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Old 02-29-08, 06:44 PM   #1
jonathanb715
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Sign of the apocalypse?

Check out this website:
You Walk Away

The old joke used to be that you didn't own your house - the bank did, and you just paid them rent. Now "home owners" are being encouraged to just walk away.....http://www.youtube.com/watch?v=seuwhZvXa6Y

JB
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Old 02-29-08, 08:19 PM   #2
7rider
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More detail from the NY Times:

http://www.nytimes.com/2008/02/29/us/29walks.html

I think this paragraph says why so many people are in trouble:

Quote:
Last year the median down payment on home purchases was 9 percent, down from 20 percent in 1989, according to a survey by the National Association of Realtors. Twenty-nine percent of buyers put no money down. For first-time home buyers, the median was 2 percent. And many borrowed more than the price of the home in order to cover closing costs.
All I can say is my monthly mortgage would pay for a pretty nice bike.
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Old 02-29-08, 09:55 PM   #3
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You must have a pretty wild house payment, because your bike list has some nice bikes on it
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Old 03-01-08, 12:24 PM   #4
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When ones home value is $150K less than the mortgage to be paid, I think it's worth the $995 to just walk away from the property. It's sad for the nearly 10 million people losing their homes, but it's better that the RE bubble burst and have housing prices come back down to earth.
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Old 03-01-08, 04:02 PM   #5
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Quote:
Originally Posted by 7rider View Post
More detail from the NY Times:

http://www.nytimes.com/2008/02/29/us/29walks.html

I think this paragraph says why so many people are in trouble:



All I can say is my monthly mortgage would pay for a pretty nice bike.
It's pretty sad. I read an article yesterday that said ~30% of people who bought a home in '06 are now upside down on their mortgage and 40% of those who bought in '07 are upside down. That's a lot of people
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Old 03-01-08, 06:10 PM   #6
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Originally Posted by mayukawa View Post
When ones home value is $150K less than the mortgage to be paid, I think it's worth the $995 to just walk away from the property. It's sad for the nearly 10 million people losing their homes, but it's better that the RE bubble burst and have housing prices come back down to earth.
For $995, the clients don't get much. Everything they're promised is already available. Even at the billing rate of a good attorney (say $250 per hour), it would be cheaper and more air-tight to use the attorney.

You want the bank to stop calling you about your late payments? Write them a letter saying please stop. By law, they have to. Want to stay in your house until the bank actually forecloses? Well, by law the bank can't do anything until they own it - and then they have to treat you as a tenant and go through eviction procedures (as much as 6 weeks). That's where the 8 months comes from (and notice they say "up to" - not much of a promise). They can't take the foreclosure off your credit report unless the bank did something they shouldn't have. So, the folks who are doing this really don't do much for their clients. IMHO. To me this is just another way for these folks to make some easy money off of the housing bubble (I'll bet they were realtors and mortgage brokers before doing this).


JB

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Old 03-01-08, 06:44 PM   #7
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Quote:
Originally Posted by mayukawa View Post
When ones home value is $150K less than the mortgage to be paid, I think it's worth the $995 to just walk away from the property. It's sad for the nearly 10 million people losing their homes, but it's better that the RE bubble burst and have housing prices come back down to earth.
Oh how wrong you are to think it's worth walking away from the property!
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Old 03-01-08, 08:33 PM   #8
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Oh how wrong you are to think it's worth walking away from the property!
+1.

It'll be on your credit report longer than a bankruptcy.

If people would contact their lenders (not the loan agent who brokered the mortgage, but the actual bank to whom they send their payments) before they miss payments, the banks may help. Some banks are renegotiating the terms of the mortgage; it's not unheard of for the banks to keep interest rates the same or lower than the rates to which they're adjusting. The trick is to be persistent and be proactive. Don't wait until you're in trouble to seek.

This market makes me sad; I hate that so many people are losing/have lost their homes. I'm a Realtor who loves helping people buy their dream home. One the other hand, I'm happy that prices are adjusting down, as this helps a number of first-time buyers purchase a home.

As always, caveat emptor.
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Old 03-07-08, 02:42 PM   #9
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Well, it's definite that those who walk away will have 7 years of bad credit, but when you're stuck with a such large negative equity and a ARM that has adjusted upwards of several percentage points (monthly payment going from say $1500/month to $6000/month), what are you supposed to do? You tell me that if you're stuck in the same circumstance you'll continue paying and still end up in foreclosure?
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