Posted on 05/31/2011 7:14:56 PM PDT by vmpolesov
Reporting from North Las Vegas, Nev.— Charles Mills can barely afford to stay here. But he also can't afford to move.
That's why the 44-year-old heavy-equipment operator was preparing to leave his wife and young daughter here and go where he could find work — the Oklahoma oil fields. Mills has a mortgage to pay, even if its size pains him.
He purchased his house in 2006 for $308,500. Current value: $105,797.
"We talked about it: What can we do with the house?" Mills said. "Nobody's going to buy it. Nobody's going to rent it. If we walk away, my credit's shot. We're stuck."
(Excerpt) Read more at latimes.com ...
I know folks with a 4,000 sq ft house who cant afford the air conditioning and property taxes.
They wont run the AC till like 10 at night. It’s over 100 deg in there. in summer
He works OT all the time to pay the bills.
I live in a 1500 sq ft that will be paid in Aug on a 10 year note.
I run the AC with the windows open when I feel like it, just to piss Obama off.
Folks who bought McMansions are going to be screwed for a while
“If I file bankruptcy, it may sting, but that only lasts 7 years.”
Legally, bankruptcy only lasts 7 years but there are plenty (most, all) credit instrument questionaires which pose the question: “Have you ever filed for bankruptcy?”
Remember, “ever” means forever.
My husband and I lived in Las Vegas. In 2005-6 a friend of ours wanted to buy a house. My husband was in real estate years ago. We both saw the writing on the wall. This was confirmed by talking with a Realtor who said an Asian client wanted all his properties sold ASAP at whatever price she could get. My husband told his friend that he should wait till the prices start coming down, rather than buy while they’re on the up swing. He bought and ended up having to short sell. Luckily for him he sold before the foreclosure crisis was full blown.
We’re moving back to Las Vegas this summer and will be renting. The Realtors say, “this property won’t last.” We just laugh. We’ve been gone a year. When my husband was there in Feb., he said I wouldn’t believe it, how even more deserted it was and not much traffic on the freeway.
Good luck trying to get a job to start that new life, when you have a black mark on your credit.
I handle a lot of consumer bankrupties and the going rate here in SW MO is $1200 plus the filing fee, which is $299. The 2005 bankruptcy law mainly added a lot of extra paperwork for debtors and attorneys. The types of abuses that that law was supposed to end could have been addressed under the old code by better enforcement by the US Trustee program.
A mortgage is a business deal. There is nothing sacrosanct about it. If the equity was rising and the homeowner lost the ability to pay and the bank took the property back, reaping all the benefit, would anyone say that wasn’t fair? Of course not. They would simply say that was the risk inherent in the deal and buyer should have known and accepted it. It is the same thing in reverse. It is not good or bad it is just business.
Furthermore, businesses/companies default all the time on deals which become unprofitable. As shareholders we demand they do so to protect the company and the stock price. People need to lighten up on strategic defaulters. By giving up the property that was the subject of the mortgage they have fully performed the contract. The banks made poor judgment in making the deal and should not be protected or bailed out for doing so.
Typical government crap. Instead of enforcing the existing laws, their solution is to create a whole bunch of new laws.
What’s really sad is to be in your 50’s and 60’s facing foreclosure and knowing you may never again be able to buy a house if you walk away or the actual foreclosure takes place. That’s one thing that keeps us in our house. Fortunately, we bought it before the housing bubble and have a decent interest rate.
Banks made these loans without recourse, which is a stupid decision on their part. You can morally take advantage of their stupidity; Banks are supposed to be intelligent investors, and they failed.
If every under-water homeowner walked away, guess how fast mortgage contracts would be re-written to have recourse against the homeowner’s future income? A couple of weeks.
Needs to cut his losses and file for bankruptcy.
Holding on is only prolonging the pain.
Renting is not the end of the world.
The bankruptcy laws exist for a reason. One purpose of these laws is to shift some of the responsibility for non-payment to lenders who make unnecessarily risky loans.
The interest paid on loans needs to include a portion to cover the possibility that some loans will not be repaid.
Lenders who receive government money to make loans and who face no risk themselves are a serious problem for our economy. If it was the lenders facing the losses now they would be bending over backward to help their borrowers stay in their homes and make the payments.
I don't deny that there are plenty of people who are irresponsible. Government policies have encouraged and rewarded such irresponsibility for some time.
YES!!
I understand that there are two (or more) sides to the story. This house is tearing his family apart. And to protect.. what, exactly ? If the place is so expensive, then some other sort of housing should be found. With the whole family.
But all I see being salvaged here is his credit rating. He’s put it above a whole and stable family unit. Giving his kids a father. An opportunity to teach between right and wrong.
I’ve had plenty of opportunity to sell my soul for a few bucks. And isn’t this the decision that mothers must face as to whether they should work, or be at home ? Is it worth the money to leave the kids without parents for more than half the day ? Is there a price there ?
The bank wrote it off...after all, they got someone to pay the 202k...it kills my credit for 2 or 3 years.
But, I was able to take it off my back.
Your attitude is wise - I very much wish you luck - and also the family in this article.
I disagree with many commentators on this thread. If there is a burst of monetary inflation - history says this is likely - then all of a sudden your debts are worth much less and your property value is more secure. So who knows what the future holds?
People who are walking away now, might regret it in two years, just as much as the people who bought during the boom.
The issue for them is all about a lack of work. I doubt the home has a high interest rate and the mortgage is probably fairly low.
Yeah he’d like to make payments on $105,000 but had he seen his house go to $660,000 we would never have heard of these people.
Isn’t recourse determined by state law?
The problem with taking such a flippant attitude towards credit is that it isn't just needed for borrowing. Getting your next job might depend on your credit. Many employers now consider credit scores when hiring people. Many people who are unemployed and had their credit wrecked are running into more trouble getting work because of this, and that was not even their fault.
Why willingly put yourself in that boat?
Yup... bankruptcy is the financial equivalent of genital herpes. Try not to get it unless you really have no other choice.
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