As they should.

As they should.

#1 | Posted by rightisright

They did sign a contract. If everybody does this it could be a major problem.

The contract says what happens if they don't pay: the bank gets the house back. Therefore, both sides fulfilled the contract.

It would only be a breach of contract if they refused to pay, but refused to leave.

A failure to make payments under the note is an event of default, which constitutes a breach of contract. Just because the remedies are spelled out for the bank in the mortgage agreement doesn't mean the borrower didn't breach when they defaulted.

As they should.

More from the party of responsibility.

They did sign a contract. If everybody does this it could be a major problem.

#2 | Posted by jackass

Yes, they signed a contract and will be held accountable for breaking it. Sometimes you have to stop the bleeding. They'll be considered a poor credit risk for a number of years. The other side of this is, they could struggle for years and never get a decent return on the investment. The property will not be maintained and the value will go down further. Everyone involved will be better off if they walk away and rent for the next ten years, or until they have cash to work with.

It is amusing to watch the Jackasses and 726's of the world now as shills for big banks, not unlike the Dems in Washington.

When a bank makes loans, they factor in the risk of default. That affects the rate they charge, the amount of mortgage insurance they require, and so on. Moody's software couldn't even accept a negative number on real estate appreciation. Now that it's all blown up, they can't believe that people don't want to pony up 20 years worth of interest until they get back to breakeven. Or, that people aren't scrambling to cash in retirement savings to make the next balloon note, because not even banks are letting them refinance at the value that the loan is on the books for.

Before you criticize, suppose it were you, and you have a 3-year ARM. Or a 5-year. And in order to refinance, you have to come up with $145,000, cash. Or, walk away. What do you do?

#8 | Posted by rightisright

There are people here on the beach that purchased million dollar beach houses as rentals. They payed to much in the first place and the rental income lacks 15 - 25k a year of covering the payment when the rates went up. Most are in LLC's so they can let them go without as much impact on their credit as they would if it was their home. The smart thing to do is let it go.

As they should.

#1 | Posted by rightisright

I agree.

If everybody does this it could be a major problem.

#2 | Posted by jackass

perhaps you haven't noticed? It IS a major problem.

Interesting that the bank can change the rules of your "contract" with them but YOU can't.

Interesting that the bank can change the rules of your "contract" with them but YOU can't.

#12 | Posted by donnerboy

They can't, unless it's in the contract. Two pieces of advice from someone who's done this before. Buy title insurance even if you aren't required to and get to know your closing attorney.

Bush and Obama blew our money saving the bankers, but these poor schmucks are left out to dry. Not sure about the morality of it, but it's hard to blame them.

I believe that those who walk away will rent for the rest of their lives as no bank in the future would give them a mortgage. That's okay, ownership is not for everyone. I would also imagine car loans, credit card rates, etc., for them in the future will not be at favorable rates.

Actions have consequences.

It is amusing to watch the Jackasses and 726's of the world now as shills for big banks, not unlike the Dems in Washington.

I am amuzed with the RIR's of the world now shilling for a party to a contract to breach it because they are unhappy about it.

I could not fucking care less about the banks. Fuck them, but a contract is a contract. It was good enough for the retard in the article when he signed it. God help the stupid shits that want a fucking bailout every time they fuck up and buy at the high point of the market.

Actions have consequences. I guess in your world breach of contract is no big deal as long as it does not effect you personally.

I hope the dipshit does walk away, usually there are two remedies in a real estate contract, a personal gurantee and a mortgage. I hope they excercise the personal guarantee and make the dumbass go into bankruptcy.

Most are in LLC's so they can let them go without as much impact on their credit as they would if it was their home.

You would think the banks would stupid enough to loan a person a million dollars in an LLC without getting a personal guarantee on the loan and a mortgage on the borrowers primary residence?

Sure.

Before you criticize, suppose it were you, and you have a 3-year ARM. Or a 5-year. And in order to refinance, you have to come up with $145,000, cash.

That is not the point of the article. They can afford the monthly payments like they always have, they are just whining that they bought into the bubble.

Stirsumup

...Two pieces of advice from someone who's done this before. Buy title insurance even if you aren't required to and get to know your closing attorney.

