djc
01-24-2008, 09:37 PM
http://latimesblogs.latimes.com/laland/images/2008/01/23/34868858.jpg (http://latimesblogs.latimes.com/.shared/image.html?/photos/uncategorized/2008/01/23/34868858.jpg)A homeowner who can't sell his house tells the L.A.Times, (http://www.latimes.com/business/la-fi-foreclosures23jan23,1,6863107.story?coll=la-headlines-business) "Foreclose me. ... I'll live in the house for free for 12 months, and I'll save my money and I'll move on."
Banks and lenders fear this kind of thinking -- that walking away from a house could be the smart economic move -- appears to be on the rise.
Wachovia, in a conference call yesterday (http://calculatedrisk.blogspot.com/2008/01/wachovia-homeowners-just-walking-away.html), warned investors that increasing numbers of homeowners are walking away from their homes by choice: "... people that have otherwise had the capacity to pay, but have basically just decided not to because they feel like they've lost equity, value in their properties..."
Calculated Risk (http://calculatedrisk.blogspot.com/2008/01/wachovia-homeowners-just-walking-away.html) notes this is "one of the greatest fears for lenders ... that it will become socially acceptable for upside down middle class Americans to walk away from their homes."
A commenter on L.A. Land this morning writes (http://latimesblogs.latimes.com/laland/2008/01/when-homeowners.html#comments), "I am one of these people. My condo has dropped in value from $520K in 5/06 when I bought it to $350K now. My ARM payment will probably go up $900 per month in June.
"Despite all this, I would be willing to stay if the bank would refi the loans to a 30 year fixed, but since I'm not a 'hardship' case they'd apparently rather foreclose. I guess the only way I could qualify for loan mitigation is to get my boss to fire me, stop making payments, and wreck my credit. In fact, my bank won't even talk to me until I miss a couple of payments.
"I have purchased a cheaper place in a nearby area now, while my credit is good, and will stop making payments on house #1 after house #2 closes. I know the foreclosure will be on my credit for 7 years, but I will have saved a lot of money.
http://latimesblogs.latimes.com/laland/2008/01/a-tipping-point.html
---
Irresponsible people making irresponsible financial decisions, then walking away and stiffing the 'big evil corporation'.
awesome!
Banks and lenders fear this kind of thinking -- that walking away from a house could be the smart economic move -- appears to be on the rise.
Wachovia, in a conference call yesterday (http://calculatedrisk.blogspot.com/2008/01/wachovia-homeowners-just-walking-away.html), warned investors that increasing numbers of homeowners are walking away from their homes by choice: "... people that have otherwise had the capacity to pay, but have basically just decided not to because they feel like they've lost equity, value in their properties..."
Calculated Risk (http://calculatedrisk.blogspot.com/2008/01/wachovia-homeowners-just-walking-away.html) notes this is "one of the greatest fears for lenders ... that it will become socially acceptable for upside down middle class Americans to walk away from their homes."
A commenter on L.A. Land this morning writes (http://latimesblogs.latimes.com/laland/2008/01/when-homeowners.html#comments), "I am one of these people. My condo has dropped in value from $520K in 5/06 when I bought it to $350K now. My ARM payment will probably go up $900 per month in June.
"Despite all this, I would be willing to stay if the bank would refi the loans to a 30 year fixed, but since I'm not a 'hardship' case they'd apparently rather foreclose. I guess the only way I could qualify for loan mitigation is to get my boss to fire me, stop making payments, and wreck my credit. In fact, my bank won't even talk to me until I miss a couple of payments.
"I have purchased a cheaper place in a nearby area now, while my credit is good, and will stop making payments on house #1 after house #2 closes. I know the foreclosure will be on my credit for 7 years, but I will have saved a lot of money.
http://latimesblogs.latimes.com/laland/2008/01/a-tipping-point.html
---
Irresponsible people making irresponsible financial decisions, then walking away and stiffing the 'big evil corporation'.
awesome!