[jbravo]

Today there was a bailout of Bear Stearns and it's executives (bankruptcy would have meant that Christmas bonuses had to be returned.)
This past week there were multiple bailouts for the VERY wealthy in Wall Street.
In MHO the moral case that the individual homeowner underwater in his Fl home has the moral obligation to continue to pay a mortgage for a property whose value is LESS than what he/she owes is an argument that no longer has any merit.

The market will not turn around any time soon, the payments are unbearable and a recession/depression is coming.
If these properties were put quickly back on the market, then the banks would have to come to realty that much quicker, investor would buy them as rentals.
These rentals would have to be cheap because the glut of rental properties would further drive down rental prices.
Property taxes in all of FL would come down faster as prices returned to their pre-bubble 1997-1999.

A good asset like a house should not be vandalized by those leaving nor should the bank leave it to rot with mold.
In MHO, act civilized, do not trash the place, walk with your head high and admit that there was SOME complicity on YOUR part (it was not ALL the banks' fault.)
Please do not flame. This is only MHO.

[Jarndyce]

I think the reason not to walk away is that if you do...your credit rating will be shredded and you'll spend ATLEAST the next 7 years (more likely 10) trying to repair your financial image...

Good luck renting an apartment with a bottom-barrel credit rating.

[MrTudo]

Yes, integrity has become a scarcity in America. Freedoms and the way of life for millions of middle class people are being sucked out along with the equity of the country.

The percentages of people who do the right thing seem to be diminishing pretty fast with fewer and fewer taking responsibility for their own lives and actions. Heck. fewer and fewer seem to be able to define what it even means.

We certainly lost nearly 50% of the value of our home in Port Charlotte and yet we still have equity in it. But we've excercised a kind of financial dicipline that I guess one could say is "old fashioned".

Yeah.

[LeavingScotlandforFL]

I am disciplined with my money and I would like to think I would stick it out if I was underwater, a commitment is a commitment and a good credit rating is critical to my business life. But I guess until you are in that position with no end in sight, you never know.

However, the bail outs by the UK and US governments stink to high heaven IMO.
Corporations have lead the way in ridiculous risk taking, helping the consumer do the same. Now these corporations are feeling the pain, the Central Banks are doing whatever they can to bail out these shysters, at everyones expense.
Are we going to buy up EVERY bank that looks like going broke? Let them fail, and we will get out of the crap sooner than we will if we keep propping up the system, only delaying the inevitable collapse.

[Lilybeans]

Originally Posted by jbravo

In MHO the moral case that the individual homeowner underwater in his Fl home has the moral obligation to continue to pay a mortgage for a property whose value is LESS than what he/she owes is an argument that no longer has any merit.

Cars too? How about your credit cards? After all, what you bought on credit is no longer worth what you paid.

In fact, why not just use someone else's money to buy what you want,and when you don't think it's worth it, just don't pay for anything.

[Lilybeans]

Originally Posted by Jarndyce

I think the reason not to walk away is that if you do...your credit rating will be shredded and you'll spend ATLEAST the next 7 years (more likely 10) trying to repair your financial image...

Good luck renting an apartment with a bottom-barrel credit rating.

I think the reason not to walk away is because it IS YOUR HOUSE. You bought it. Where in the world does someone get the idea that just because you don't want it anymore you don't have to pay? I simply don't get it.

[jbravo]

Originally Posted by Jarndyce

I think the reason not to walk away is that if you do...your credit rating will be shredded and you'll spend ATLEAST the next 7 years (more likely 10) trying to repair your financial image...

Good luck renting an apartment with a bottom-barrel credit rating.

True.
But, in the situation that I am talking about that would happen anyways.
I think a better argument against walking away would be if the banks can get a judgement against the former homeowner. I have searched the internet and can not really find an answer to this. Is Fl a non-recourse state?
I do not know.

Originally Posted by MrTudo

Yes, integrity has become a scarcity in America. Freedoms and the way of life for millions of middle class people are being sucked out along with the equity of the country.

The percentages of people who do the right thing seem to be diminishing pretty fast with fewer and fewer taking responsibility for their own lives and actions. Heck. fewer and fewer seem to be able to define what it even means.

We certainly lost nearly 50% of the value of our home in Port Charlotte and yet we still have equity in it. But we've excercised a kind of financial dicipline that I guess one could say is "old fashioned".

Yeah.

What can I say? I agree with all said. I too was very conservative in my finances and came out OK. Sorry about Port Charlotte. Ooouch! I'm sure you made up for that elsewhere.

Originally Posted by LeavingScotlandforFL

I am disciplined with my money and I would like to think I would stick it out if I was underwater, a commitment is a commitment and a good credit rating is critical to my business life. But I guess until you are in that position with no end in sight, you never know.