I don't have a mortgage problem -- it's all paid up to date. But do have a serious question. Do I need a real estate attorney to look over any listing agreement solely on my own behalf -- as the seller?

Different realtors are telling me either "don't worry, our broker is an attorney so he can look over the listing agreement and other documents for you" or else the realtor's realty company has their own attorney on retainer and the realtors tell me "our own attorney (for Realty XYZ) can look it over for you."

Am I wrong in thinking there's a bit of a conflict of interest because they're ultimately looking out for the realtor's interest (more so just mine) even though the realtor hired would be working for me.

Any tips on what I, as the seller, should insist on being included in a listing agreement for the sale of a single-family home?

I've got realtors circling like sharks right now pushing to get a listing agreement so want to make sure I've covered my own butt (not just theirs) before signing anything. I know already not to sign a listing agreement with any realtor for more than 3 months at a time. Any other tips for me as the "seller"?

Why would I, as the seller, need title insurance? Or were you talking about buyers? I'm up to my neck in dealing in all new territory having never bought or sold a house before. I'm now in the process of selling my parents' home as I was named the successor trustee to handle it all after they passed away. The house is in the name of the Trust.

(more so just mine) = (more so than just mine)

Sure.

#17 | Posted by 726

The projected rental income and the property itself were the collateral. If the individuals involved had good credit the banks would send it through. It was a lot more common than you think. Don't take my word for it, talk to someone in the banking industry. Why do you think the bubble busting hurt the economy as bad as it did.

#19 | Posted by CalifChris

No, your not wrong. Get a closing attorney that represents you. Call a couple of title insurance companies and ask for recommendations in your area. They know the good ones, because the bad ones can cost them money. If you've never sold a home doing it yourself can be tough. It all depends on the individual. If your looking at walking away with a lot of cash, go through an agent. If your just breaking even and want to do it on the cheap, you can do it yourself, if you feel comfortable. And no' you don't need title insurance if your the seller. Hope this helps.

Don't take my word for it, talk to someone in the banking industry.

God they must have some real dumbshits working for these banks.

In my experience any bank loaning that much scratch to a liability limiting entity has always required personal guarantees and primary residences as collateral.

The projected rental income and the property itself were the collateral.

Waiting for the bankpologists to drop by and claim it is solely the borrowers fault on these kinds of deals.

The projected rental income and the property itself were the collateral.

Waiting for the bankpologists to drop by and claim it is solely the borrowers fault on these kinds of deals.

#24 | Posted by 726

The funny thing is, most of these houses rent for 5-8k a week in the summer and the banks pull them out of the rental programs and they sit empty all season.

Stirsumup

Get a closing attorney that represents you. Call a couple of title insurance companies and ask for recommendations in your area. They know the good ones, because the bad ones can cost them money. If you've never sold a home doing it yourself can be tough. It all depends on the individual.

This "individual" has been through the wringer enough already. A greedy, helped with practically nothing to get the house ready to sell, and litigious sibling [did I leave anything out of that description? lol] and her spouse -- both of whom have interferred with the running of the Trust from day one -- haven't helped matters. I think they resented me being named as the sole successor trustee (instead of them being included as co-trustees) and have proceeded to make my job as successor trustee a hell on Earth since I had to step into those shoes. They get 50% of the sale proceeds so, for my own protection until they are out of my life for good once this sale is over and done with, I want to make sure all the "i's" are dotted and the "t's" are crossed.

Question -- when you say "closing attorney" do you mean a real estate attorney who would also look at the listing agreement and take the sale from beginning to end for me, or just a lawyer who'd come in to look over the closing documents? (You can tell I'm new at this.)

And you suggest getting a recommendation for an attorney from a title company -- as opposed to getting a name of an attorney from an escrow?

If your just breaking even and want to do it on the cheap, you can do it yourself, if you feel comfortable.

Seems like every accountant, every realtor, every appraiser -- e v e r y b o d y -- knows a lawyer "who'd be perfect for you." I'm worn out in more ways than one. I'll call a couple of title companies now.

Good luck Chris. I'll be asking you for advice in a few years. My parents are getting up there and I'm going to be in the same position. Two sisters that just want, want, want.

