Anyone see 60 Minutes last night? (Lost, on tv, shows, house)
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They had a segment about people able to pay their mortgages but walking away from them anyway. Some young couple in Arizona are still living in their house without paying and feeling just dandy about it.
The couple is not struggling to pay; they just don't want to pay. Their attitude is why should they pay when the house is worth 43% less than they paid for it. They asked the bank for a mod and of course were told no since they did not suffer a job loss. The guy figures that socking away what they're not paying will enable them to buy another house outright in a few years. How nice for them.
There was another couple who bought a bungalow for over $400k and it's now valued at about $80k. The wife sat there very sincerely saying there was absolutely nothing wrong with walking away from it. "We're not villains," she said.
"But what about your neighbors' whose home will now lose value because you walked away?" "I'm sure they'll be upset," the husband said.
The other person interviewed bought a house for about $1.5 million that's now worth in the $800s. He said his conscience won't allow him to walk away but at some point he may find that he has to.
They asked the bank for a mod and of course were told no since they did not suffer a job loss.
You don't have to lose your job to qualify for a loan modification. In fact, losing your job almost guarantees that you won't get a mod. One component of the MHA program doesn't even require a reduction in income, just a loss in home value that prevents you from doing a conventional refi. They might have qualified for that program but perhaps for reasons not disclosed, they won't give it a shot (like perhaps they falsified their income on their original loan).
Yes, I did catch the segment. The people did lose a lot of value, but if everyone did what they are doing we will really be in a mess, not that we aren't already!
These people **** me off. The loss was ON PAPER!!!! They are ONLY going to realize that loss WHEN AND IF THEY SELL!!!! If you can afford the mortgage then walking away is a cowards way of "doing business". If everyone pulled out of the stock market if their stock values went down the market would crash and we would be in one h e l l of a fix that would not see the light of day for a LONG TIME! These people will still have to live somewhere and pay rent. Why not live in your own house and just wait for the market to turn around and go up if you want to sell and don't need to. Ruining your credit over this is NOT worth it. That young couple is just too dumb to realize that. They are going to be in WORSE shape than if they had just stayed put. They don't realize that with a MUCH lower credit rating they are going to have higher interest rates on everything they try to buy or apply for, insurance companies check your credit as do future employers. This could follow them for a VERY LONG TIME and be a PITA much moreso than staying in the house would have. Who cares if it went down in value........ you are not going to realize that until you sell.
You notice the smartest guy they talked to was the one with the most expensive house and more money than the others. Because he realizes if he did walk away just because he "lost money" on paper due to the house value going down he would STILL have to pay to live somewhere. Why not live in the house you like and love. Makes SOOOO much more sense. That young couple will NEVER get to the point of being as set as this guy nor do they have any hopes of ever attaining it if they act like they are. Forget running or owning a business with their attitudes. Their actions now are going to plague them forever.
That really bummed me out watching those folks last night. I guess I can see where they are coming from from a business sense but honestly it still reeks imo. Shoot, I lost my job a couple of months ago after being steadily employed for over 20 years and can I get a loan mod from Citi? Heck no. They wont give me the time of day. So, not only have I lost over a 100k in value on my home, I also get to spend almost my full months unemployment income on my mortgage and now that my savings has been wiped out I could walk away sure. But I don't know if I could live with myself for doing it. It must be nice to be able to walk away from your obligations and not give a rats arse about it.
I think it stinks too. The house will likely regain some or all of its value when the economy improves, which it is showing some signs of doing. It seems unethical to me (and certainly inconsiderate concerning the neighbors).
Maybe they were trying to get the attention of their mortgage companies by going on TV..I wouldn't do this (nor go on TV saying I would) as I get short term loans and pay them down fast with a lot of sacrifice on my part.
However, I do know a lot of this is going on in a neighborhood where a relative lives in California. The relative bought just before the bubble and put over $200K down on a $500K home - despite that, the house is now upside down...
