Walk Away from your Mortgage, it's the smart thing to do! (wage, insurance)
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I bought my house in 2006..paid almost 250,000 it is now worth about 189,000. I had thought of walking away and its not the right thing to do.
With that said I just do not want to move again! I hate moving. I will suffer for 60 more years.
$60,000 drop might not be worth foreclosing. The article cited homeowners who paid over a half a million for a home and it is now worth $179,000. If you factor in the interests rates, insurance, maintenance over 30 years, they will have paid at least $900,000 for a home that will probably be not be worth half of that. Financially this makes no sense. As someone stated, the contract states that if you don't make payments the bank forecloses on the property. No crime commited here.
FHA doesn't really care about credit, as long as you have a stable job. Wait 2 years and then apply for a 3% down loan. If the tax credit still exists (probably won't but you never know), just apply it towards the down payment. No down payment loan with destroyed credit. Ain't America grand?
I think it stinks to high heaven, but that's just the way it is. All loans should be non-recourse since the house is the collateral. If the bank doesn't feel quite right making the loan, well that's what PMI and a down payment are for.
There is absolutely no way in the world that you will get an FHA loan if you have a large open judgement on your credit. Are you in the mortgage industry? I was for 10 years up until 2008 when I left for obvious reasons. I'm sure things have changed since I left but I really doubt they have changed ot that extent. Please feel free to correct me and provide sources if I'm wrong.
It hasn't?. Why is it unethetical to walk away from your mortage, but not unethetical for banks to foreclose after refusing to modify or renegotiate mortgages
You signed a legally binding note. It is not the bank's fault that the economy and housing market tanked. They have absolutely no obligation whatsoever to modify any mortgage note.
If the banks have received close to a trillion dollars in bailout money from taxpayers, do they have a responsibility to try to avoid foreclosure and reach an agreement with the borrowers? Or was this a no strings attached bailout, funded by the public.
Quote:
Originally Posted by NewToCA
Oh please, the typical "give me a handout" line I repeatedly hear from the financially contemptible.
Willfully walking away from your home mortgage should result in significantly more financial penalties than currently dished out. However, with the current folks in charge, I suspect those despicable folks will be further rewarded, instead of financially penalized.
Exactly right- what would you rather see? Banks being bailed out or people standing in lines miles long for loaves of bread?
It hasn't?. Why is it unethetical to walk away from your mortage, but not unethetical for banks to foreclose after refusing to modify or renegotiate mortgages
Do you make this argument out of your own self interest only? That is, do you also think a bank should be able to renegotiate with you if interests raise and they had already signed a deal with you at a lower rate? Is it acceptable for them to walk in and demand a higher interest rate because they can make more money? Would you have no problems if you were making more money and they came in and wanted to renegotiate for higher payments because you could afford more?
Is that acceptable? I mean, if you think so, then I can at least understand your argument, but if you do not think so, then you are simply being one sided on the issue.
$60,000 drop might not be worth foreclosing. The article cited homeowners who paid over a half a million for a home and it is now worth $179,000. If you factor in the interests rates, insurance, maintenance over 30 years, they will have paid at least $900,000 for a home that will probably be not be worth half of that. Financially this makes no sense. As someone stated, the contract states that if you don't make payments the bank forecloses on the property. No crime commited here.
As long as it stays on your record for an extremely long time and destroys all possible credit availability for you in that long future. Then I have no problems with such as the next time you go for a loan, the bank will simply deny you and all businesses will view any relations with you as an extreme risk. As long as you would be ok with this, then you accept the consequences.
Though based on your previous reasoning, I doubt that is the case. You seem to want to be able to short change others, go back on your word, violate contracts, and act irresponsibly as it benefits you, but everyone else is to hold to their word when it concerns you.
That is extremely irresponsible and extremely immature.
As long as it stays on your record for an extremely long time and destroys all possible credit availability for you in that long future. Then I have no problems with such as the next time you go for a loan, the bank will simply deny you and all businesses will view any relations with you as an extreme risk. As long as you would be ok with this, then you accept the consequences.
Though based on your previous reasoning, I doubt that is the case. You seem to want to be able to short change others, go back on your word, violate contracts, and act irresponsibly as it benefits you, but everyone else is to hold to their word when it concerns you.
That is extremely irresponsible and extremely immature.
Call it what you will, many people are starting to realize that "walking away" from your home makes more financial sense. If you can find a way to maximize your financial security, who am I to stop you. I believe a foreclosure stays on your record for 7 years. Many homes will not reach their selling price in 7 years. Many homes are money pits and a smart investor knows when to pull out.
Do you make this argument out of your own self interest only? That is, do you also think a bank should be able to renegotiate with you if interests raise and they had already signed a deal with you at a lower rate? Is it acceptable for them to walk in and demand a higher interest rate because they can make more money? Would you have no problems if you were making more money and they came in and wanted to renegotiate for higher payments because you could afford more?
Is that acceptable? I mean, if you think so, then I can at least understand your argument, but if you do not think so, then you are simply being one sided on the issue.
Well, actually they do that. It is called adjustable rate mortgages. They usually start at a teaser rate. After couple of years, they hit you with a rate that is impossible for you to pay. One of the many reasons of the recent collapse.
Well, actually they do that. It is called adjustable rate mortgages. They usually start at a teaser rate. After couple of years, they hit you with a rate that is impossible for you to pay. One of the many reasons of the recent collapse.
One could almost get the impression that this whole housing colapse was a giant Ponzi scheme drummed up by the progressives to remove people from their biggest asset. Almost.
Call it what you will, many people are starting to realize that "walking away" from your home makes more financial sense. If you can find a way to maximize your financial security, who am I to stop you. I believe a foreclosure stays on your record for 7 years. Many homes will not reach their selling price in 7 years. Many homes are money pits and a smart investor knows when to pull out.
I was thinking about raising it to around 25 years would be more reasonable for actual records, and lifetime for requirement to disclose that you had previously foreclosed.
Also, maybe putting in a clause that allows them to garnish wages, seize assets for liquidation for up to 40% or more for recovery of losses.
It should hurt to walk away, it shouldn't be considered a strategy for financial security.
If we had more penalties for such actions, then maybe people wouldn't be so irresponsible in their decisions to enter such arrangements.
But hey, what do I know? I am just a person who didn't make such irresponsible decisions who has to help pay for those that did.
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I hate moving. I will suffer for 60 more years.
