“The longer I’m in foreclosure, the better,” she said.

[jen0610]

A friend of mine works for one of those "big lenders" on the foreclosure side. Her job is to actually pay the people that have quit paying on their loans to get out of the house. This is in an effort to avoid a bunch of legal hassle and damage to the property (apparently some people are vengeful when being kicked out of a house they aren't paying for) which costs them money. She said they offer thousands of dollars to pay the people to leave peacefully. Broken system? Yep, I'd say so.

One of the girls I work with, her and her hubby haven't paid their mortgage in 16 months. They have tried to work on getting a modification, with no luck. The last time they refinanced, it was for 283,000.00. Their intitial purchase price was 185,000.00. The difference in money, was to purchase a new truck, a Harley, go on vacation, paint the house, put hardwoods in the whole house...the list goes on. Their current payment should be costing them 1600.00 a month. She has repeatedly stated that she will work with the bank on a modification, but she will only pay $700.00 a month in a payment for 15 years.

In her mind, their house was purchased for 185,000.00, and in the five years that they have lived there and paid the mortgage, they have aready paid around $60,000.00 towards the cost of the house. She feels that the amount that is in need of modification is the balance - $125,000.00. She takes that figure and divides it by 180 (15 years), for the only payment amount she is willing to accept.

She has stated NUMEROUS times, that if the bank doesn't work with them and they do actually lose the house, all the stainless steel appliances are going with her. The oak panelling and chair rail in the dining room are going with her. The hardwood floors - yep, she will have her DH take them up and they will take those with them as well. The deck they put on, will be dismanteled and taken with them. Everything SHE has put into that house, will be taken. Even though all of those upgrades were done, after they refinanced and they only got the money to do these upgrades by asking for the additional 100,000.00. She doesn't care, all she sees is her home not being hers and her stuff that she put in isn't going to benefit anyone else.

She has even stated that all of the walls will be splattered with hiddous paint colors, so they have to be repainted.

It is SOOOO hard to sit here and listen to her and not go off on her. It would not make for a workable work enviroment. Sure I would LOVE to be in a different house then we are in, but we couldn't afford anything different when we bought and with the outlook of things, we won't ever be able to afford anything different for a long time to come.

 

[mamacatnv]

Don't quote me on this because this info is coming from my mom who tends to mis-hear things occasionally, but...she heard a few weeks ago on the Today show or the morning news, etc that the banks may be able to "come after" the people that just left their house to "start over" and they have up to 5 years to do it. So say you left your house and it went into foreclosure, 4 years from now the bank could come knocking and ask for all the money that you still owed on that house. That makes me feel better for people who think it is okay to just stop paying for their mortgage. They are also the people that have kept me from being able to get one because I have student loans - despite the fact that I have a steady, well paying job and excellent credit.

I saw that story on Today awhile back and your mother is correct on what she heard. I did a bit of research following that feature because I was curious. I even started a thread here about the whole walking away concept.

The big factor in future collections depends on whether or not a state is a recourse state. Example, in California there is no recourse, once the bank takes the house that is it, done deal. In Florida and NV the lenders can come after the former owner for the balance unless as part of the short sale or foreclosure dealings the homeowner secures a lien release. It is my understanding that in Florida per the news story that the lenders have up to 5 years to collect and will monitor someones credit until they see improvements then they will swoop in and begin collection proceedings. Per some friends of mine who are chosing to walk here in Nevada the recourse time frame is only 6 months.

 

[akcire]

"Foreclosure has allowed them to stabilize the family business. Go to Outback occasionally for a steak. Take their gas-guzzling airboat out for the weekend. Visit the Hard Rock Casino."

The above is a quote from the OP's reference article.

I love that these people think it is okay to not pay their mortgage, and use the money to gamble. Trust me, I think buying all the toys is bad enough---but gambling??!!!

I am not a radical, I even enjoy going to our local casino occasionally for a few hours of slots; but I think it may be time for all these casino's to be shut down if people are using there "foreclosure windfall" to gamble. Additionally, when I look around in the casino many of the people there would probably be better served to spend the money on the basics.