My wife's a broker and my attorney has been a friend of mine since my divorce in 95'. That man has earned every dollar I've paid him. I can't tell you how much money he's saved me. Closings are trickier than you think. Buyers and sellers have lost a lot of money because the agent and the bank didn't fill out the papers correctly. It's the closing attorneys job to catch that. When you do close, get copies before you leave the office and go home and go through everything.

#7 | Posted by rightisright at 2010-02-03 01:17 PM

I am not a shill for the bank but I think people should pay their debts if they can. I am lenient for people that lose their jobs though. If you can't pay then there isn't much you can do but walk away.

That is not the point of the article. They can afford the monthly payments like they always have, they are just whining that they bought into the bubble.

#18 | Posted by 726
* * * *

So what. Most mortgages written in the past five years were adjustable rate mortgages. Which means that in a couple of years, they have to reset. And if you don't have enough equity in your home, you have to come up with enough cash to bring the LTV to 80% or less. And so in this case, it's about $145,000.

Would you do that? Would you raid your 401k to keep your mortgage going? Or just turn in the keys?

As they should.

#1 | Posted by rightisright

You left off the last part of the statement.

As they should be hauled off to debtors prison.

Contracts mean nothing to you leftist loons.

So what. Most mortgages written in the past five years were adjustable rate mortgages. Which means that in a couple of years, they have to reset. And if you don't have enough equity in your home, you have to come up with enough cash to bring the LTV to 80% or less. And so in this case, it's about $145,000.

Would you do that? Would you raid your 401k to keep your mortgage going? Or just turn in the keys?

#29 | Posted by rightisright at 2010-02-03 10:57 PM | Reply |

That's the pickle I'm in. I have a work contract till June 2011. My five year ARM ends Nov 2011 (I thought I was playing it perfectly. End contact. House on the Market for 6 months... Peace out. Live and learn). If I'm lucky I'll break even... IF.

Why would anyome pay 2 to 3 times what a house is worth in the first place? Lets face the facts and admit many people that bought high thought the trend was going to continue and they would make a killing. There was a killing allright.

7 | Posted by rightisright at 2010-02-03 01:17 PM

I am not a shill for the bank but I think people should pay their debts if they can. I am lenient for people that lose their jobs though. If you can't pay then there isn't much you can do but walk away.

#28 | Posted by jackass

Agree, this is a basic moral issue---"if you play, you should pay" as long as you have the means. This is where the rubber meets the road and defines who we are--issue of character.

As they should.

More from the party of responsibility.

#5 | Posted by 726

Sure. Lets just let them renege. Then you lefties can write another check to bailout the banks who are taking the bath. More from the Party of irresponsibility.

My probelm is more with the refinancers who took out money to buy toys from Fake equity. The market was at a bubble. These people need their toys taken away also.

You get a 30 year loan at 5% on $200k. You pay $1,074 per month without insurance and taxes. The house cost you $286,600. Does that make sense?

From $215,000 down to $90,000/ This kind of deflation is what occured during the depression. Some suckers will lose and other people who were more prudent with their finances will win. It's just like a monopoly game.

Well, it's been awhile since I've been called a "leftist loon".

Fwt, to call that deflation is to admit the house was realy worth $215k in the first place. The housing bubble was pure speculation just like the dot com bubble during slick willies administration.

Much of the forclosure problem is with the second and third that people took out in the form of a loan for OTHER things.

I still say that if you expected to make big bucks on your house you should be willing to pay if you loose the bet.

Being STUPID with money doesn't give you the right to my bank account to fix YOUR problem. If you are upside down, live with it. It was your choice.

"I still say that if you expected to make big bucks on your house you should be willing to pay if you loose the bet"

Unless, of course, you're the banker.

Unless, of course, you're the banker.

#40 | Posted by Danforth

Why is it their fault? The only thing I can pin on them was being over generous with Home Equity Loans.
The good banks still wouldn't give more than 47% of your gross income.

"Why is it their fault?"

You mean the guys who presumably went to business school and took risk classes, and who signed the transaction, knowing the borrowers would never be able to pay it off? Those guys?

But the house was worth 215k in the first place. Remember one of the first rules of markets: an asset is only worth what someone else is willing to pay for it.

