Walking Away From Foreclosure Becoming Socially Acceptable (agents, Realtor, short sale)

[bentlebee]

Welcome to RealtyTrac

Specially the last part should be read by people thinking about walking away!

[Gretchen B]

Originally Posted by bentlebee

Welcome to RealtyTrac

Specially the last part should be read by people thinking about walking away!

It's a pretty scary scenario right now. It does hurt your credit for years to come, but some states (like AZ) there won't be a judgment issued. What I think is really scary is that I've run across several houses that are slated for auction due to foreclosure, and when I research the mortgage history, the owners have recently gotten Cash Out Re-Fi's, taken the cash, and then walked away from the house. I've even heard of some people taking that cash and using it for a downpayment on a home in another state (before they default on their current mortgage).

Not all people going the "foreclosure" route are the naive buyers who purchased with ARM's that are resetting to unaffordable rates. I'm seeing more and more that are simply irresponsible owners that probably already have bad credit and are just walking away. That's bad enough - but these others who are running the cash-out refi schemes are dispicable, IMO.

And guess who gets to pay for all these foreclosures? That's right, the rest of us!

[bentlebee]

Originally Posted by Gretchen B

It's a pretty scary scenario right now. It does hurt your credit for years to come, but some states (like AZ) there won't be a judgment issued. What I think is really scary is that I've run across several houses that are slated for auction due to foreclosure, and when I research the mortgage history, the owners have recently gotten Cash Out Re-Fi's, taken the cash, and then walked away from the house. I've even heard of some people taking that cash and using it for a downpayment on a home in another state (before they default on their current mortgage).

Not all people going the "foreclosure" route are the naive buyers who purchased with ARM's that are resetting to unaffordable rates. I'm seeing more and more that are simply irresponsible owners that probably already have bad credit and are just walking away. That's bad enough - but these others who are running the cash-out refi schemes are dispicable, IMO.

And guess who gets to pay for all these foreclosures? That's right, the rest of us!

They take the cash out of it, zero down and take everything that can be taken from mirrors to appliances. Isn't that grand theft? Then they leave the property in distress so the whole neighborhood has to look at these homes and feel disgusted by these people. If these people won't get a judgment they will do the same thing over and over. In our street there is a person going into their 3rd foreclosure in 10 years!!! How is that possible? Shouldn't the mortgage companies have done a background check? These people got a special rate (high) because of the unstudy income since 1 is a realtor and they had bad credit. Then we had 1 neighbor who wanted to move to a bigger home and couldn't get his other home sold which is in the same community but backed up to a busy road, and in the same street the investor who walked away with everything......this is just 1 street of 14 homes.

[Gretchen B]

Unfortunately, bentlebee, it's sometimes the people that know how the system work (i.e. mortgage originators, investors, and yes sometimes unscrupulous agents) who are doing this. Sometimes they are incredibly naive or stupid (not sure which), but sometimes it's intentional. Either way, it's reprehensible. If they're that uneducated about real estate, then they have no business advising other people. The lenders and real estate agents have a fudiciary responsibility to their clients.

Personally, I think the licensing agencies and regulatory agencies need to go after these "professionals". It's one thing to fall on hard times. It's quite another to deliberately commit fraud (which IMO is what these examples are).

Guess it's time for me to step off my soapbox, but I see much more of the same if something isn't done quickly to put a halt to this.

[bentlebee]

Originally Posted by Gretchen B

Unfortunately, bentlebee, it's sometimes the people that know how the system work (i.e. mortgage originators, investors, and yes sometimes unscrupulous agents) who are doing this. Sometimes they are incredibly naive or stupid (not sure which), but sometimes it's intentional. Either way, it's reprehensible. If they're that uneducated about real estate, then they have no business advising other people. The lenders and real estate agents have a fudiciary responsibility to their clients.

Personally, I think the licensing agencies and regulatory agencies need to go after these "professionals". It's one thing to fall on hard times. It's quite another to deliberately commit fraud (which IMO is what these examples are).

Guess it's time for me to step off my soapbox, but I see much more of the same if something isn't done quickly to put a halt to this.

I know it is hard to feel sorry for these people and I don't but I feel sorry for people who got in financial trouble because of an illness and their health carrier refuses to pay, etc.... the rest should be prosecuded and not bailed out by the government.

[Janipoo]

Originally Posted by bentlebee

I know it is hard to feel sorry for these people and I don't but I feel sorry for people who got in financial trouble because of an illness and their health carrier refuses to pay, etc.... the rest should be prosecuded and not bailed out by the government.

I feel sorry for the ones who lost their jobs or sickness and they are wrapped up with all the ones that don't care and walk away because they aren't losing anything.

I know my nephew told me about someone he knew that was in a house they couldn't afford (they purchased too much house) so they went down the street and purchased a smaller home and walked away from the bigger one. Besides, if they didn't put anything down what did they lose? They still have a house that they own so who cares if they have a foreclosure on them.

It kills me that these mortgage companies give these people money, after money on a house but those of us who do right and put money down and have good credit, we have to document everything.

[bentlebee]

Originally Posted by Janipoo

I feel sorry for the ones who lost their jobs or sickness and they are wrapped up with all the ones that don't care and walk away because they aren't losing anything.

I know my nephew told me about someone he knew that was in a house they couldn't afford (they purchased too much house) so they went down the street and purchased a smaller home and walked away from the bigger one. Besides, if they didn't put anything down what did they lose? They still have a house that they own so who cares if they have a foreclosure on them.

It kills me that these mortgage companies give these people money, after money on a house but those of us who do right and put money down and have good credit, we have to document everything.

As an investor I got a question from someone to buy a foreclosed home for them so they could do a short sale or walk away even though they had made a down payment. The would rent it from me until they could get a new mortgage. I'm not going to invest in people who want to scam any one. The foreclosed house is bigger and they told me it was "just a better deal and more equity". They had asked another "friend" to take a 2nd mortgage on their home because they had good credit and than rent it back. That is why I search a little on the internet and found out that this was their 3rd foreclosure. It was so bizare to me, but if I wasn't asked for this I would never had guessed that people are just scam bags and selfish.

[Boomerang]

Originally Posted by Janipoo

I feel sorry for the ones who lost their jobs or sickness and they are wrapped up with all the ones that don't care and walk away because they aren't losing anything.

I know my nephew told me about someone he knew that was in a house they couldn't afford (they purchased too much house) so they went down the street and purchased a smaller home and walked away from the bigger one. Besides, if they didn't put anything down what did they lose? They still have a house that they own so who cares if they have a foreclosure on them.

It kills me that these mortgage companies give these people money, after money on a house but those of us who do right and put money down and have good credit, we have to document everything.

I agree with you --- there are people who truly need and deserve help, and then there are the rest who are immature, irresponsible, and egocentric.
The world apparently owes them a comfortable lifestyle whether they're willing to work for it or not. They'd better hope that they never have to exist without a mommy, daddy, or bank to support them - the world'll get ugly for them fast!