Also, all these people that think they are sticking it to the man, are only sticking it to their neighbors. The bank can survive a $100,000 loss on a property, but the neighbors on the blocks of these foreclosed on houses sure can't.

 

[mamacatnv]

Also, all these people that think they are sticking it to the man, are only sticking it to their neighbors. The bank can survive a $100,000 loss on a property, but the neighbors on the blocks of these foreclosed on houses sure can't.

Good point, their actions make an already crappy market that much worse. The counter argument that I am hearing more and more is "we don't have an obligation to our neighbors, just to our own financial futures" in a way, they are right and that is another tough one to swallow in this me me me world.

 

[Luvchefmic]

xxxx

 

[All American]

Can I just B - - - - slap that smile off her face before I have to start paying for her selfish idiocy? I think that is what bugs me the most about the article. It's the smugness....ugh!!!

 

[Brit17]

One of the things that made me the angriest about that article was this:
“Both generations of Pembertons have hired a local lawyer, Mark P. Stopa. He sends out letters — 1,700 in a recent week — to Floridians who have had a foreclosure suit filed against them by a lender.
Even if you have “no defenses,” the form letter says, “you may be able to keep living in your home for weeks, months or even years without paying your mortgage.”
About 10 new clients a week sign up, according to Mr. Stopa, who says he now has 350 clients in foreclosure, each of whom pays $1,500 a year for a maximum of six hours of attorney time. “I just do as much as needs to be done to force the bank to prove its case,” Mr. Stopa said. Many mortgages were sold by the original lender, a circumstance that homeowners’ lawyers try to exploit by asking them to prove they own the loan. In Mrs. Pemberton’s case, Mr. Stopa filed a motion to dismiss on March 17, 2009, and the case has not moved since then. He filed a similar motion in her son’s case last December. “

The whole thing just makes me sick. I don’t get how people can totally dismiss that fact that THEY agreed to a price for the house and signed a contract. That doesn’t go away just because your house is worth less now. Can you stop paying your car loan because your car isn’t worth what it was when you bought it? It’s theft, plain and simple.

While I still think it’s wrong, I can understand doing it if you REALLY can’t make your payments because of unexpected medical costs or job losses and the bank won’t work with you and you have nowhere to go. But these people who brag about the other things they can buy now are disgusting.

ITA ...

A friend of mine works for one of those "big lenders" on the foreclosure side. Her job is to actually pay the people that have quit paying on their loans to get out of the house. This is in an effort to avoid a bunch of legal hassle and damage to the property (apparently some people are vengeful when being kicked out of a house they aren't paying for) which costs them money. She said they offer thousands of dollars to pay the people to leave peacefully. Broken system? Yep, I'd say so.

... I've read about people tearing appliances, lighting fixtures, plumbing, HVAC units, copper piping, etc. out of their foreclosed homes before they finally vacate the property, leaving it in total disarray ... even though it totally disgusts me that banks are actually paying people to leave the property peacefully, I guess I can reluctantly understand why the banks may be doing this ... broken system? ... yes indeed ... ...

This article makes me furious! It is beyond ridiculous that people can simply stop paying their mortgages, get to keep their homes, and even get to flaunt it proudly in a newspaper article.

I don't know how to resolve this situation, but it needs resolving, that's for sure.

What ever happened to personal responsibility? I realize that some people are in terrible situations due to things like medical bills and other truly bad circumstances, but there are a lot of people in foreclosure due to bad decision making and a lack of taking responsibility.

This isn't "sticking it to the man," this is theft. They are using a home they are not paying for that the bank owns. And to be happy about it is just plain warped.

ITA ...

 

[Anjelica]

Such a shame there is a total lack of personal responsibility in many American's these days.

 

[krcit]

Can I just B - - - - slap that smile off her face before I have to start paying for her selfish idiocy? I think that is what bugs me the most about the article. It's the smugness....ugh!!!

