USA I'm walking from my underwater mortgage

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I'm walking from my underwater mortgage
By JANET SPEER
Last Updated: 7:34 PM, January 31, 2010
Posted: 4:34 AM, January 31, 2010

I stopped paying my $1,450-a-month mortgage on my 200-year-old, four-bedroom home in September 2008 -- after making the hard decision to walk away from my mortgage because it is hopelessly underwater.

It is not an easy decision to walk away from your home, and in the beginning I actually felt like a loser. That was the hardest part.

You see, I was raised to live up to my financial responsibilities. I was taught plenty about personal responsibility. But in this case I had no practical solutions to my financial dilemma -- I lost my job, was turned down for a mortgage modification and owed a lot more than the house is worth.

I am a single parent with three children, one with medical issues. So, with only unemployment benefits and child-support money, I decided to pull the plug on my mortgage payments.

Thus ended my financial commitment to the place we've called home for seven years. But I have no regrets. It wasn't the American Dream -- I moved here after my divorce.

This house originally cost $100,000. In 2005, as the housing market heated up and I needed cash, I refinanced it. An appraiser said it was worth $154,000 -- which I thought was too high but nonetheless accepted. I cashed out the house at that value.

Today, with the housing market in bad shape, the house is worth about $120,000. On top of that, it is starting to fall apart. Several thousand dollars worth of repairs here; a thousand dollars there -- it all adds up. At 51, I am in no condition to do the repairs myself, with a bad leg and a touch of arthritis. Why would I invest my money, anyway, on a declining asset I never intend to own?

The main toilet is broken upstairs; the roof is leaking into the kitchen ceiling, the ceiling is falling down. The floor in the back room is coming apart.

I used the money I accumulated from not paying the mortgage to pay off all my credit-card debt and clean up all my other debt -- except for the house.

The lenders flat out refused to modify the loan, and now I am too far behind to catch up. I am sure my credit score is affected. But I hope the credit agencies will take my special circumstances into account and give me a break.

Sometimes, sitting in the living room in the still of night, it breaks my heart, thinking about what could have been. This place offered a pretty good home to the kids, and it still looks kind of nice. But the kids' stuff is packed away neatly ready to be taken away. We want to move into a two-bedroom apartment in the area.

I feel no shame. I am not suicidal. When I think of what really counts, I do not think of money; I think about the health of my children. Besides I am not the only one.

Not too many people around my neighborhood are aware of my predicament, at least not until now. There are no foreclosure signs up -- because there is no bank forcing it. I am getting advice from a company that specializes in my situation, a situation shared by a growing number of folks just like me. It's called -- get this -- You Walk Away.

I am single and dating again. How do you tell people, "I am going to walk away from this house?" Some did react strangely when I first said that -- but others are supportive.

Whatever the case, I am ready to go. I hope to be out of here by the summer. I want to get this over with.

As told to John Aidan Byrne

IMO, this 'person' is nothing more than a common thief.

Took money from a bank, and RAN away from a promise to pay it back.

In 2005, as the housing market heated up and I needed cash, I refinanced it. An appraiser said it was worth $154,000 -- which I thought was too high but nonetheless accepted. I cashed out the house at that value.

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I just don't buy into the loser mentality here....pity me and let me slide out from all of my damn obligations and such.

Common thievery, only won't have to go to jail for it.

BFC

This person did the right and hard thing to do. The lenders would not mod the terms so stop payment.
btw The lenders wont lose out.. they will get paid no matter what.
To say this guy is a loser and a thief.. sucks like hell this coming from a former lender.. grow up man.

IDK said:

This person did the right and hard thing to do. The lenders would not mod the terms so stop payment.
btw The lenders wont lose out.. they will get paid no matter what.
To say this guy is a loser and a thief.. sucks like hell this coming from a former lender.. grow up man.

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Well I'd be willing to bet that if some druggie stuck a pistol in your face and stole your last five bucks out of your wallet that you'd be screaming for the cops......

Lessee, five bucks stolen versus $154k.....stealin is stealin. Took it and someone lost it. Didn't come outa thin air nor grow on trees ya know?

