Homeowners walk away
March 3rd, 2008, 12:26 pm · 5 Comments · posted by mistywilliams
A growing number of homeowners, even those still able to make payments, are abandoning their homes to foreclosure.
The reason: many borrowers now owe more to lenders than what their homes are worth. Some industry professionals I’ve spoken with say it might be easier for people to walk away since so many other distressed homeowners are going through the same thing.
The stigma of foreclosure is much less than in 2005, when people would have thought you were just not living up to your obligations, local loan officer Carolyn Drake said.
“People have been given permission to walk and not have the guilty feelings,” Drake said. “It’s not their fault. It’s the broker’s fault or the banker’s fault.”
A few years from now, it won’t be as big of a deal, she said. Lenders will look at credit histories and say, “I can see you got caught in that really bad mortgage crisis.”
Loan officer Jill Hoogendyk also said she could envision credit explanation letters referring to the crisis and the bad decisions people made. For some homeowners, it’s either walk away or not be able to feed the children, Hoogendyk said. Protecting your credit is almost a luxury, she said.
“You can recover from (foreclosure),” she said. “It doesn’t ruin your whole life.”
March 3rd, 2008 at 3:50 pm
It’s not the lenders fault..The borrowers went to the lender and asked for the money and then they signed the morgage. No one made them do it. If they didn’t read the fine print that is there fault.
March 3rd, 2008 at 7:16 pm
“A few years from now, it won’t be as big a deal..”?? Just walking away from a 400,000 loan is no big deal? You call this reporting? So am I to assume a bank won’t look at this the next time they want a home or car loan? Am I to assume they will be given the same interest rate for the loan as someone who never defaulted?
“It’s not their fault”? Who signed the load then? Santa Clause? Since when is a loan officer qualified to make such statements? Think the President of Wells Fargo thinks its no big deal to stop making payments on their loan? How ignorant.
March 3rd, 2008 at 9:03 pm
It is people like Jill Hoogedyk and their attitudes that have put this country into the financial situation we are in today. “It’s everybody else’s fault not me.” Just walk away from your home, your kids, your car, your spouse, when ever it gets tough. When people in this country start facing their responsibilities the country will become strong again. Living beyond your means and trying to keep up with your neighbor is a real problem. Yes, easy credit and the high interest credit cards are partly to blame. The same reason casinos want you to use chips or credit points is they don’t want you to think of loosing money. The banks want you to drop the credit card instead of money, so that you can fall behind and then have the big interest kick in. Buy it now and pay later. “Free money”. Wake up America, you don’t deserve every gadget you want. Your parents took years to get what they have. Todays attitude is I deserve it and if I can’t pay for it later I’ll just walk away from the obligation, after all they shouldn’t have let me have that much credit or debt. Get real!
March 14th, 2008 at 10:37 am
When I found my wife I did not buy her, I did not sign a contract. I did not purchase my kids, they were not in a full color add in the local newspaper, your comparisons to buying a home, marriage and family are absurd. Because people are walking away from homes they are actually trying to save their families. The only thing that can live off the home in hard times are termites and mold. Your home will not provide health insurance when you loose your job, when your house burns to the ground, the first thing you grab is your kids and your wife, I wounder what you would run away with.
Had Countrywide Wells Fargo, Indymac etc…..not signed off on sub prime loans we would not be in this situation. Sub prime loans drove up inflated home values giving perspective buyers a false sense of security that they can “Get Out” with all their money back. We need people to walk away, to help drive home values down to their true value and help stabilize the economy. This is why the Fed Chairman asked banks to reduce the principle of mortgage balances so the family can afford the payments. Banks said no and now they
get to own a foreclosed home. Stop with the hideous comparisons.
April 2nd, 2008 at 6:38 pm
Two weeks ago I would have said do every thing you can to keep a good credit rating, but if your house is worth half of what you paid for it just 8 months ago, I would say let it go back. I have never thought like that before, but I don’t think we have been in a situation like we are in right now since the 1920’s