Posted on 03/03/2010 5:39:05 AM PST by EBH
To walk, or not to walk?
That is the question for nearly a quarter of US homeowners who can still make their mortgage payments but are “underwater,” or living in a house worth less than the amount they owe on the mortgage.
Should such homeowners with “negative equity” simply pack up and leave, mailing the house keys to their lender in a desperate act known as “jingle mail”?
Or should they honor the “promise to pay” in their loan contract and keep up with monthly payments, hoping for steady growth in home prices?
...But by and large, many “underwater” Americans need help to think through the difficult moral reasoning of whether to default – and to understand that society can only thrive on the integrity of each individual honoring a debt obligation.
(Excerpt) Read more at csmonitor.com ...
So are you coming to that conclusion because the TARP money was supposed to cover the losses and the banks got padded?
If so, then they should renegotiate ALL the underwater mortgages for the new appraisal values. No?
then...not them!
How can you renegotiate terms on a contract? They Loaned you a value at an interest rate and you agreed to it.
You don’t renegotiate a car loan once you drive it off the lot
It is a damned shame. No doubt of that. They have Barney Frank to thank for it, and guess what. Old Barney is still the HMFIC .
I completely understand your point of view. But if it becomes standard it does not bode well for the future of this country.
Anything can be negotiate but both sides have to agree.
No, I’m saying that any moral obligation, if one ever existed, ended at the time they accepted TARP
Why?
The banks took a risk at an appraised value. The house is their if they want it.
And you can’t fault the Bank if they don’t want to!
This stuff drives me insane. You buy a car for 30k on the lot and then want to give up the keys because it’s suddenly worth 20k after a week.
How is this any different than a house?
Seriously?
See post 51
I wouldn't enter into a contract with you because you are not a person of your word as you have proven in your posts. At the fist inkling of you getting a bad deal you would break the contract because it was bad for you. You wish to take no responsibility for your actions and poor decisions.
I bought a house I wanted to live in and raise a family in, not as an investment to turn over and make a profit on. Some but not all people have tried that and they got caught with the pants down when the market tanked and now want to just walk away...very sick indeed. Some but not all bankers/mortgage brokers used unethical marketing, immoral lending practices and the like to sucker people into loans they couldn't pay...even more sickness.
PS. I’ve got to run now. But, I look forward to your reply why the lendee’s moral obligation ended when the banks accepted TARP.
I posted this before, on another thread... but, once more in quicky fashion.
Back in the mid-80’s, near Houston.... I bought my first home in a “great deal” from my Brother-in-Law... we paid $43,500 for a house that appraised at $48,000. One year later, we couldn’t get an offer for $33,000. That’s how bad the market changed...
I lost my job, had to move half way across the country... but, I hired a management service to rent the house for me. I continued to pay my mortgage (at a net monthly loss) for nearly 10 years until prices recovered enough for us to sell the house without losing too much.
Meanwhile... I had close friends who took the “jingle mail” route. Despite all the horrible things I had always been told about foreclosures, these friends were buying NEW CARS (on credit) only 1 year later... and, in two cases, in less than 3 years... BOUGHT HOMES with mortgages in the same damn neighborhoods where they lived before... only at 40% reduced prices... They suffered FAR less than I did.
If I had it all to do over again.... I would send those keys back in a heart beat.
In fact.. I think, every state should make the laws clear: The banks ONLY recourse on failure to pay a home mortgage should be to reclaim the property. THAT will stop banks from making 100% loans and accepting fraudulent appraisals..
I screwed up judging the page turn. They didn’t take a risk on the appraised value. YOU DID! You promised to repay a value that they loaned YOU.
Your signature it your word or oath. Is your signature worth anything or just when you want it to mean something after the fact?
It's not... if you stop making payments on that car, they come and take it away from you.
My question is how does this improve one’s situation? I would think walking away from one’s mortgage would not improve one’s chances of getting a better one later.
Alot the purchasing decision of the buyer, in fact most, is because of the banks willingness to lend. If a bank is willing to take the risk of the loan then the property, in the buyers mind, (especially at 100%) must be near the appraised worth.
When the bank continues to lend money knowing that the value of the parcel is less than lending price, in hope that when the economic impact happens the gov. will save the day; and then the federal government does, No risk was taken by the bank. Thus, all risk was taken by the borrower, therefore the purchase of the home was based upon the expertise of those with no risk when lending at fair market value.
For the large banks it was all theoretical.. for the small guy it was all to real. Therefore, no morallity just legal.
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