However, the bail outs by the UK and US governments stink to high heaven IMO.
Corporations have lead the way in ridiculous risk taking, helping the consumer do the same. Now these corporations are feeling the pain, the Central Banks are doing whatever they can to bail out these shysters, at everyones expense.
Are we going to buy up EVERY bank that looks like going broke? Let them fail, and we will get out of the crap sooner than we will if we keep propping up the system, only delaying the inevitable collapse.

Sure stinks!

Originally Posted by Lilybeans

I think the reason not to walk away is because it IS YOUR HOUSE. You bought it. Where in the world does someone get the idea that just because you don't want it anymore you don't have to pay? I simply don't get it.

Guess that's the point: if Banks can walk away, why not homeowners?
The banks bought the bad debts, after creating them!
They thought they would continue to make a killing.
The CEOs were getting hundreds of millions $$$.
Now, they do not like the loans they made.
Shouldn't they pay?
Of course.
But they are not.

[heydade]

Florida is a recourse loan state and deficiency judgements can happen, although very rare. If you are going to walk away and you are rich....asset protection is the way to go. Put everything in property trusts, change phone numbers and do not disclose any information. As long as they cannot SERVE you papers in the future for the defiency judgement, legally....they cannot come after you. In summary though....."them" coming after "you" is a rare thing.....most people that foreclose are in a huge financial burden to begin with and banks realize this and do not go after the people for the differnce.

[Sunshine Chick]

I find it amazing to see people wanting to walk away from a loan they agreed to and signed because they failed to either read the contract, understand the contract or overburdened themselves from the get go.
The rest of us who are paying our mortgages and signed the contract same as you will in the end pay for those people who made mistakes of buying homes they could not afford to begin with and want to bail.
Now that the feds dropped rates a huge chunk today why are those who are on this bubble not running to the baks to do some refinancing?
I do not think people should be allowed to just walk away from a written and signed contract just because you do not want to pay it. If you have other issues that keep you from paying it, then that is difference, but to just walk away from it and stick the rest of us with higher rates later on to pay for your house is wrong.
I mean no harm to any individual, but what kind of message does this send to our kids and others, if you make a mistake just run away from it?
In the end, when I move to Florida I will pay for this happening by either higher rates for me or more for a house to make up for your loss the bank took.
I am not for the government bailing out people either, they knew what the house cost, they knew the payments were and they knew what the house was worth, so its the persons fault for making several mistakes and the rest of us taxpayers should not be paying for someones mistakes.
i want to move to Floirda and have my house for sale, if I do not sell it I cannot move to Floirda, but I am "not" going to just dump it so I can do something else.
Your credit will suffer big time from doing this and you will be lucky to be able to rent a clean decent apartment anywhere as 90% of all landlords are smart enough to pull credit apps on people.

[cfIfan]

I have to agree with alot that has been said here. For me, the notion of just walking away is ridiculous. As i tell my clients, buying a house is one of he biggest things you will do in your life. Its not something which should be entered into lightly. (Just like marriage......as my father inlaw told me on the eve of my wedding....lol). They were capable and intelligent enough to et into it, so they should work their way out of it. I put alot of blame on Banks and lending institutions for just issuing loans without due dilligence but i also believe their are also other categories out there. The people i genuinly feel for are the average joe who found themselves in this mess, but at least had the foresight to make provisions and were financially savvy like some of the other posters on here. I have no sympathy for investors and people who were completely ignorant. An example of which i was dealing with last week. about a year ago i was working with a couple and had spent about a month showing properties etc etc. I dont sign agreements personally because realtors have such a bad name and i dont want my clients to have any pressure on them etc etc. Anyway they decided to rent for a while, so i kept in touch by email. It turns out they bought one of the properties i showed them, and they decided to go through the listing agent as they promised them a rebate on the commission which i was mad about because of all the work i had done and i found the property for them. (This was obviously a bad realtor who i did report to NAR).

Anyway they contacted me last week because they now need to sell because the property was over priced to begin with and they need to sell as they cant afford it anymore. they had near perfect credit, and they got a mortgage at 12%, i was shocked and now they cant refi as their credit is shot. I valued the property and it lost over $100,000 on what they paid for it. I explained i couldnt take their listing because i cant sell it for what they need. They were ignorant because they didnt research the mortgage and thought by screwing over someone who had worked hard for them for the sake of $3000 they would get a better deal, and i even told them when i showed the property that it was over priced and we would need to negotiate the price. Now they are in a hole with no-end in sight.

It is a shame because whilst they had no sense of decensy, i really blame the other realtor who should have known better, and not only stole a client, but didnt even look after them properly and was only looking to line hos own pockets.

I also agree these institutions were quick to qualify everyone for these loans, so should grin and bear it, but im afraid that i believe people should work things out, after all they signed on the dotted line, they should take responsibility for it.