Nobody's really answered my question: given how far the housing prices have fallen, would YOU take money out of your retirement plan, pay a penalty and income taxes on the withdrawal, to re-finance your house when the ARM had to be rolled over? Because that's the choice these people are having to make.

If you paid $215k for it, you are assuming someone else will pay you at least that much for it. Doesn't sound like a good assumption to me and it is an assumption.

I could pay $100k for a 5 year old pickup. Does that mean that I can get my money back or is the damn thing worth $10k?

Not just walk away,RUN baby...RUN. It `s not a moral issue...it`s survival issue.Let OBAMA takes care of it....

If this guy could still make the payments and walked away only because he wanted something cheaper, he just shot himself in the foot. BTW, that 215K value will be back up there a lot sooner than 2025.

The foreclosure side of my business relies heavily on the fact that most people don't want a foreclosure on their credit report. We come in and offer to stop that from happening while getting them out from underneath the burden.

Agree, this is a basic moral issue---"if you play, you should pay" as long as you have the means. This is where the rubber meets the road and defines who we are--issue of character.

What about the morals for the banks?

I don't feel obligated to behave "morally" when doing business with an amoral entity like a bank. That just gives the bank a huge edge.

"They did sign a contract. If everybody does this it could be a major problem."

If everyone did it the banks would be forced to renegotiate with people rather than taking a hard line. AKA - They'd be forced to do what is in everyone's best interest rather than continue the same short sighted, stupid decision making processes that created this mess.

A home... like anything... is only worth what the market will bear... and nothing more. I don't care what the original sales price was... or what the future may bring... The future sometimes brings earth quakes and tornados.. that destroy your "investment" and the insurance companies that backed your home loan... can refuse to engage in the financial circle jerk between lenders, real estate brokerages, and insurance companies can just tell you to fuck off.

A person upside down in a loan is better off walking. The best way is to let the bank know you are going to default so at least you do it with integrity. Document that you are defaulting with good reason if possible... that can assist you in the future. At the bottom line...contract law is about intent... and nothing more. Shit happens and sometimes you can't keep your agreement... or intentions... not the end of the world.

Law is just s a flexible theorem changing with times and cultural circumstance.

If you look at your cost to buy or rent in hard numbers... over the course of a life time... there is very little financial difference between renting and buying relative to what actually lands in your pocket... especially if you are like most people... a high leveraged borrower.

Even though real estate is touted as an investment most borrower/buyers are not in the position to have real estate be a money maker. It is just a hole where you pour your money. The major advantage is that you get to say what color your inside walls get to be... because most subdivisions have as many covenants as any rental agreement where you answer to a land lord.

Besides as long as there is eminent domain in the US... no one really owns a home... you just dress up like you do... pay taxes.. spend money to feed the worlds largest retailer... Home Depot... think orange thoughts...

I could pay $100k for a 5 year old pickup. Does that mean that I can get my money back or is the damn thing worth $10k?

#44 | Posted by Sniper
* * * *

Maybe not, but a bank would never let you borrow the money to do it. Suppose you borrowed money for the car, but lost your job. The bank would take back your car in repossession. That's the way it works.

Sniper let me just ask you, what would you do in this situation, here in the article? Amount borrowed is $215,000, collateral is now worth $90,000. You still have to pay mortgage insurance on the full amount. But now your ARM is about to expire, and in order to rollover the note you need to either pay it off at $215k, or write a check to give you 20% equity in the 90k, which is about $140,000. But wait--if you're taking that money out of a retirement plan, there are penalties and taxes that apply to the withdrawal, so you'll actually have to take out $200k, JUST SO YOU CAN BORROW MORE MORTGAGE MONEY.

Or, would you let your bank take it? That's in the contract.

rig, you are right, no one really owns a home. Just skip paying taxes on it for a couple years and shazam, its gone.

I do disagree with you on walking when you are upside down. If you bought something for far more that its worth, your bad. If you make big bucks on your sale, do I benifit? If you walk, I pay!!! What a fucking deal.

If you make big bucks on your sale, do I benifit?If you walk, I pay!!!

