Comments on: Strategic Default: Walking Away from Mortgages
- This serves the greedy bankers right. They are the ones who took huge risks by funding far too much real estate development because they were always trying to take over that next bank. And they caused an enormous housing bubble because far too much real estate was built - a great deal of it on speculation. So I don't have any problem with people who bought at the wildly inflated prices handing the problem back to the bankers that created the whole mess in the first place.
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- My parents bought their home in Phoenix over 20 years ago and faithfully paid their mortgage every month. During the boom, the bank encouraged them to use their equity to upgrade the house. They did, and when their finances went thru what the crash with everyone elses, they went to the bank and asked for some help, they were turned away. The same bank that the government bailed out wouldn't help people trying to do the right thing. So my folks are doing something they were brought up to believe is wrong. They are walking away. They are doing a short sale and the only people who will suffer is them. What the financial institutions in this country are doing is immoral, unethical and if the people in charge don't suffer in this life, it helps to know they will have to face the ultimate Judge.
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- It is amazing how so many people can rationalize what they do. These people do not care if they stick someone else with the bill as long as they don't have to pay it themselves. Nobody forced these deadbeats to buy a home. It is obvious that many people do not deal in good faith. A famous school principal from the early 1900's taught his students that "No one has a right to do that which, if everyone did it, would destroy our society." What could be truer?
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- They wanted the house, they had to have the house qnd with their eyes wide open they signed the loan. Didn't work the way they wanted? They signed for the loan and were not forced to. If the house appreciated 50%, how many of them would be running to their loaner saying, "We made a lot of money on the money you loaned us so we feel we should owe you more payback." Not going to happen but it works both ways, win or lose you pay for what you signed up for.
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- 60 Minutes should disclose that when people walk away from a mortgage that the banks are required to report that "forgiveness of debt" to the IRS. Then the IRS will treat their non-payment as "phantom income," and income taxes will be due to the IRS. Of course, the IRS will also report that same phantom income to the State where there will be more taxes due.
One of the interviewees said he was an "auditor." There is an irony there. Who would hire this person anyway? When he audits does he do his job honestly? Would he accept payments to not disclose irregularities? I hope that person reads this and mends his way. - Reply to this comment
- It's pretty funny reading through these comments. It's also pretty clear that most of you never read the article, in that banks walk away from investments all the time.
It's interesting how it is perfectly acceptable to most people if a bank or a company walks away from a bad business deal....but if a homeowner does it....they are somehow "evil" and the scum of the earth if they do it. - Reply to this comment
- Whatever palatable rationalization the Deaners had for their strategic default, and there wasn't much of one, evaporated when it was revealed near the end of the story that they had stopped paying their mortgage five months ago and were merely squatting until eviction.
Will the Deaners be disclosing that larceny in their rental applications? - Reply to this comment
- Everybody that is paying for a home is in the same situation. Market values have dropped accross the U.S. So is everyone just supposed to walk away from their obligation to pay the loan they signed in good faith?
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- I have sympathy for those who lose their job and lose their home, but these 2 profiles, give me a brake. Credit companies need to come up with a new score that stays with those who can pay, but 'walk away', from ANTHING (houses, cars, ect.). Should remain in their credit score FOREVER. If they sign a contract for anything and 'walk away' I would never trust them. In this down market,I bet they didn't 'walk away' from their 401k funds.
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- THOSE CONSIDERING A STRATEGIC DEFAULT ON THEIR MORTGAGES MAY WANT TO CHECK OUT THE FEDERAL TAX CONSEQUENCES OF SUCH A DECISION. THE LAST TIME I CHECKED, WHICH WAS TWO DAYS AGO, A SHORT SALE ON A DEFAULTED PROPERTY NOT ONLY RESULTS IN A BAD CREDIT RATING, BUT THE LENDER WILL REPORT THE DIFFERENCE BETWEEN WHAT WAS OWED TO THEM AND HOW MUCH THEY RECEIVED FROM THE SHORT SALE AS "INCOME" TO THE OWNER. YOU MAY GET OUT OF ONE DEBT ONLY TO INHEIRIT ANOTHER DEBT FOR WHICH THE LONG ARM OF THE FEDERAL GOVERNMENT CAN COLLECT OVER THE NEXT TEN YEARS THROUGH THE ENFORECEMENT OF THEIR TAX LIEN. A MORE "REASONABLE" ALTERNATIVE, IS TO RENT OUT THE HOUNSE UNDERWATER AND USE THE EXPENSES, WHICH WILL PROBABLY EXCEED ANY GROSS INCOME AS A TAX WRITE OFF AS LONG AS YOU ARE EMPLOYED. THE IDEA PAYING RENT AND IRS MAY MAKE YOU RETHINK ANY HASTY DECISION ABOUT "WALKING AWAY"
WHATEVER ONE DOES, DO NOT COMPARE HOW BUSINESSES WALK AWAY WITH INDIVIDUALS. BUSINESSES THAT WALK AWAY ARE USUALLY LEGAL ENTITIES THAT CAN FAIL AND HAVE OFFICERS WHO CAN REINVEST THE SAME BUSINESS ASSETS INTO ANOTHER LEGAL BUSINESS ENTITY. IRS TAX LIEN IS ENFORECEABLE AGAINST ASSETS LIKE A BANK ACOUNTS, 401-K, WAGES AND ANY OTHER FORM OF "PERSONAL PROPERTY" THAT HAS A NET VALUE AFTER LEVY, SEIZURE AND SALE. I BELIEVE CBS WOULD HAVE DEMONSTRATED MORE JOURNALISTIC RESPONSIBLITY IF THIS INFORMATION WAS INCLUDED IN THE SEGMENT.
REASONABLE MIND-FORMER REVENUE OFFICER WITH THE IRS. - Reply to this comment