I know!!! Disgusting! To be so proud! Makes me sick. Once again the joke is on the hard-working people who actually live within their means. Oh well, at least we can sleep at night.

 

[RadioNate]

I live in one of the worst real estate markets in the country with 60% of mortgages underwater and a foreclosure rate in the top 3. My home value has plummeted but DH and I keep plugging away at the mortgage.

I know of several people who are walking away from their homes. These are people who have not suffered job losses or major financial setbacks. These are people who have decided that paying off the loan is not worth it due to the loss of equity. Their reasoning is that they are actually making a smarter financial decision than I am. They are walking away from 100's of thousands of dollars in debt that according to the "experts" in our area will take 18-25 years to recoop if it ever does. They view the decision to "ruin" their credit as a timely decision "lots of people are in the same boat, if ever there was a time to have bad credit now is it since we won't be alone". They plan to re-buy in a couple of years at significantly lower prices.

I struggle with this, I was taught that ones credit rating was reflective of ones personal character and it is really hard for me to think of destroying it on purpose. I am not talking about situations beyond ones control ie job loss etc. I am talking about willingly and knowingly just walking.

Nevada is a recourse state which means the banks could feasibly come after them for the balance due, however there are lots of "experts" who are now walking homeowners thru the process and making sure they get lien releases etc. which save them from further repercussions.

I have 2 neighbors - one across the street and one directly next door. Bonehead across the street has not made a house payment since Oct 2007 - yes, you read that right, 2.5 years. Meanwhile he has toys and a new girlfriend who he wines and dines, dinners, concerts, spa's etc which he posts all over his Facebook. Grrrr but he won't mow his lawn "Until the bank decides whether or not I can keep the house" OMG it is a disaster to look at. Neighbor next door makes twice what DH and I do but they are spenders and live way beyond their means. They figure they can get a couple of years out of the bank and have stopped making their payments. Oh, and during the boom both of my neighbors maxed out their equity for toys, trips etc. Meanwhile, here we sit, plugging along doing what we think is "the right thing to do" and wondering if it really is the right thing to do

I totally get where you are coming from. FL is at 55% of homes underwater. We did everything "right," put down 20%, didn't refinance, never had a HELOC, we drive paid for cars, and have savings.

Then my DH was on the 'layoff list' at his job. He found a new one nearly right away...the catch, it is in a different state.

We are desperately trying to do the 'right thing' and it is killing us. It is killing our family. My stress level is at an all time high. We can't get any help. Our bank will only approve a short sale with a deficiency judgement. I can't get a mortgage adjustment because our payment isn't more than 32% of our income. Again, so much for doing things "right."

We are currently looking for a renter because we have no other options left when it comes to selling. However because every one and their brother is renting out houses "fair market" rent is currently $700 a month below our mortgage payment. We can afford the mortgage payment but it puts us renting a small townhouse in a 'good' area of the new city or a moderate single family home in a 'questionable' area.

So yeah. I totally get why people just walk away. It is hard to sit here and do the right thing every month when each neighbor that walks away drags your value down with them. Every day I consider walking away.

OH and for everyone who is going to point out my tickers. The October trip will likely be canceled. I was hoping to get back here to visit friends since we are planing to move to the new city in a few weeks. We haven't bought plane tickets. We have APs that we bought last year and got the 3 months FL free so our passes would still be good for those dates. But yeah it'll likely have to be canceled. I actually forgot about it until I saw the ticker. Removing and having 'correct' info in my message board signature tickers hasn't been a top priority.

The cruise final payment isn't due until April 2011 so yeah, I'm holding on to it in the hopes that things will be better by then and we can go. So feel free to flame me on keeping up a little hope.

 

[mamacatnv]

I totally get where you are coming from. FL is at 55% of homes underwater. We did everything "right," put down 20%, didn't refinance, never had a HELOC, we drive paid for cars, and have savings.

Then my DH was on the 'layoff list' at his job. He found a new one nearly right away...the catch, it is in a different state.

