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Ibut if they force Joe & Jane into bankruptcy, it may hurt other banks who hold other debt (credit, auto, other loans).
And Joe & Jane, who were on their way to living responsibly after their foreclosure are subjected to additional years of bad credit on their records.
No, it's entirely fair and accurate and need not result in further financial hardship (except that the foreclosed owner can't buy a big screen TV or new SUV or the 7 week cruise for a few years, booo hooo...) if the banks follow what was quoted in your article. And it makes sense - wait till the deadbeat, err, I mean unfortunete one is finanically stable again, then get um!
"... the judgments don't have to be obtained immediately. Lenders or collection agencies may wait until debtors have recovered financially before they swoop in. In Florida, the bank can wait up to five years to file. Once the court grants a judgment, the lender has 20 years there to collect, with interest."
I like it! Sure, walk away, we'll give you a few years...but, someday, it will be time to pay.
"Zaretsky had one client who was so relieved to have arranged a short sale that he signed every paper his real estate agent shoved at him, even a confession that clearly stated he still owed the debt."
When everything crashed, there were many stories of people in over their heads with mortgages who admitted signing paperwork without reading it. I wonder if these same people may be zapped on the way out of a short sale or foreclosure by signing confessions cleverly buried in a ton of paperwork.
"Zaretsky had one client who was so relieved to have arranged a short sale that he signed every paper his real estate agent shoved at him, even a confession that clearly stated he still owed the debt."
When everything crashed, there were many stories of people in over their heads with mortgages who admitted signing paperwork without reading it. I wonder if these same people may be zapped on the way out of a short sale or foreclosure by signing confessions cleverly buried in a ton of paperwork.
If you ever sit in a real estate closing, or many of them, and see people signing everything put in front of them without question, you will see how little cleverness it takes to bury paperwork.
I hate closings where the attorney doesn't explain every form, and where the signers don't care.
I would hope they do go after the clods that bought new SUV's, boats and quads with the equity they milked from the homes, but the people who lost their homes due to the sh....y economy should not be held liable.
If there was a way to differentiate between the two I'd be all for it. Sadly, there really isn't a way to tell who was irresponsible and who just ran into hard times.
If you ever sit in a real estate closing, or many of them, and see people signing everything put in front of them without question, you will see how little cleverness it takes to bury paperwork.
I hate closings where the attorney doesn't explain every form, and where the signers don't care.
I've always made it a point to tell people to tell me to stop and review something if they didn't understand it. Most people during the refi boom couldn't have cared less and just wanted to know when they could pick up their check.
How come we don't have people walking away in droves from their car loans? After all, these cars aren't worth what was paid for them the minute they are driven off the lot. This "isn't worth what I paid for it" thought process is a contrived excuse to walk away from debt and then because you walked away from what you agreed to pay, no on is supposed to come after you? Come on....grow up. Live within your means people.
It is because the United States Government beginning with the Clinton Administration, in their inimitable wisdom, thought that everyone should have the American Dream and thus told the banks they needed to find a way to make monies available to Americans who couldn't qualify for conventional loans. Voila! Subprime mortgages were created and sold like hotcakes. The real estate bubble grew. If that wasn't bad enough, Wall St. dreamed up financial instruments based on this scam that were sold all over the word called mortgage backed securities and conslidated debt obligations. Then when those who had no business buying homes in the first place but were able to with a subprime mortgage couldn't pay their mortgage, the whole thing came tumbling down.
If they had done something similar with car loans we would have people walking away from their car loans.
Now to add insult to injury, the Obama administration, after first robbing the taxpayers to bail out banks who were losing money as a result of getting involved of this scam, are WORSENING the situation by in another way giving the prospective homeowner (who otherwise wouldn't qualify for a conventional mortgage) and $8000 tax credit for buying a home.
What do you think is going to happen when the homebuyer starts having to pay their mortgage payment. A tax credit for one year isn't going to assist them with anything except getting them into a financial trap and nightmare that never should have been offered to them in the first place.
Add this to a rising unemployment rates and you have impending disaster which would have happened and been all overwith by now if anyone other than the Democrat or Republican candidate had been elected President. They all had more of a clue than the mainstream candidates did as far as what was good for the country and the taxpayers than the clowns we have in office now.
So thanks to mainstream polititians the banks get bailed out and as if that wasn't enough, (not to mention ADDITIONALLY that they get money from the Federal Reserve for 0 % interest only to turn around and charge us HUGE interest rates) they STILL go after the "poor homeowmer" that the Obama administration promised to protect. Who needs THAT kind of "protection".
Of course we need to live within our means and NOTborrow money for things that will depreciate like Cars and Homes. However, how stupid can we be to BELIEVE in these rediculous government programs that only benefit BANKS and HUGE CORPORATIONS?????
If we want "Change we can Believe in" we need elected officials who are TRUSTWORTHY and NOT con-artists who once in office will just continue to take advantage of the American taxpayer. That means NO MORE REPUBLICANS OR DEMOCRATS -- especially those who haveheled elected office for more than a year. We need to avoid putting career politicians in higher office. They only run for office for what they get out of it.
The problem is we need to realize that Government has been the CAUSE of all of our Country's ills and will never be the solution.