Ermmmm... file that under the "life isn't fair" category. The fact is most people if you add up the dollar per dollar spending do notwalk away with a windfall... annnnnnd....besides... you don't pay any more than you agreed to so I don't know where you get the "I pay" thingie.

If you mean it is harder for you to get a loan... is how you are punished... well that is arbitrary... and if such things bug you don't borrow... pay cash.. like you do in Mexico.

Real estate is like everything else... timing is everything.. and sometimes you get it right...

Or, would you let your bank take it? That's in the contract.

That's what I would do. Then I'd offer to buy it from the bank for today's value plus a few percent.

A home is an investment, and a mortgage is an investment for a bank. Turns out both investments didn't work out. There's no reason the homeowners should be the only ones left holding the bag as this bubble deflates.

A person upside down in a loan is better off walking. The best way is to let the bank know you are going to default so at least you do it with integrity. Document that you are defaulting with good reason if possible... that can assist you in the future. At the bottom line...contract law is about intent... and nothing more. Shit happens and sometimes you can't keep your agreement... or intentions... not the end of the world.

#49 | Posted by RightisTrite at 2010-02-04 01:01 PM | Reply | Flag:

Worst advice ever!

Sorry, but just because you're simply 'upside down' is no reason in itself to walk away.

If you can't afford it and you're upside down, then MAYBE....maybe, but not just because your house is worth less than you owe.

If you don't need to move to a different location and can make the payments, stay with the house. It's value will go back up and a foreclosure will be a real detriment to getting another home anytime soon.

I've heard lenders are bending over backwards to re-do deals. They're in the loan business, not the Reality business.

Waiting for the bankpologists to drop by and claim it is solely the borrowers fault on these kinds of deals.

#24 | Posted by 726

Uh, yeah it is the borrowers fault. Most of the people having problems are the ones that chose no interest products, or overextended, or overpaid, because they only looked at their payment. The bubble had everything to do with a bunch of stupid consumers rushing into buying property because of low rates, or wanting to take shovelfuls of cash out of their house.

I dont like the bankers either because their products were garbage anyway. Where the govt screwed up is when they propped up the lending system so people could go further into debt.

This forces the loss onto the Bank's books where is usually belongs.

But there is another path. Let them proceed with foreclosure proceeding and see if they can produce a Warranty or Quit Claim Deed in Court. Without it they cannot legally foreclose. 60% of outstanding mortgages are recorded in your county with an internet company linked to bundled securities. No one has clue who actually holds title with these bundled securities. If you have a mortgage, you can figure this out quickly yourself just by visiting the County Recorders office where you live. If you say nothing they will take the house, if you demand the documentation, which they don't actually have anymore because of securitization, they cannot foreclose. The Judge is legally bound to throw their case out. This is happening with increasing frequency for those in the know. Naturally it is being kept out of major media.

Hm, 7 years of bankrupcty vs. 30/40 years to value?

Don't walk...RUN!!

Being STUPID with money doesn't give you the right to my bank account to fix YOUR problem. If you are upside down, live with it. It was your choice.

#39 | Posted by Sniper

But this is exactly what the banks (a Corporation) did so why is it so different when an actual person does it? Why does it then become morally wrong?

Hm, 7 years of bankrupcty vs. 30/40 years to value?

Don't walk...RUN!!

#58 | Posted by tygersilver at 2010-02-04 02:58 PM | Reply | Flag:

Where are you coming up with "30/40 years" for the values to return?

Hm, 7 years of bankrupcty vs. 30/40 years to value?

Don't walk...RUN!!

#58 | Posted by tygersilver at 2010-02-04 02:58 PM | Reply | Flag:

Foreclosure is NOT a bankruptcy.....and bankruptcy can stay with you for up to 10 years

Not that you can't gat a credit card or buy a house with a Bankruptcy or Foreclosure, but you'll be raped with the terms.

Waiting for the bankpologists to drop by and claim it is solely the borrowers fault on these kinds of deals

How is blaming unimformed and greedy people who freely signed Adjust rate mortgages apologizing for banks??????

In many cases mortgage brokers and not banks sold the mortgages. Just because one blames people for getting themselves into a ARM doesn't mean banks are not to blame too.

Grow up.