Yeah, the lenders get paid. With taxpayers money I bet. Which means that the money actually comes from ME. But then I forgot about all of the banks going under because of people just walkin away......

Yeah, I'll grow up. Sure.

BFC

It matters in which state the home was sold, whether this person got a mortgage or a deed of trust and WHICH WAY the creditor is going to try to pursue their options under the contract AS A MORTGAGE, OR AS A DEED OF TRUST.

There are advantages and disadvantages to each method for the creditor AND for the borrower.

Fisher said:

This house originally cost $100,000. In 2005, as the housing market heated up and I needed cash, I refinanced it. An appraiser said it was worth $154,000 -- which I thought was too high but nonetheless accepted. I cashed out the house at that value.

Today, with the housing market in bad shape, the house is worth about $120,000.

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When the house 'appreciates' 54% he takes the cash

But when it 'depreciates' 20% he walks?

Thats weak

If his state allows a deficiency judgment on the difference- thats stupid.

BigFootsCousin said:

IMO, this 'person' is nothing more than a common thief.

Took money from a bank, and RAN away from a promise to pay it back.

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No he didn't. You want to talk legal technicalities? I will spell it out for you.

The Federal REserve Note is NOT money, no dollars involved. NO money was borrowed, in fact no FRNs were borrowed as the debt was created out of thin air. That's right, they punch a few keyboard keys and that's it. There is NO little pot of gold sitting in the bank with your name on it.


All the fiat currency has been created out of thin air - and will disappear there some day.

This is not 1908 or something, time to adjust the thinking to modern day realities.

BigFootsCousin said:

Common thievery, only won't have to go to jail for it.

BFC

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That hits the nail on the head. The big banksters that is. Robbing us in the broad daylight. We The People too st00pid to realize it. While Joe Six Pack on the street is having a hard time putting food on the table, the bankster mafia is buying islands and private jets.

Keep working, keep working.

As for OP, I have a hard time feeling sympathy - divorce is never "good", never. It's the Catholic moral standards I suppose and they are right. The longer I live, the more I see this truth. People's lives becoming absolute train wrecks, especially lives of their kids.

Left the husband with 3 kids, having a hard time supporting herself, oh pity. I think I will cry now. Should have thought about it years ago. Got exactly what she deserved. It's the liberal no fault divorce laws that got her there and her own issues.

IMO, this 'person' is nothing more than a common thief.

This person is a pawn.

The Government/Banks set this in motion years ago as the ultimate land grab. Can't have private property ownership if we're being hijacked to Marxism/Communism/Socialism. The joke is they created the rules easing standards, printed the funny money to juice the process then reloaded the banks coffers enabling them to "hold" their foreclosures "through this mess".
The ultimate recipient will be the Feral Government. The recently established surfs will pay generations deep through taxes while having minimal representation if ever again, short of uprising.

The residential lands accumulated will join the other seized Federal lands through 0 tolerance, or EPA, wetlands, for example.

kz

Right... get everyone in debt, then pull the plug in instant paper prosperity and repossess all the stuff for pennies.

It's 1929 times 10.

bradley c. Bower/NY POST
Janet Speer in front of her suburban Philadelphia home, which is worth less than she owes on her mortgage. She decided her best bet, financially, is to walk away from the loan and give the house back to the bank.



Personally, I think the bank SHOULD have worked with her considering not only her circumstances but because of the current state of American affairs, which is Failed banks, and lack of jobs.

knowzone said:

IMO, this 'person' is nothing more than a common thief.

This person is a pawn.

The Government/Banks set this in motion years ago as the ultimate land grab. Can't have private property ownership if we're being hijacked to Marxism/Communism/Socialism. The joke is they created the rules easing standards, printed the funny money to juice the process then reloaded the banks coffers enabling them to "hold" their foreclosures "through this mess".
The ultimate recipient will be the Feral Government. The recently established surfs will pay generations deep through taxes while having minimal representation if ever again, short of uprising.