Look at any government program, and look how much higher the commodity is or service is once the government got involved. College educations are 20 times what they were in the late 70's but then there wasn't an abundance of government backed student loans. In the 1940's and 50's it took only a month's blue collar worker's salary to pay a year's college tuition. Certainly the quality of education hasn't improved by 20 times what it was in the 1970s. Rather it is that the GOVERNMENT is guaranteeing the schools will be paid and saddling the students with the redulous tuition plus interest!
The answer is to STOP GOVERMENT PROGRAMS. Drastically scale down taxes. SHRINK the size of government and put more money back in the hands of taxpayers and small businesses. STOP subsidies to mega corporations. Elected Officials need to STOP being influenced and paid off by mega corporation lobbyists. Simply let the free market work on its own. Also BRING OUR TROOPS HOME. End pre-emptive attacks (starting wars) in other countries that pose no real threat to us. If we did all this we'd truly have a rich country and something to be proud of!
Too much gray area to decide at this point if this is good or not. I find it hard that any lender (especially those that has PMI on a property) holding a foreclosed property will (in addition) be able to go after the ex-homeowner. That's double dipping, so to speak. If they're getting PMI reimbursed for foreclosed property, they got their money. Why come after the ex-homeowner? If I were the ex-homeowner AND I had been paying PMI to the lender, quite frankly I'd tell them I'll see you in court.
Furthermore, it's not necessarily the fault of said homeowner that the market tanked and the property's are not worth what it once was. If a house sells short, it is the market driving that factor, not one individual homeowner. Maybe, collectively, as a whole, but that's like saying the lender(s) would have to a class action lawsuit against ex-homeowners.
I believe in karma as much as the next guy, and the homeowners that strategically bailed (because their property is not worth as much) really irks me to no end. Job losses/economy/illness are viewed totally different in my book.
The banks took the risk - they didn't have to and they weren't forced to - people keep mentioning no one held a gun to the borrower's head, well no one held one to the banks head either - the bank prepared the documents for the borrower and chose to do so in a anything goes manner - the borrowers walking shouldn't be if they don't have to, but I suspect the banks will be just as idiotic about choosing which ones to chase as they were about choosing who to qualify - the ones totally strapped for $ that couldn't/didn't cross the t's dot the i's when foreclosing could be haunted forever.
The people that built second homes used so-called equity loans on there primary residence that are now retired in their free dream home (probably hidden in some co. name or llc.) and let the bank take their old primary residence will probably never be bothered - I hope I am wrong.... But, like I said, no one held a gun to banks head on that either...
On a certain level, when the little guy walks in and essentially puts the big guy in a strangle hold its hard not to chuckle for at least a moment.
For a real estate agent in IL, you sound stunningly out-of-touch. Do you think everyone in IL who's walking away from their homes are doing so because they bought a house beyond their means? I know plenty of people who bought homes before the boom. They didn't take "liar loans" or ARMs. They didn't accept loans 5 times their income. These were people who were responsible and "lived with their means". But when they lose their jobs and they're in a state with over 10% unemployment where you can't even get interviews, what are they supposed to do? I'm sick and tired of people like you characterizing every underwater homeowner as being irresponsible. I blame the folks in your line of work for telling people to buy the most house they can buy, for telling them their homes will always appreciate, and for lining up your in-house lenders who encourage people to accept loans they'll never be able to pay off even though the loan officer has a HUGE conflict of interest. If it were up to me, every state would be a no-recourse state. Why? So the banks can absorb the losses from the crisis they created. If they hadn't been bundling people's loans into derivatives and just stuck with doing commercial banking, we wouldn't have this mess. The banks created this crisis. Seems fitting that they pay the biggest price for it. The idea of banks who basically gambled with their customers' money then being able to go after those customers to make up for their (the bank's) mistakes is offensive. If any good has come out of this crisis, it's in showing how incompetent so many real estate agents are. Anyone can sell in a good market. A bad market separates those with talent from the wannabes.
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Thank you for saying this. There were a good many responsible people who accepted well-paying jobs in booming states where housing prices were sky-rocketing. The choice became either dive into the market or get priced out . For those of us who took the dive, intending to stay in our newly-adopted "boom" state, when the boom ended and the bust came, and then the lay-offs of the "last one in, first one out"....well, you can only make it for so many months when your income goes from 6 digits to nothing. And yes, many of those people had savings to stay afloat for a while but when nothing is selling in your area................no matter what price you place on the house...........sometimes there are no easy choices.
I have to look at the practices that were rampant in southwest Florida that daily are being revealed in the Herald-Tribune/and yes, I do blame a many real estate agents, appraisers, banks- There were shady practices propping up the market and I have no doubt that more people in the business were aware of it than will eventually be held accountable.
And if it appears that people who bought were foolish, you can blame it on years of prior experience with the "American Dream" so marketed in this country which consistently increased in value. As well as the assurance given to us that a good education and a strong work ethic and record assures you that when you are courted and hired for significant positions in thriving localities that your job will be there three years into the future and beyond.
So the "ha ha ha" mentality/"you guys finally got your payback for your actions", wow, that's pretty caustic. There were few winners in any of this/the effects of it will be with us for a long time. If you didn't get wiped out in the bust, consider yourself blessed and have a bit of compassion for those of us who did.
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