:15 PM
 
Location: Not tied down... maybe later! *rawr*
2,689 posts, read 6,210,857 times
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Quote:
Originally Posted by YAZ View Post
I'm sorry, I just don't get it.

Why in the hell would anyone purposefully default on a mortgage?

We just don't do that kind of stuff where I come from.

It doesn't make sense to me.

Growing up not being taught personal responsibility?

I don't feel one bit sorry for anyone unable to make a house payment. People that couldn't afford a $500 TV felt it was alright to sign the papers for a $500,000 home and then when they can't pay, they go on TV crying about the prospect of being homeless. Sorry, I just have no sympathy for them.

And, NO, I don't blame the lenders. I blame the idiots that agreed to accept what the lenders were offering, knowing very well they couldn't afford it.

I mean, really, just because I have a $30,000 limit one one of my Visa's doesn't mean I'm gonna go out and buy $30,000 worth of junk... and then wonder how to pay it and then complain about the "horrible people at Visa".

Buy a home you can afford... or keep renting.
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Old 12-17-2009, 02:24 PM
YAZ
 
Location: Phoenix,AZ
7,075 posts, read 11,840,791 times
Reputation: 6298
Quote:
Originally Posted by canibeyou View Post
Growing up not being taught personal responsibility?



Buy a home you can afford... or keep renting.
Yep.

Job loss, medical stuff, etc. can force you into that mess.

Then you MUST downsize, pick up the pieces and move forward.

I s'pose home ownership is moving towards the same thinking as marriage nowadays.

Oh well, I can get a better deal elsewhere.
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Old 12-17-2009, 02:33 PM
 
Location: Sonoran Desert
29,345 posts, read 39,740,850 times
Reputation: 18786
Quote:
Originally Posted by fcorrales80 View Post
Thank you for the deficiency clarification. And yes, even thought a FICO score, on average may drop only 160 points in a good scenario, the lending practices of yore are long gone. Good luck establishing acceptable credit or obtaining a great mortgage rate, much less a mortgage in a decade or so. I haven't worked out any economic models, but the long term costs over short term gain might not balance out for many.
I'm not buying that for a minute. The Loan Arranger and his pal, E.Z. Credit are just on vacation. They'll be back before you know it. Our economy is lost without them.
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