The residential lands accumulated will join the other seized Federal lands through 0 tolerance, or EPA, wetlands, for example.

kz

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If one were the conspiratorial type you would have to wonder why they keep publishing these articles. It is almost if they are trying to convince people that it is okay to walk away. Very sympathetic articles where the person walking is painted in a good light. Not that I blame them at all for walking, but I am seeing more and more articles making it seem okay to walk away from your debts.

Quote from the article:

"The main toilet is broken upstairs; the roof is leaking into the kitchen ceiling, the ceiling is falling down. The floor in the back room is coming apart."


She bought the home in 2003, in 2005 she took out a second. The house needs repairs that she won't do because she has no money. The repairs listed above are big and safety issues.

I understand people being upside down on their loans, but why wasn't some of the money she took used to make repairs as things went along? Anyone who owns a house knows that things don't stay good forever. It really stinks to have to shell out money to fix things, but that's part of the gig.

I don't make judgments on people's poor decisions because I don't walk in their shoes, but man, I don't get not fixing things that need to be fixed, especially when your hygiene and safety are issues.

A stitch in time saves nine.

etc said:

Right... get everyone in debt, then pull the plug in instant paper prosperity and repossess all the stuff for pennies.

It's 1929 times 10.

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Greed on the part of homeowners for "stuff" ever enter the picture? They don't hold a gun to your head to make you borrow the money. Liberals usually have trouble with personal responsibility, it's always someone elses fault.

She sucked $54,000 out of the house?

And she couldn't pay some handy-man to do the essential repairs.

I don't know how much it would cost but a basic roof is about $4,000 and I can't see more than $2,000 for bathroom repairs. Sure, a fancy new bathroom can run $15,000 or much more but repairs should be much less.

And, she can paint, wall paper, etc.

I don't get it.

Kent said:

Greed on the part of homeowners for "stuff" ever enter the picture? They don't hold a gun to your head to make you borrow the money...

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+2

Plus, not taking the time to review the math before signing on the dotted line. Cashing in equity on your home greatly enhances your chances of going upside down. Bankers loved these types of deals, nearly as much as leasing cars....more cash flow for them, while keeping the equity of the house.

Methinks there's plenty of blame to pass around not only regarding this situation, but the whole mortgage mess.

I see the mortgage as just another contract. Not much different than a cell phone, cable or satellite contract. There's just more to sign on a mortgage and more auxiliary requirements.

In hard times, people advise dropping the cells or cutting the cable, what ever it takes. The difference is that 'ownership' is promised once the 30 year contract is fulfilled, although that ownership also implies a continued financial obligation.

If she paid 7 years on the mortgage, she actually gave the bank roughly half of the money borrowed, only the bank did not post that money against the note and took the absolute majority of the money as profit.

Was she dumb for the refi, sure, but when the cable company calls and offers additional service at a discount for 6 months most people take it with no concern for what happens in the future.

If I borrow money from you and you hand me cash without any contract, etc. I do feel obligated to pay you back. A contract provides a remedy for a failure to pay which actually gives an agreed upon option other than financially completing the contract.

Walking out on the money you gave me on a handshake is a theft, exercising a written option in a business contract is not....

What happened to personal responsibility?

cowards....

I am not feeling much sympathy for this person. The only reason to refinance a mortgage is to get a better interest rate. Unless there is a dire emergency, you should NEVER refinance to be able to pocket extra cash that will not be used to improve the value of the house. There is nothing in the article that says what she did with the $54k. As was pointed out in an earlier post, some of the money could and should have been used to fix house problems like the leaky toilet and roof. She caused her own situation.

etc said:

As for OP, I have a hard time feeling sympathy - divorce is never "good", never. It's the Catholic moral standards I suppose and they are right. The longer I live, the more I see this truth. People's lives becoming absolute train wrecks, especially lives of their kids.

Left the husband with 3 kids, having a hard time supporting herself, oh pity. I think I will cry now. Should have thought about it years ago. Got exactly what she deserved. It's the liberal no fault divorce laws that got her there and her own issues.