We are desperately trying to do the 'right thing' and it is killing us. It is killing our family. My stress level is at an all time high. We can't get any help. Our bank will only approve a short sale with a deficiency judgement. I can't get a mortgage adjustment because our payment isn't more than 32% of our income. Again, so much for doing things "right."

We are currently looking for a renter because we have no other options left when it comes to selling. However because every one and their brother is renting out houses "fair market" rent is currently $700 a month below our mortgage payment. We can afford the mortgage payment but it puts us renting a small townhouse in a 'good' area of the new city or a moderate single family home in a 'questionable' area.

So yeah. I totally get why people just walk away. It is hard to sit here and do the right thing every month when each neighbor that walks away drags your value down with them. Every day I consider walking away.

Alison, I know you and I have shared in these discussions before. I am so sorry that it continues to get worse for you guys. No flames from me, I hope you get to take that cruise!

People who are not dealing with the realities we are seeing in our respective states don't get it. When the people who are perfectly capable of making those mortgage payments (like my idiot neighbors) just up and decide not too while the folks like you and I and many who contributed to this thread plug along doing everything we can it is frustrating to say the least.

I wish you well.

 

[Luvchefmic]

Alison, I know you and I have shared in these discussions before. I am so sorry that it continues to get worse for you guys. No flames from me, I hope you get to take that cruise!

People who are not dealing with the realities we are seeing in our respective states don't get it. When the people who are perfectly capable of making those mortgage payments (like my idiot neighbors) just up and decide not too while the folks like you and I and many who contributed to this thread plug along doing everything we can it is frustrating to say the least.

I wish you well.

add me to the "feeling your pain" support group, my DH is a trucker...thankfully he got a job BUT with the economy the way it is the pay is lower and the time on the road is longer. So technically Alison my DH is working in another state too..I haven't seen him since the end of Apri. Local jobs here for a trucker (central FL) with over 20 yrs experience are about $10per hr (no matter what the common ads say) if you can find one. Most trucking companies are getting rid of the hourly worker & going with owner/operators due to expenses. I relate totally to you re-marital stress & finances. Just hang in there and know that you are not alone...call me naive but I think the people that do the right thing will end up better off

Ruthie

 

[Motherofboys]

I totally get where you are coming from. FL is at 55% of homes underwater. We did everything "right," put down 20%, didn't refinance, never had a HELOC, we drive paid for cars, and have savings.

Then my DH was on the 'layoff list' at his job. He found a new one nearly right away...the catch, it is in a different state.

We are desperately trying to do the 'right thing' and it is killing us. It is killing our family. My stress level is at an all time high. We can't get any help. Our bank will only approve a short sale with a deficiency judgement. I can't get a mortgage adjustment because our payment isn't more than 32% of our income. Again, so much for doing things "right."

We are currently looking for a renter because we have no other options left when it comes to selling. However because every one and their brother is renting out houses "fair market" rent is currently $700 a month below our mortgage payment. We can afford the mortgage payment but it puts us renting a small townhouse in a 'good' area of the new city or a moderate single family home in a 'questionable' area.

So yeah. I totally get why people just walk away. It is hard to sit here and do the right thing every month when each neighbor that walks away drags your value down with them. Every day I consider walking away.

OH and for everyone who is going to point out my tickers. The October trip will likely be canceled. I was hoping to get back here to visit friends since we are planing to move to the new city in a few weeks. We haven't bought plane tickets. We have APs that we bought last year and got the 3 months FL free so our passes would still be good for those dates. But yeah it'll likely have to be canceled. I actually forgot about it until I saw the ticker. Removing and having 'correct' info in my message board signature tickers hasn't been a top priority.

The cruise final payment isn't due until April 2011 so yeah, I'm holding on to it in the hopes that things will be better by then and we can go. So feel free to flame me on keeping up a little hope.

What's killing me is the people that I know like this.....put down there 20%, money that they saved for years to be able to own a home and then seeing all of that go away through no fault of their own

It's heartbreaking to hear about these kinds of situations and see good families that have good credit scores, hard working, bought within their means - lose it all and have to start over again.