These people **** me off. The loss was ON PAPER!!!! (Agreed) They are ONLY going to realize that loss WHEN AND IF THEY SELL!!!! (Agreed) If you can afford the mortgage then walking away is a cowards way of "doing business". If everyone pulled out of the stock market if their stock values went down the market would crash (Agreed) and we would be in one h e l l of a fix that would not see the light of day for a LONG TIME! These people will still have to live somewhere and pay rent. Why not live in your own house and just wait for the market to turn around and go up if you want to sell and don't need to (Agreed). Ruining your credit over this is NOT worth it (Agreed) . That young couple is just too dumb to realize that. They are going to be in WORSE shape than if they had just stayed put (Agreed) . They don't realize that with a MUCH lower credit rating they are going to have higher interest rates on everything they try to buy or apply for, insurance companies check your credit as do future employers. (Agreed) This could follow them for a VERY LONG TIME (Agreed) and be a PITA much moreso than staying in the house would have. Who cares if it went down in value........ you are not going to realize that until you sell.
Here we go again....
Totally agree with everything you said - I speak to people in all over the country and each has a different situation and reason why they go into trouble. If I person is going to walk away - this is the worst thing to do, because it will show a foreclosure on their credit report for up to 10 years. On top of that - the IRS will hit them will a 1099-C, for the difference what the property was sold for and what the homeowner owed......
Over the years I have worked with literally 1000's with bad credit - I can honestly say, almost everyone of them regretted making the decisions that got them their hardship....
If someone could look into a magic ball and see the future. That person would be the riches person in the world. Taking it to the next step - anyone working in Real Estate and Mortgages with more then 10 years, have seen downturns in the economy always to rebound...
I feel the beginning of the summer, the economy should pick up. Because schools out and people are spending money. Then remain flat because the fed isn't going to raise interests rates on June 15. In the fall, another jump because people will return to work.
I don't feel the economy will get good ago till possible next year (the third year of OBama's presidency). History shows the 1st and 2nd year of every presidency - we always go through a recession.....Here we go again....
These people **** me off. The loss was ON PAPER!!!! They are ONLY going to realize that loss WHEN AND IF THEY SELL!!!! If you can afford the mortgage then walking away is a cowards way of "doing business". If everyone pulled out of the stock market if their stock values went down the market would crash and we would be in one h e l l of a fix that would not see the light of day for a LONG TIME! These people will still have to live somewhere and pay rent. Why not live in your own house and just wait for the market to turn around and go up if you want to sell and don't need to. Ruining your credit over this is NOT worth it. That young couple is just too dumb to realize that. They are going to be in WORSE shape than if they had just stayed put. They don't realize that with a MUCH lower credit rating they are going to have higher interest rates on everything they try to buy or apply for, insurance companies check your credit as do future employers. This could follow them for a VERY LONG TIME and be a PITA much moreso than staying in the house would have. Who cares if it went down in value........ you are not going to realize that until you sell.
You notice the smartest guy they talked to was the one with the most expensive house and more money than the others. Because he realizes if he did walk away just because he "lost money" on paper due to the house value going down he would STILL have to pay to live somewhere. Why not live in the house you like and love. Makes SOOOO much more sense. That young couple will NEVER get to the point of being as set as this guy nor do they have any hopes of ever attaining it if they act like they are. Forget running or owning a business with their attitudes. Their actions now are going to plague them forever.
People keep saying it is a strategic move by the homeowner to walk away from the deal they made because it's to their benefit to do so.
What I wonder is how those same people would have felt had their home increased in value from let's say $150k to $300k and the bank came along and said "Hey, we're making a strategic move and taking this house back. We can sell it to someone else for $300k so we're breaking our contract with you."
There would be screams of bloody murder about how unfair that was and people would be waving their contracts yelling "Too bad for you."
I do feel for those who have lost jobs and think that banks should work with them in some temporary way-- perhaps lowering interest rates for a period until they can get back on their feet-- but these people in the story were fully able to pay but just choose not to.
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