"Most of the people having problems are the ones that chose no interest products, or overextended, or overpaid, because they only looked at their payment. The bubble had everything to do with a bunch of stupid consumers rushing into buying property because of low rates, or wanting to take shovelfuls of cash out of their house."

That's true.

But the banks were tripping over each other trying to lend to people like this. The low rates offered on no-doc loans were ridiculous. And they approved KOSI loans based on the min payment for thousands of people who were guaranteed foreclosures in those loans.

So who is more at fault - The idiot trying to get money they can't pay back or the idiot who knowingly lends to such people? I tend to think the latter.

"So who is more at fault - The idiot trying to get money they can't pay back or the idiot who knowingly lends to such people? I tend to think the latter."

My vote is the former as the latter can turn around and sell the bad debt to Fannie and Freddie. Thereby achiving a return at virtually zero risk while the poor stupid schlump that couldn't afford to borrow it gets poked in the curly hairs.

I completely agree with RiR for a change. Walk away. A contract is just a goddamned piece of paper anyway. And a house is never worth losing your livelihood over.

Its a business decision. Its much easier to handle the fallout from a default than to be $100+k upside-down with a resetting ARM. You're never going to break even on that. Besides, the bank isn't losing anything anyway. They are losing potential interest earnings on capital that didn't even exist prior to the house being mortgaged anyway. In the end, they walk away with a tangible piece of property with at least some real value, and you walk away fucked. The deal was arranged that way, so it certainly helps nothing to feel sorry for the banks.

Can't pay? Hand over the keys. It was part of the deal anyway. Its also useful to consider the fact that "affordability" is not a short-term, "I can pay my mortgage this month" idea. For things like a home, it is a long-term strategy. If it adversely impacts your retirement or your overall financial outlook into the future, you can't afford it, even if you can keep up with the payments.

you don't pay any more than you agreed to so I don't know where you get the "I pay" thingie.

#52 | Posted by RightisTrite

What do you call the taxpayer bailout of the banks that have gone tits up? That's called "I pay" thingie.

Sniper let me just ask you, what would you do in this situation, here in the article? Amount borrowed is $215,000, collateral is now worth $90,000.

#50 | Posted by rightisright

I would never have suckered into that in the first place.

W will tell you what I just did. I paid $93k for a house that sold new for $185k in 05. You see, it's a buyers market. Comparable houses are renting for $875/month in the area right now now.

Foreclosure is NOT a bankruptcy.....and bankruptcy can stay with you for up to 10 years

Not that you can't gat a credit card or buy a house with a Bankruptcy or Foreclosure, but you'll be raped with the terms.

#61 | Posted by COMMONSENSE at 2010-02-04 03:24 PM | Reply | Flag: Flag: (Choose)
FunnyNewsworthyOffensiveAbusiv
e

Duh, the bankruptcy is to get rid of the debt!

Even people with great credit can't get loans now!

The market is STILL declining, it's simple...these properties won't come close to purchase price for a VERY LONG TIME, that also means; no equity, no chance of selling, no refinance potential...do the math! 7-10 years with a bankruptcy or wait for the value to recover while your neighbor bought the same unit for less than half the price? What kind of credit do you think they will get with this monster of a debt on their reports?

Again, don't walk away...RUN!!

Agree, this is a basic moral issue---"if you play, you should pay" as long as you have the means. This is where the rubber meets the road and defines who we are--issue of character.

What about the morals for the banks?

I don't feel obligated to behave "morally" when doing business with an amoral entity like a bank. That just gives the bank a huge edge.

#47 | Posted by snoofy

Just responsible for how I live my life and not the bankers--by the way the ultimate problem wasn't the bankers---if the bad loans weren't made in the first place by mortgage lenders and people that lied about their incomes and fannie mae okaying most of these loans, you never would have had the derivative issue by the investment banks---so it's a little disingenuous to put it entirely on those "evil bankers". Also, I would throw in government that didn't regulate and actually encouraged this mess through the community reinvestment act with the help of Acorn.

Thank you for making my point Matsop. If Acorn and FNMA and whoever else you (erroneously) ascribe blame for the bubble acted immorally, why the fuck should a homeowner?

Duh, the bankruptcy is to get rid of the debt!