Then you have people like the ones in the articles that put zero down, bought way more than they could afford, used the house as an ATM - and they are the ones working the system for all they can get

 

[Colleen27]

They're kidding, right? You mean - using the couple in the opening paragraph - you can be intelligent enough to run a business, purchase a boat, shop for and buy a house, live well... but naive enough to be "snookered" by a bank when it comes to the mortgage? Really? :rolleyes3

I think the problem right now is that the people who were intelligent and prudent in their borrowing are just as screwed (sometimes moreso) than those who bought into the crazy ARM, interest-only, house-as-an-ATM thinking.

I have a hard time condemning people who walk away out of self-preservation right now, particularly in my part of the country. When you're looking at the choice between depleting everything you have to pay the mortgage a little longer before you fall into foreclosure or getting ahead of the situation by stopping payments with enough lead time to secure alternative housing arrangements, well, at some point keeping a roof over your kids' heads gets to be more important than your word to your lender. But some of the people doing it now just to get ahead are just slimy, like that last guy in the article. In foreclosure on 3 properties, with no interest in working with the bank to remedy the situation? That's not someone who has no other options, and it will be people like him who will end up motivating new laws that will ultimately hurt those who have no other options the most.

 

[Colleen27]

I find it interesting that those who say, "I'd rather be homeless" are typically those who will never be in danger of being homeless. Those whom I know who WERE homeless now say they'll do whatever it takes, by hook or by crook, to never be homeless again. If that means leaving a bank (who got its bailout but still hasn't changed its ways, BTW) in the lurch, then that's what has to be done.

People use pretty words, but unless they've had their sheriff sale and their date of redemption is fast approaching, I find it difficult to believe the sincerity of them.

I agree. The people we've known who have walked away from homes didn't do so lightly. One family that we know well tried everything, and all it amounted to was throwing away thousands of dollars trying to catch up missed payments for the bank to tell them it wasn't enough. Unless they could requalify for their loan (after several job losses, which made their employment history and credit rating both insufficient to do so) there was no way to avoid foreclosure. When the sale notice is posted on the door and you're looking at your child knowing that honoring your obligation to the bank will leave you with no way to scrape together a deposit for a new place to live, you choose the path that doesn't see your family homeless or your child's possessions thrown out on the lawn.

 

[mamacatnv]

I agree. The people we've known who have walked away from homes didn't do so lightly. One family that we know well tried everything, and all it amounted to was throwing away thousands of dollars trying to catch up missed payments for the bank to tell them it wasn't enough. Unless they could requalify for their loan (after several job losses, which made their employment history and credit rating both insufficient to do so) there was no way to avoid foreclosure. When the sale notice is posted on the door and you're looking at your child knowing that honoring your obligation to the bank will leave you with no way to scrape together a deposit for a new place to live, you choose the path that doesn't see your family homeless or your child's possessions thrown out on the lawn.

The above type scenarios break my heart and scare me. They have become all too common and to people who never ever would have expected to find themselves in that situation. I have total compassion and sympathy and wish the banks were more willing to work with them, honestly in our markets the banks don't want the property.

Its the users and abusers that frost me. I wish there were penalties for those that are chosing to renig on their obligations when they are fully capable of fulfilling said obligation. I am talking about the folks like my neighbors who have not suffered job losses or anything of the like. They have suffered a loss of equity and have not only decided heck with it but are willing to milk the system as long as they possibly can. Its not like they moved and are now paying rent somewhere. They are sitting in their houses not paying anything, no taxes etc. That stinks!

 

[Colleen27]

The big factor in future collections depends on whether or not a state is a recourse state. Example, in California there is no recourse, once the bank takes the house that is it, done deal. In Florida and NV the lenders can come after the former owner for the balance unless as part of the short sale or foreclosure dealings the homeowner secures a lien release. It is my understanding that in Florida per the news story that the lenders have up to 5 years to collect and will monitor someones credit until they see improvements then they will swoop in and begin collection proceedings. Per some friends of mine who are chosing to walk here in Nevada the recourse time frame is only 6 months.

