Posted on 02/03/2010 7:05:10 AM PST by TigerLikesRooster
February 3, 2010
No Help in Sight, More Homeowners Walk Away
By DAVID STREITFELD
In 2006, Benjamin Koellmann bought a condominium in Miami Beach. By his calculation, it will be about the year 2025 before he can sell his modest home for what he paid. Or maybe 2040.
“People like me are beginning to feel like suckers,” Mr. Koellmann said. “Why not let it go in default and rent a better place for less?”
After three years of plunging real estate values, after the bailouts of the bankers and the revival of their million-dollar bonuses, after the Obama administration’s loan modification plan raised the expectations of many but satisfied only a few, a large group of distressed homeowners is wondering the same thing.
New research suggests that when a home’s value falls below 75 percent of the amount owed on the mortgage, the owner starts to think hard about walking away, even if he or she has the money to keep paying.
(Excerpt) Read more at nytimes.com ...
P!
Yep, however that is not a happy story either. Try getting credit at a reasonable interest rate after doing that.
Is everyone a victim to the Times? Are all the lending institutions evil and greedy?
Nope, but it was a systematic conspiracy from top to bottom, from GS to your local real estate agent, loan broker and builder, to extract as much in fees out of the flow of funds involved in forever leveraging up the total global real estate holdings. When valuations exceeded some large multiple of value and when then difference was borrowed from a banking system willing to lend it, there are no "innocent" parties except perhaps the young person starting out life who has a job and a family and just needs a place to live and has no control over what the masters of the universe have done.
Want a guilty party. Try Greenpsan who made the statement that it did not ever occur to him that executives would put their companies at risk by engaging in this kind of behavior, exactly while watching for a decade while they engaged in exactly this kind of bahavior. No, not one decade. Three decades. Just that after two decades of getting away with it they got really greedy.
Hey Benjamin, you are a financially illiterate moron for buying an overpriced condo at the peak of a the Housing bubble. That’s life.
In my opinion, I would agree with you for the individual who, through no part of his own, loses his job.
Otherwise, people have to be responsible for poor borrowing decisions. The fact that the money was available does not make taking it irresponsibly any more responsible.
I didn’t read far enough into the article to get to the part where they blame Bush, but since it’s the NYT, whatever they end up concluding is pure propaganda and decidedly irrelevant.
So when you owe more on your car than it’s worth, you just walk away. Let it be repossessed by the bank.
So much for your credit rating.
Where was it guaranteed that the house you bought would appreciate in value or even not go down in value?
NYT is shilling for the Barney Frank Cramdown plan again
Wait until this Bozo gets the tax bill after the bank dumps it in a short sale and then he gets charged a tax gain in the difference between his mortgage and what they sold it for.
This is killing localities. When these people bogue on their mortgage, they are likely also bogueing on the property taxes as well, and that puts small towns and County governments in dire straits.
Here it meant 44 layoffs in town, 20 more open positions that will go unfilled and a bunch more people who are being offered early retirement. That may sound good on the surface to some, but when the very real services that we expect our cities to provide start going away the problems will only mount.
We are seeing the beginnings of a completely new paradigm emerging that is going to fundamentally change the way we live and do business in this Country. We have so far outgrown our capacity to support ourselves in any that the change that is coming is going to be traumatic, and probably fatal for many.
Do you mean the way people who file bankruptcy start recieving regular credit card approvals a mere 3 months AFTER FILING a bankruptcy? (even before discharge)
This is no longer as big an issue as you think.
Its in the Constitution after free health care and cheap gas. Dude...read.
Why would you walk away solely based on what you think the house is worth? Look at your car, people.
I predict in 3 years, the Democrats will be screaming for banks to loan money to people with bad credit again.
Deflationary for sure...
“he gets charged a tax gain in the difference between his mortgage and what they sold it for.”
Mortgage value is irrelevant to tax value. If you bought it for $200k and they sold it for $125k, that’s a loss. It doesn’t how much you owe on it.
And I just remembered, the constitution also guarantees you the right to kill your baby in your womb and get the gummint to pay for it too.
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