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We have no idea why she and her husband divorced. Did she run off, or did he carry on with a floozy, and leave her no choice but to divorce him? We can speculate all we like, but we do not know what happened. And I would argue, that even if the article was clearer about why she divorced, we still wouldn't know whose "fault" it was.

I state you cannot know what goes on in someone else's marriage. And so you can't know whether the person initiating the divorce, is to blame, or whether they were pushed. Think about jobs. If your boss is so horrible to you, that you have to quit, you can still claim for being unfairly dismissed.


Getting back to the article, I do feel she has made some bad choices, but the law allows her to escape her obligations. The trouble is whatever rules/laws we make to "protect" the vulnerable, will be used by rogues to their advantage.

And as we no longer live in villages, where everyone knew each other, it is very difficult for us to work out, how to give help to only those who genuinely need it, and how to refuse help to those who take advantage of us.

Anrol

cory said:

And she couldn't pay some handy-man to do the essential repairs.

I don't know how much it would cost but a basic roof is about $4,000 and I can't see more than $2,000 for bathroom repairs. Sure, a fancy new bathroom can run $15,000 or much more but repairs should be much less.

And, she can paint, wall paper, etc.

I don't get it.

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I agree. One sucks $54,000 (54% of the original value) out of a house and spends it on consumer items. This is a tempory cure to a bigger problem and it only feeds a spending addiction.

At some point the money runs out, so you blame the big bad bank.

There are millions of Americans who live within their means.

Palmetto

This is a business decision. The bank and the owner have a written agreement that governs their relationship. The bank offered to lend the money secured by the house. Now they have the house pursuant to the agreement. They made a bad business decision. Stupidity ought to hurt and when do we make banks pay for their stupidity? Never. Taxpayers pay for bank's stupidity.

According to the article, the woman lost her job. I don't know about you folks, but I'm not sure we could do any different in the same situation. I ain't throwing no stones, my house has too much glass in it.

Are deficiency judgments permitted in Pennsylvania?

Yes. A deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures. This means that the borrower still owes the lender for the difference between what the property sold for at auction and the amount of the original loan. Deficiency actions must be brought within six (6) months of the foreclosure sale.

http://www.foreclosure.com/statelaw_PA.html#6


She may believe that she can walk away from this obligation- but, unless she goes thru a bankruptcy- the bank will attach to her income or what ever assets of hers they can get a hold of.

Banks are difficult to negotiate with when they are in States that allow deficiency judgments on their real estate. If she plans on going TU here- she ought to

1- live in the house as long as she can (it could be well over a year before the foreclosure process boots her)- many banks are putting these off as long as possible due to massive inventory

2- Go thru a bankruptcy at some point in the foreclosure.


I sympathize with her situation;truth is her house (as with all of us) will likely never be worth more than it is now.

Additionally for these banks to receive huge bailouts with taxpayer dollars- then refuse to negotiate w/ folks isn't right.

BillyT said:

If one were the conspiratorial type you would have to wonder why they keep publishing these articles. It is almost if they are trying to convince people that it is okay to walk away. Very sympathetic articles where the person walking is painted in a good light. Not that I blame them at all for walking, but I am seeing more and more articles making it seem okay to walk away from your debts.

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I have to agree. The MSM is clearly sending a message that if your feel like it's too tough, it's OK to walk away from your home. Then ya just have to remember, these MSM are the same people who put Obama in office... conspiracy? Hmmm... So why do they want us out of our homes? In michigan they are buldozing homes to make meadow... do they want our neighborhoods to return to nature and us to live in inner city ghettos?

Btw, this lady got her money out of the house... at least they are honest about that. She also is a terrible tenant who has let her the house go to crap. The roof does not one day start leaking or one day the ceiling falls down ot the back room floor comes apart... these are problems of long term neglect... these are problems that are a long time coming.

BigFootsCousin said:

IMO, this 'person' is nothing more than a common thief.

Took money from a bank, and RAN away from a promise to pay it back.



I just don't buy into the loser mentality here....pity me and let me slide out from all of my damn obligations and such.