In Michigan, if you have a recourse loan the lender has several years (I think 5, but it has been a while since the article in the paper about this) from the END of the loan term to pursue a deficiency judgment, so some of these people may be in for a nasty surprise many years down the line. I wonder how many lenders will really pursue that avenue, though, since most of the foreclosures here are due to prolonged unemployment and genuine financial hardship. I can't imagine any of the big guys are willing to make headlines as the company suing laid off auto workers for the deficiency on the 100K home that's now worth 30K, particularly a decade after the fact.

 

[cteddiesgirl]

The above type scenarios break my heart and scare me. They have become all too common and to people who never ever would have expected to find themselves in that situation. I have total compassion and sympathy and wish the banks were more willing to work with them, honestly in our markets the banks don't want the property.

Its the users and abusers that frost me. I wish there were penalties for those that are chosing to renig on their obligations when they are fully capable of fulfilling said obligation. I am talking about the folks like my neighbors who have not suffered job losses or anything of the like. They have suffered a loss of equity and have not only decided heck with it but are willing to milk the system as long as they possibly can. Its not like they moved and are now paying rent somewhere. They are sitting in their houses not paying anything, no taxes etc. That stinks!

I agree.
My neighbor lost his house a few months ago. He had lost his job a while back and was unable to find another job. He even did training and started driving a semi for a while. That evidently didn't pan out too well and he was out of a job again. His wife was only able to work part time jobs in retail, so her paycheck didn't amount to much. When he tried to get help to lower his mortgage and to try to save his house, he was repeatedly turned away.

It stinks when there are people who play the system and can get help while people like my neighbor couldn't get it and lose their homes because of it.

 

[eliza61]

I totally get where you are coming from. FL is at 55% of homes underwater. We did everything "right," put down 20%, didn't refinance, never had a HELOC, we drive paid for cars, and have savings.

Then my DH was on the 'layoff list' at his job. He found a new one nearly right away...the catch, it is in a different state.

We are desperately trying to do the 'right thing' and it is killing us. It is killing our family. My stress level is at an all time high. We can't get any help. Our bank will only approve a short sale with a deficiency judgement. I can't get a mortgage adjustment because our payment isn't more than 32% of our income. Again, so much for doing things "right."

We are currently looking for a renter because we have no other options left when it comes to selling. However because every one and their brother is renting out houses "fair market" rent is currently $700 a month below our mortgage payment. We can afford the mortgage payment but it puts us renting a small townhouse in a 'good' area of the new city or a moderate single family home in a 'questionable' area.

So yeah. I totally get why people just walk away. It is hard to sit here and do the right thing every month when each neighbor that walks away drags your value down with them. Every day I consider walking away.

OH and for everyone who is going to point out my tickers. The October trip will likely be canceled. I was hoping to get back here to visit friends since we are planing to move to the new city in a few weeks. We haven't bought plane tickets. We have APs that we bought last year and got the 3 months FL free so our passes would still be good for those dates. But yeah it'll likely have to be canceled. I actually forgot about it until I saw the ticker. Removing and having 'correct' info in my message board signature tickers hasn't been a top priority.

The cruise final payment isn't due until April 2011 so yeah, I'm holding on to it in the hopes that things will be better by then and we can go. So feel free to flame me on keeping up a little hope.

No flames here either. One thing we must remember is that a lot of times these articles are meant to show the absolutely "worse" traits because that's what sells. Sort of like the network news, it's more profitable to show the "lead and steel stories, (gunshot and knife murders) than the "local" interest stories.

There are thousands of hardworking americans who are on the ropes and just as many if not more who are 1 step away from disaster.

Hold to hope!

 

[castleview]

You know, we pay the mortgage every month and I think "yeah, we can live here another month!". I often feel guilty because we are sort of paycheck to paycheck still and I feel I should be more responsible. How do these people who aren't paying their bills sleep at night?