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Walking away from a mortgage might make sense
San Jose Mercury News ^ | September 26, 2010 | LINDSAY A. OWENS

Posted on 09/26/2010 7:41:50 AM PDT by Oldeconomybuyer

Millions of middle-income home- owners are struggling to pay down bloated, underwater mortgages while wealthier Americans are simply mailing in the keys to the mansion and calling it a day.

It's time for average Americans to start seeing their mortgage papers for what they are: records of financial transactions, not moral documents.

In a free-market society, an individual homeowner is not responsible for the strength of the nation's housing market. If anything, walkers may stimulate the economy, by spending a portion of the money they were sending to the banks each month.

Take a look at your finances and decide for yourself whether homeownership makes sense. A better decision for the future of your family may be to rent, pay off your credit cards, and put the savings in a college fund for your children or grandchildren.

Walk away from your house if it will be better for you to rent. And remember, walking away now doesn't mean that homeownership may not work for you later.

(Excerpt) Read more at mercurynews.com ...


TOPICS: Business/Economy; News/Current Events; Politics/Elections; US: California
KEYWORDS: 2manycrooks; crookedborrowers; failure; foreclosure; obamanomics; socialism
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To: oh8eleven
If you bought your house planning on living there for 15-30 years, you can live with the market fluctuation.

Unless you lost your job or your job required you to move. Guess those people are bums, though.

41 posted on 09/26/2010 8:22:06 AM PDT by Future Snake Eater ("Get out of the boat and walk on the water with us!”--Sen. Joe Biden)
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To: Future Snake Eater
Why don't you think about for a minute and see if you can use all those silly outdated concepts that "conservatives" allegedly espouse and see if you can come up with a logical conclusion.

That way, new connections in that walnut sized mass between your ears may be made, thus leading to a New Life of Enlightenment for you!

Ta-ta, I'm off with my cup of coffee, my kid and my wife to luxuriate in the beautiful view of the fog over Capitola out my front window, have a nice Sunday....

42 posted on 09/26/2010 8:24:45 AM PDT by Regulator (Watch Out! Americans are on the March! America Forever, Mexico Never!)
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To: Oldeconomybuyer

There are people who have defaulted on their mortgages, who are quite able to foot the bill but choose not to do so, in the full knowledge that banks are being very slow to foreclose and evict ... hey, more free money! Live rent free in a great house for a year or more! That the house has negative equity is a further perverse incentive.


43 posted on 09/26/2010 8:25:35 AM PDT by RegulatorCountry
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To: Wage Slave
Who’s going to rent to them?

If they are working and the foreclosure is the only black mark on their credit they will have no trouble finding rentals. In fact the investor who buys their foreclosed home would probably love to have them as tenents.

44 posted on 09/26/2010 8:25:48 AM PDT by mac_truck ( Aide toi et dieu t aidera)
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To: CapedConservative

Your wrong... Interest is paid to them for the risk they are accepting.


45 posted on 09/26/2010 8:26:26 AM PDT by babygene (Figures don't lie, but liars can figure...)
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To: M. Dodge Thomas

Yes, but (I’m a landlord too, but am new to it) if a prospective tenant is brave enough to start ignoring a big scary bank, what’s to keep him from ignoring me, a brand-new “small and meek” landlord?

I decided someone who just decides one day to NOT PAY THE MORTGAGE will just as easily decide one day to NOT PAY THE RENT.

So I went with someone else, with just as good a job, but safer and with great credit.

But you’re right; these two were *far* better than the next set of tenants that came behind them in my rankings. What a nightmare some people are. Someone actually wanted to move in with 8 dogs!


46 posted on 09/26/2010 8:26:30 AM PDT by olivia3boys
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To: Regulator

OK, so I was right. Those people are scumbags who deserve to be homeless, so long as they crawl past your front door so you can laugh at them, declaring your superiority over them.

That doesn’t strike me as particularly helpful, but to each his own.


47 posted on 09/26/2010 8:26:53 AM PDT by Future Snake Eater ("Get out of the boat and walk on the water with us!”--Sen. Joe Biden)
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To: BenLurkin

Morality in business? A contract has terms, including penalties. That’s called making a deal. If you incur penalties, you haven’t broken any moral code. You’ve incurred penalties that were part of the agreement. A bank knows their is risk of default in a mortgage loan. I am sure they charge enough to cover the risk. A person should do what is in their best interests, as long as it’s legal.