Common thievery, only won't have to go to jail for it.

BFC

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You wouldn't just happen to be a disgruntled money lender by any chance?...nah, not sweet lil' ol' you...heaven forbid

Ditto to the above. Some of those who are protesting about what she did might feel a little bit different if you ever found yourself in such circumstances. Lose your spouse, lose your job and face a choice between paying an underwater mortgage or feeding and clothing your kids and see what decision you make.

$1450 per month is a lot for a $150K home. Should have been $800 to $900, plus taxes and insurance. Don't cry for the bank.

The "everyone else is doing it" syndrome will get worse.

Funny that she moved into a 4 bedroom house right out of the divorce but is only NOW considering moving into a 2 bedroom apartment since she's broke and can't/won't pay her mortgage.

Maybe this thieving, irresponsible BITCH should have toned down her expectations a bit and moved into a 2 bedroom apartment to start with.

I too have been brought up to belive you say what you mean, you pay what you owe.

I can see several dimensions to this issue though. The first thing I thought was "There but for the grace of GOD go I".

Circumstances can change and ANYONE can find themselves in a position they can not sustain so I do feel a certain level of empathy.

On the other hand, it was foolish to "cash out" on the equity of the house. No one knows what the future will hold, whether the asset will go up or down in value. If they did know the asset would depreciate, then I agree, it would be tantamount to stealing. Since they couldn't know that, then it was a bad financial decision to put themselves and their family in.

I hold some level of blame to a mortgage company that would rather foreclose than restructure. It seems to me a lot less risk and loss by keeping a person in their house than taking the foreclosure road.

The other problem I had with this is the statement "an asset I never intended to own."

When you buy a house, you own that asset. If you entered into the contract without the intent to honor it then you are engaging in what I think of as fraudulent behavior.

Another naive statement is that maybe the credit score won't be hurt too bad. You can count on several years of bad credit. I don't know of any subjective credit scores, they are a reflection of behavior. They are established to ascertain risk.

If I were a landlord and ran the credit check on this person, I don't believe I would rent or lease a house to them.

NC Susan said:

bradley c. Bower/NY POST
Janet Speer in front of her suburban Philadelphia home, which is worth less than she owes on her mortgage. She decided her best bet, financially, is to walk away from the loan and give the house back to the bank.



Personally, I think the bank SHOULD have worked with her considering not only her circumstances but because of the current state of American affairs, which is Failed banks, and lack of jobs.

Click to expand...

Thank you NC Susan for posting the pic.

Maybe her husband divorced her because she's a fat, ugly bitch.

cory said:

And she couldn't pay some handy-man to do the essential repairs.

I don't know how much it would cost but a basic roof is about $4,000 and I can't see more than $2,000 for bathroom repairs. Sure, a fancy new bathroom can run $15,000 or much more but repairs should be much less.

And, she can paint, wall paper, etc.

I don't get it.

Click to expand...

ditto.

Good luck ever buying another house unless you can find one that is owner financed.

Just another equity farmer. They are everywhere and when they can't do it anymore they call foul. Houses are an investment for the future...that you will have a place to live when you get old. Not that it will buy you toys every year or so.

Many of you are dissing this lady but if you were in her shoes what would you do?

But on the other hand her attitude and priorities don't seem to be right. A house not an investment? C'mon! Where did that refi money go?

Rule No:

1. Live within your means. Buy a house you can afford now, and ten years from now.
2. If you don't plan to live in an area for more than 5 years don't buy property, unless you intend to rent it later.
3. If you refi, that's not a bad thing to take advantage of cheap interest rates, however, never dig deep into the value of your house, leave room for a market fall or devaluation, and always only use the money to improve your house and up the value.

Having said all that, this lady has no moral obligation here. The banks actually win on this. They essentially rented the place to her with profit minus some fail maintenance. Think of it that way. She did pay off her other debt so i give her kudos for being somewhat intelligent.

hokey

Brutus said:

Thank you NC Susan for posting the pic.

Maybe her husband divorced her because she's a fat, ugly bitch.

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I can see it's a tough crowd today...yes, sir.

