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Mortgages: Walking Away

May 9, 2010 4:53 PM

It's estimated that one million Americans walked away from homes "underwater" or worth less than their mortgages even though they could afford the payments. Morley Safer reports on this trend, called strategic default, that threatens the economic recovery.

Strategic Default: Walking Away From Mortgages
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by kellwords March 3, 2013 11:33 AM EST
It is obvious whom should pay for this and that is the banks
Most of these mortgages were given to folks that did not have the financial means to even buy or refinance the properties to begin with. Most were convinced or encouraged to cash out on their EQUITY to begin with or were led to believe that their homes were worth much more than they were by corrupt lenders and appraisals.
Not one person/ institution or any government agency has been held accountable or liable for any of this mess ! Most of these mortgages and foreclosed homes were already paid back long ago as well, its just the interest and loan agreement that kept the homeowner responsible.
With the economy in a down ward spiral and the OCC, OTS, DOJ, FED RES. and more doing nothing to make the banks accountable now you wonder who is really in charge in this country. It certainly isnt the people or our government.
Now that they have declared the INDEPENDENT FORECLOSURE REVIEW a disaster program, just another of OBAMAS programs, after giving over 1.3 billion dollars to the fake auditors it has now been turned over to the same banks such as AURORA,BOA,CHASE,WF,CITI and others to do their own "in house" audits or just who were harmed
COME ON PEOPLE...wake up, how come they can audit their own criminal acts fairly? THIS is so beyond fraud and coverup I just cant see the end of it. Write your SENATORS,CONGRESS,PRESIDENT,AND ANY ONE WHO WILL LISTEN . IM appalled at the lack of people who do NOTHING but complain and have now lost everything they worked for. How do you give up?? In America I never thought this was possible.
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by evegrant November 4, 2011 7:19 PM EDT
I bought a condo 6 years ago for my disabled son. I paid $117500 for it and it is now worth about $23,000. That's an 80% loss. If I had made any other type of investment I would have walked away a long time ago. No one hangs on to plummeting stocks or other losing investments. Why should real estate be any different? I'm buying my son another identical condo in the same complex for $22,000 cash and then I'll walk away from the first one. The bank is not losing, they were bailed out by the government and that bail out did nothing to help the people. A better move would have been for the government to bail the people out by refinancing these underwater mortgages at current value and current interest rates. The banks would have still got their money and the people wouldn't be losing their homes or walking away.
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by catt73 July 16, 2011 4:47 PM EDT
We have beautiful home in Central Calif. No one can afford it. We are upside down on value. We get half of what we need from renters. So we are walking away. Our whole neighborhood defaulted. 300 homes worth nothing. The Homeowner's Assoc. drove a lot of people out. They charge $160/month. If you don't pay the assoc. fees, you must leave your home. We paid $520k and the house is worth $400k. The new homes going up in the area are $300k brand new. Tell me that we could negotiate with BOA? nope. They don't help customers unless you are unemployed or in default.
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by jsoneff May 2, 2011 12:08 AM EDT
I think people lose sight of the cause of the housing disaster. It was caused in large part by the banks irresponsibly loaning money to people who could not afford them. This caused many more buyers to enter the market than ever otherwise could have, driving prices into the stratosphere.

The results that should have been predictable by the banks was a very bad deal for those who could actually afford the homes. These were the innocent losers. No federal bailouts for them like the banks received. They are able to meet the committment they made so, no federal program to help them on the bad investment.

The system is feasting on the hard working middle class, and buying off all of the others, to the destriction of our entire way of life. Walk away is the only way for these people to make the deal square.

I will not walk away, but I do not blame anyone who does in the slightest.

JS.
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by domoloser February 12, 2011 11:37 AM EST
You have to look at the big picture, Clients I know for 15-20 years have lost huge equity positions and they went from 3-10 Million in equity to now where they lost there jobs and all their properties are under water. This is strictly a business decision the Banks know it the FDIC knows it and so all the smart investors ie; Trumps of the world etc. When you stop judging your neighbor and look at the complete Historic debacle this is then you might understand why people are and should walkaway. Point the finger at the culprits like FNMA, Freddie Mac, Greenspan, Clinton, Bush,
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by Yellowbird77 May 28, 2010 1:59 PM EDT
Nobody makes a move to change the deal until they're deeply in financial trouble.

So why is it that this administration doesn't seem to understand that if you bail out one party (the banks) you remove their NEED TO DEAL. If the bail out were passed on to the OTHER PARTY, there would be a much quicker resolution to this problem.

So the error the Administration has made is to bail out the banks. They should have been left out in the cold to sink or swim.... or better put? To DEAL WITH THE BUYERS on a more level playing field.

It is a shameful thing that Banks are more important than people in America.
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by DC_Balt_man May 27, 2010 11:02 PM EDT
Hi. The program said that 9 states do not enable banks to go after your personal assets in this 'walk away' scenario. how can you find that list of 9 states? thanks
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by wall_girl May 27, 2010 2:39 PM EDT
Why is every one being so nasty to each other? I like the person who said, "walk in my shoes". We had no choice, my husband lost his job (for the third time) and we had to move clear across the country so we could not afford to keep our home. And we paid our mortgage all the way up until the short sale went through Oh we tried to keep it, even had tenants.... who ended up bouncing half the rent checks. Then we racked up so much credit card debt the 5 months he was out of work, with just having had our second child as well, that we're just trying to pay that off now and hope that someday we can save again... for anything.
We have NEVER been late on credit card bills and now the credit card companies sure can find a way to screw you on those! Let's talk about them!
I don't know that much about the banks and the economy and who's fault it all is, but if we're not civil to each other, if we can't have some kind of compassion for each individual's story, then how can we get past anything? The media always focuses on whose fault it all is, we're always looking to blame. But that one guy feels he's putting his families needs first and that's what's important to him, then why judge? Besides, who lives in one place for 30+ years anymore? Is there any where in this country with jobs that stable? Even if you're highly educated? I don't think so.
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by jrob816 May 24, 2010 10:19 PM EDT
And regarding these "dirty deals that were dealt them". Why are people so often not taking responsibility for their actions. Who forced them to buy? and why do they think they should have it all right away.
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by jrob816 May 24, 2010 10:14 PM EDT
Who do these people who walk away think is picking up the tab?? WE ARE. Fannie Mae and Freddie Mac guarantee or write over 50% of the mortgages. And they've been getting taxpayer bailout money - when all is done it's expected to be about 145 BILLION dollars. So when people who are fully capable of paying their mortgage walk away we all pay the price. There are many hardworking people who cannot pay and are left with no choice. those are understandable. But for those who walk away by choice? You're freeloaders - stealing money out of honest taxpayer's pockets. A contract is binding; not just a whim. & unless you incredibly overpaid or bought a dump (and whose choice was that?) values will come back eventually!
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