48 posted on 09/26/2010 8:27:48 AM PDT by Huck (Q: How can you tell a party is in the minority? A: They're complaining about the deficit.)
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To: Oldeconomybuyer
Also on the list of things that can make financial good sense and be lucrative are:

- Shoplifting

- Robbing a gas station

49 posted on 09/26/2010 8:28:16 AM PDT by FunkyZero ("It's not about duck hunting !")
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To: ICCtheWay

Ditto.


50 posted on 09/26/2010 8:29:52 AM PDT by Huck (Q: How can you tell a party is in the minority? A: They're complaining about the deficit.)
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To: Oldeconomybuyer

Ratigan was pushing this disgusting idea a couple of months ago.


51 posted on 09/26/2010 8:32:15 AM PDT by Carley (For those who fought for it, freedom has a flavor the protected will never know.)
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To: Regulator
All those refi's to the lower rates didn't hurt either. The other bozos used the rates to bump up their living standard, but....some of us used it to ensure that we could stay where we were.

True. My wife and I just now finally did our first refi. We shaved a couple points off our loan, and we'll continue to make the same payment we were making before. The house was appraised something like 80K above what we paid 8 years ago, and we haven't borrowed a dime against that unrealized , theoretical equity. And we love our home!

52 posted on 09/26/2010 8:32:16 AM PDT by Huck (Q: How can you tell a party is in the minority? A: They're complaining about the deficit.)
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To: FunkyZero

Except those are illegal acts, whereas walking away from a mortgage is not. Pretty significant difference, I would think.


53 posted on 09/26/2010 8:33:11 AM PDT by Huck (Q: How can you tell a party is in the minority? A: They're complaining about the deficit.)
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To: CapedConservative

Why do you think that the mortgage company considers your home as collateral and can repossess it if you can’t make the payments? A person has no control over what may happen in the future. You could lose your job, get in a disabilitating accident, etc. Get off your moral high horse. We have 25 million Americans looking for full time employment. 40 million are on food stamps.


54 posted on 09/26/2010 8:34:52 AM PDT by kabar
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To: anniegetyourgun

Immorality on parade. Promoted by the left as a way to ‘punish’ the banks who made loans.


55 posted on 09/26/2010 8:34:58 AM PDT by Carley (For those who fought for it, freedom has a flavor the protected will never know.)
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To: Farmer Dean
"How will walking away from your mortgage affect your credit score and ability to buy a home in the future?"

You signed a contract to borrow X dollars from the bank and pay it off over a period of time. If you "walk away" from that and don't pay the bank back, the bank will see to it that your credit rating will reflect that you don't pay your obligations. No one will loan you money for a very long time. You may even have a hard time renting an apartment like the genius author of this article says you should do.

56 posted on 09/26/2010 8:35:07 AM PDT by SW6906 (6 things you can't have too much of: sex, money, firewood, horsepower, guns and ammunition.)
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To: Huck
Morality in business? A contract has terms, including penalties. That’s called making a deal. If you incur penalties, you haven’t broken any moral code. You’ve incurred penalties that were part of the agreement. A bank knows their is risk of default in a mortgage loan. I am sure they charge enough to cover the risk. A person should do what is in their best interests, as long as it’s legal.

You're absolutely right. Usually, we're talking about legal and not moral obligations.

For just that reason, I won't lend money to home purchasers or people who want to refinance without requiring more than just signatures on notes, deeds of trust or mortgages. I insist that borrowers also sign a Covenant With God and pledge their Immortal Soul as part of the deal. If the borrower balks, then he's going home without any money. I have no sympathy for the banks or lenders who made their loans without the proper Covenant.

57 posted on 09/26/2010 8:35:33 AM PDT by Walts Ice Pick
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To: SW6906

Seven years, most likely. Ten max.


58 posted on 09/26/2010 8:36:50 AM PDT by RegulatorCountry
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To: Walts Ice Pick

lol...ah, the old Immortal Soul clause. Pretty iron-clad, I’m told.


59 posted on 09/26/2010 8:38:05 AM PDT by Huck (Q: How can you tell a party is in the minority? A: They're complaining about the deficit.)
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To: svcw

The average dummy is probably on the hook for 3 grand or more in mortgage. If they had 1500 in mortgage they’d ride it out.


60 posted on 09/26/2010 8:40:03 AM PDT by yldstrk (My heros have always been cowboys)
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