Originally posted by: Skoorb
12% seems kind of OMG wth number to me. 1/5th of homeowners upside down doesn't concern me because that's easy to happen with 100% loans and all that, but 12% in foreclosure is bad, especially since unemployment is still very low. This foreclosure number, unless the gov does something very strange, is going to greatly increase. 20% would not surprise me before this is all said and done.
Originally posted by: Genx87
There is an article on CNN Money about people letting themselves go into forclosure even when they can make payments. They will take a hit on their credit because the losses they have seen will never be made up. Think about some schmuch who makes 80K a year buying a 500K home that is now at 350K and dropping fast. When the hell is he going to make up that 150K? Walk away, rent for 6-8 years, and get back in. I'd be interested in seeing how many of these people can afford the loan but are walking? See if as a % it grows over the next 12 months as people make financial decisions.
Originally posted by: Genx87
There is an article on CNN Money about people letting themselves go into forclosure even when they can make payments. They will take a hit on their credit because the losses they have seen will never be made up. Think about some schmuch who makes 80K a year buying a 500K home that is now at 350K and dropping fast. When the hell is he going to make up that 150K? Walk away, rent for 6-8 years, and get back in. I'd be interested in seeing how many of these people can afford the loan but are walking? See if as a % it grows over the next 12 months as people make financial decisions.
Originally posted by: Genx87
There is an article on CNN Money about people letting themselves go into forclosure even when they can make payments. They will take a hit on their credit because the losses they have seen will never be made up. Think about some schmuch who makes 80K a year buying a 500K home that is now at 350K and dropping fast. When the hell is he going to make up that 150K? Walk away, rent for 6-8 years, and get back in. I'd be interested in seeing how many of these people can afford the loan but are walking? See if as a % it grows over the next 12 months as people make financial decisions.
Originally posted by: Firebot It's a vicious cycle caused by the lack of any regulation in lending practices.
What kind of money are we talking about here? 50% is quite a lot to be upside down. I'd walk away.Originally posted by: dardin211
Originally posted by: Genx87
There is an article on CNN Money about people letting themselves go into forclosure even when they can make payments. They will take a hit on their credit because the losses they have seen will never be made up. Think about some schmuch who makes 80K a year buying a 500K home that is now at 350K and dropping fast. When the hell is he going to make up that 150K? Walk away, rent for 6-8 years, and get back in. I'd be interested in seeing how many of these people can afford the loan but are walking? See if as a % it grows over the next 12 months as people make financial decisions.
I am wondering the exact same thing, as it's something that has crossed my mind with my own home. I have a 780 credit score, 30yr fixed at a 5.62% rate, always paid on time, have no problems making the payment each month. The house next door as well as one across the street foreclosed and one sold recently for about 50% less then what I currently owe on my own home, the other is on the market for about 40% less then what I currently owe. So this puts me quite a ways upside down on my home, as I am only a few years into owning it. Being so far upside down, probably wouldn't bother me, if this was the house I wanted to die in, however it is not. The wife and I planned on owning this for about 7-10yrs and then getting something slightly bigger, as our family will have grown in size by then.
I doubt I would do this, even though I know walking away is the correct choice financially, but morally I am not the person to do this.
Originally posted by: jpeyton
What kind of money are we talking about here? 50% is quite a lot to be upside down. I'd walk away.Originally posted by: dardin211
Originally posted by: Genx87
There is an article on CNN Money about people letting themselves go into forclosure even when they can make payments. They will take a hit on their credit because the losses they have seen will never be made up. Think about some schmuch who makes 80K a year buying a 500K home that is now at 350K and dropping fast. When the hell is he going to make up that 150K? Walk away, rent for 6-8 years, and get back in. I'd be interested in seeing how many of these people can afford the loan but are walking? See if as a % it grows over the next 12 months as people make financial decisions.
I am wondering the exact same thing, as it's something that has crossed my mind with my own home. I have a 780 credit score, 30yr fixed at a 5.62% rate, always paid on time, have no problems making the payment each month. The house next door as well as one across the street foreclosed and one sold recently for about 50% less then what I currently owe on my own home, the other is on the market for about 40% less then what I currently owe. So this puts me quite a ways upside down on my home, as I am only a few years into owning it. Being so far upside down, probably wouldn't bother me, if this was the house I wanted to die in, however it is not. The wife and I planned on owning this for about 7-10yrs and then getting something slightly bigger, as our family will have grown in size by then.