Even people with great credit can't get loans now!

The market is STILL declining, it's simple...these properties won't come close to purchase price for a VERY LONG TIME, that also means; no equity, no chance of selling, no refinance potential...do the math! 7-10 years with a bankruptcy or wait for the value to recover while your neighbor bought the same unit for less than half the price? What kind of credit do you think they will get with this monster of a debt on their reports?

Again, don't walk away...RUN!!

#68 | Posted by tygersilver at 2010-02-04 06:36 PM | Reply | Flag:

If someone has 'Great Credit' they can most certainly get a loan.

The values aren't tumbling like they were. Depends on the area.

Telling people who have no need to sell and can still afford there mortgage to 'RUN away' is absolutely absurd.

Maybe Tigers Liver makes his living off buying foreclosed property. That's where the next wave of first time millionaires is going to come from.

The market is STILL declining, it's simple...these properties won't come close to purchase price for a VERY LONG TIME

"Properties," you mean the real estate, or the tranches?

"if the bad loans weren't made in the first place by mortgage lenders and people that lied about their incomes"

That's not a valid point for 99% of bad loans. The banks designed the loan programs and set their underwriting standards. They send reps to the brokers pushing the programs on a weekly basis. Mortgage brokers can only sell according to the banks' guidelines. There is no evidence of widespread fraud because fraud wasn't necessary in order to get ridiculous loans approved. The banks lowered their standards and the brokers sold according to those standards.

The banks should have never made the loans in the first place just like the government should have never got involved in the first place. They have no business bailing any business out and they have no business telling lenders who they have to give loans to.

If someone has 'Great Credit' they can most certainly get a loan.

The values aren't tumbling like they were. Depends on the area.

Telling people who have no need to sell and can still afford there mortgage to 'RUN away' is absolutely absurd.

#71 | Posted by COMMONSENSE at 2010-02-05 04:33 AM | Reply | Flag

Where exactly in LALA land are you living? Loans take months to be approved now and "suddenly" mort. companies. and banks are looking at actual value.

Who do we believe about the market recovering? The same experts that suppressed 800,000 lost jobs in an effort to make things look better than they really are and prevent panic?

I understand it must scare you that if others walk your value will continue to decline but let's be honest about what it means to be enslaved to an overwhelming debt.

Credit card companies have convinced every one that cash is dirty and awkward, promised frequent flier miles and enticements and now SLAMMED everyone with triple and quadrupled interest rates, (even those with 750 FICO scores!) suddenly it's going to take years longer (if ever) to pay down debt that seemed manageable a few years ago. Combine that with the fact that many of those who lost jobs had to use that credit to survive and will forced to take jobs that pay less with fewer benefits and we are just waiting for all that unsecured burden to hit bankruptcy court.

I'm 45, my parents and my education taught me to expect 25 years for my primary residence to become profitable. I bought my first house 15 years ago and even then my real estate agent tried to convince me to TRIPLE what I knew I could afford. Thankfully my Uncle is a mortgage banker and based on his counsel and what I had been taught I kept my limit. Primary residence real estate was rarely a great investment.

Enter the age of the "Flippers"...
Buy a basic house; slap a few thousand in renovations and presto! 20 to 50k (or more) in value! We had entire TV channels devoted to flip and grow rich, deals closed in 3 days, easy loans because the buyer was going to flip it again anyway, agents, appraisers, inspectors, closing attys. EVERYONE raking in profits!! Bubble is inadequate this was an EXPLOSION!! This was rampant in cities and suburbs all over the nation.

The guys at the top made OBSCENE profit knowing full well all the madness could not sustain. And now they OWN you, serf, and slave, bought and paid for you are OWNED for the rest of your life!! There is no moral reason to honor a contract made in bad faith or with the intention to create an agreement that is unreasonable, predatory, exploitive, and just plain unfair.

This was all a big con game, the American Dream was just that, and now we wake up to the Nightmare.

Please explain how anyone so upside down can EVER dig out...

Aren't some of you the same people who have been parroting "free market" for months?

Here is your "free market" at work!! No controls, no regulation, just greed and unfettered capitilism raping the people!!

Is that "invisible hand" still stroking you under the desk?