Real Estate Forums

NealRM · 01-30-2008, 11:39 AM

This is disturbing.

I watched a report on the California foreclosures on the new last night. Along with the couples that made bad decisions and got in over their heads was a couple that just decided to walk away. They stated they could make the payments but were not going to because the house was worth less than the loan. Maybe it’s just me, but I would be ashamed. It’s one thing to make a bad decision or have bad luck prevent you from fulfilling your obligations, but it is completely dishonorable to just walk away.

I hope if congress does decide on some type of debt relief for those in foreclosure that they leave these crooks out of the picture.

coglethorpe · 03-03-2008, 01:01 PM

Quote:

Originally Posted by NealRM

This is disturbing.

I watched a report on the California foreclosures on the new last night. Along with the couples that made bad decisions and got in over their heads was a couple that just decided to walk away. They stated they could make the payments but were not going to because the house was worth less than the loan. Maybe it’s just me, but I would be ashamed. It’s one thing to make a bad decision or have bad luck prevent you from fulfilling your obligations, but it is completely dishonorable to just walk away.

Was this the "60 Minutes" report? What's happening in mortgages is what is happening with bankruptcies in the mid to late 1990s. The stigma is gone and borrowers will face foreclosure as a "personal finance decision" instead of a personal shame. Now bankruptcy laws have added sting to bankruptcy, but I don't know numbers on how well that has worked.

Lending restrictions loosened and I think people went crazy for a few years. I hope banks get/keep tight restrictions on loans, so the types who will just walk, don't get the loan in the first place. Foreclosures hurt everyone.

Jim B · 03-03-2008, 02:29 PM

this is going to be a continuing problem in some of these markets, and may send them into free fall. What would you do if you purchased a house for 600K 2 years ago in a nice new neighborhood and now most of your neighbors are gone, their houses are vacant with signs that say bank owned. Now if you wanted to sell your home you likely could get 350K or 375K if your lucky, but your mortgage is still 590K or something like that because you got one of those 100% financing loans.

Not saying I would walk away or condone what these people are doing but it is understandable.

If something is not done to stabilize some of these markets, you likely will see foreclosures causing other foreclosure and on and on, which seems to be happening in California and Florida already.

Thankfully New Jersey seems to be in recovery and we are not having to deal with this sort of thing.

Orlando MLS · 03-06-2008, 11:02 AM

Ethic - NO. Understandable - Absolutely.

I'm seeing a lot of people doing short sales that shouldn't be. They just want to offload their problem onto someone else. The sad part is that this is going to change the lending practices for a long-long time to come. We'll all be paying for the over inflation of the market for years. Mortgage rates will eventually sky-rocket and stay high for a long time.

These reductions in rates and bail-out programs offered by the government are only short term solutions. We're all going to have to pay for it eventually. Nobody is getting away unscathed.

Homebuilder · 03-25-2008, 11:17 PM

It is really unfortunate that many people are placed into this situation to begin with. I do agree that to just walk away from a commitment/agreement allowing the home to fall into foreclosure is unethical and not helping matters in the least bit. People should live up to their obligations.