I doubt I would do this, even though I know walking away is the correct choice financially, but morally I am not the person to do this.
Originally posted by: Firebot
Originally posted by: Genx87
There is an article on CNN Money about people letting themselves go into forclosure even when they can make payments. They will take a hit on their credit because the losses they have seen will never be made up. Think about some schmuch who makes 80K a year buying a 500K home that is now at 350K and dropping fast. When the hell is he going to make up that 150K? Walk away, rent for 6-8 years, and get back in. I'd be interested in seeing how many of these people can afford the loan but are walking? See if as a % it grows over the next 12 months as people make financial decisions.
That's the biggest problem out of all this. Housing prices are not getting higher, and more and more people are choosing to get foreclosed. The banks take the hit on the foreclosure, credit crunches down a bit more, house prices drop again due to the high supply, more house owners decide that it's easier to get foreclosed then pay, etc.... It's a vicious cycle caused by the lack of any regulation in lending practices.
I actually don't blame him. If he has to move, where could he make that 200k up? Truly where? If he sells the house he cannot take out an unsecured loan for $200k to pay the bank, so what happens? He really ought to buy a new house while this is still his and his credit is ok, then just forget the first one.Originally posted by: jpeyton
Yep, I have a friend who is an engineer for a biotech company in CA. He has a fat salary, great stock options, great credit, lots of cash; he had no problem buying a house for $500k last year.
A year later, he's looking to relocate to Boston, but his house is worth $300k and nobody is buying.
He will probably walk away from his mortgage as soon as his transfer to Boston comes in. It makes no financial sense holding onto a property that he's upside down on by $200k.
This crisis didn't just hit poor people living beyond their means; even well-to-do people are walking away from dead properties.
Originally posted by: mugs
People who walk away from mortgages they can afford are some of the lowest scum who are contributing to the problems we're having now. :thumbsdown: We need recourse mortgages in this country so the banks can take these people's assets.
Originally posted by: BoberFett
Originally posted by: mugs
People who walk away from mortgages they can afford are some of the lowest scum who are contributing to the problems we're having now. :thumbsdown: We need recourse mortgages in this country so the banks can take these people's assets.
So people who are walking away from their home because it's not worth it should be in debt for life, but those who walk away because they can't afford it just get a temporary credit ding?
When we start instituting garnishment on these morons who bought more than they could afford, then maybe we can think about punishing those who are simply doing what is in their family's financial interest.
Originally posted by: conehead433
What gets me is how many people would sign up for an ARM when interest rates were historically near their bottom. I also definitely don't have any sympathy whatsoever for any lender who would push someone into an ARM. That said, I think part of the solution is to make ARMs against the law. Everyone can borrow at a fixed rate and if interest rates go down then they can refinance and the bank picks up a little extra for refinancing.
Originally posted by: JSt0rm01
Daniel49: I find it really funny and ironic that your "America the beautiful" youtube link has been removed for copyright infringement. lol
Crap like this pisses me off to no extent. I don't care how much a person is upside down on their home, they signed on the dotted line and are obligated to pay off their mortgage.Originally posted by: Genx87
There is an article on CNN Money about people letting themselves go into forclosure even when they can make payments. They will take a hit on their credit because the losses they have seen will never be made up. Think about some schmuch who makes 80K a year buying a 500K home that is now at 350K and dropping fast. When the hell is he going to make up that 150K? Walk away, rent for 6-8 years, and get back in. I'd be interested in seeing how many of these people can afford the loan but are walking? See if as a % it grows over the next 12 months as people make financial decisions.
Originally posted by: frostedflakes
Crap like this pisses me off to no extent. I don't care how much a person is upside down on their home, they signed on the dotted line and are obligated to pay off their mortgage.Originally posted by: Genx87
There is an article on CNN Money about people letting themselves go into forclosure even when they can make payments. They will take a hit on their credit because the losses they have seen will never be made up. Think about some schmuch who makes 80K a year buying a 500K home that is now at 350K and dropping fast. When the hell is he going to make up that 150K? Walk away, rent for 6-8 years, and get back in. I'd be interested in seeing how many of these people can afford the loan but are walking? See if as a % it grows over the next 12 months as people make financial decisions.
People invested in homes hoping they could sell in 5-10 years and net a nice little profit, but the bubble burst. Sucks that they chose a bad time to buy a house, but that's not a good enough excuse to walk away from a mortgage.