BigFootsCousin said:

IMO, this 'person' is nothing more than a common thief.

Took money from a bank, and RAN away from a promise to pay it back.



I just don't buy into the loser mentality here....pity me and let me slide out from all of my damn obligations and such.

Common thievery, only won't have to go to jail for it.

BFC

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Bullshit. The mortgage contract spells out what happens if one party fails to uphold their end...the bank gets the house. All spelled out in the contract. There is no theft involved. The banks love it when twisted morals are applied by the ignorant to the situation, morals that don't apply to the banks it seems.

Wait a minute. How is the bank losing a damn thing? They agreed the house was worth the 1st and 2nd mortgage. If they didn't believe that, they should never have agreed to loan her the money.

Why is it the buyer's fault that the housing values plummeted, but the fricking banks (oh, poor little banks) should be paid back? I don't get that mentality. Well, yeah, I do. It's years of Fascist brainwashing. The problem for the banks is we, the people, have finally realized we were part of a big scam.

Stop pitying the banksters. They've stolen billions from us. BILLIONS. All the while, the top executives sit like fat cats in their own mansions literally laughing all the way to the bank.

jba4241 said:

Wait a minute. How is the bank losing a damn thing? They agreed the house was worth the 1st and 2nd mortgage. If they didn't believe that, they should never have agreed to loan her the money.

Why is it the buyer's fault that the housing values plummeted, but the fricking banks (oh, poor little banks) should be paid back? I don't get that mentality. Well, yeah, I do. It's years of Fascist brainwashing. The problem for the banks is we, the people, have finally realized we were part of a big scam.

Stop pitying the banksters. They've stolen billions from us. BILLIONS. All the while, the top executives sit like fat cats in their own mansions literally laughing all the way to the bank.

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The bank has a contract that is quite black-and-white....

X amount of money in equity financing for Y payback by debtor.

The house could just as well have continued to appreciate in value beyond $154,000, in which case the debtor makes out. The opposite happened, but if the debtor just paid on the terms of the loan then they would own the house outright at the end of the loan payments, or outright buy-out of the principal.

Instead, they chose not to.

The bank still lent the extra cash, and by the terms of the contract they are owed what they are owed.

Pretty plain and simple. Simply because "some" bank executives receive excessive compensation does not change the facts.



There is NO scam. Nobody is being forced to buy anything, take out any particular loan, or enter into any particular contract. It will continue to be within the bank's rights to pursue the deficiency. If I sell you a car on payments, and you decide to stop paying on that car because you find it's not worth what you paid for it - you still owe what the agreement called for, and "walking away" does not change that fact.

juco said:

According to the article, the woman lost her job. I don't know about you folks, but I'm not sure we could do any different in the same situation. I ain't throwing no stones, my house has too much glass in it.

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I agree 100% with the above.

Southside

undead said:

The bank has a contract that is quite black-and-white....

X amount of money in equity financing for Y payback by debtor.

The house could just as well have continued to appreciate in value beyond $154,000, in which case the debtor makes out. The opposite happened, but if the debtor just paid on the terms of the loan then they would own the house outright at the end of the loan payments, or outright buy-out of the principal.

Instead, they chose not to.

The bank still lent the extra cash, and by the terms of the contract they are owed what they are owed.

Pretty plain and simple. Simply because "some" bank executives receive excessive compensation does not change the facts.



There is NO scam. Nobody is being forced to buy anything, take out any particular loan, or enter into any particular contract. It will continue to be within the bank's rights to pursue the deficiency. If I sell you a car on payments, and you decide to stop paying on that car because you find it's not worth what you paid for it - you still owe what the agreement called for, and "walking away" does not change that fact.

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The scam was the housing bubble which inflated the prices, and the banks were part of that bubble.

But another thing, it isn't as if that woman (or other home buyers) didn't give money to the bank. She may have put a down payment on the house, and she made payments to the bank. What the bank is losing is INTEREST on the money. And I'm sorry, I have no pity for the bank losing interest like that. You're right. It's black and white. There is a contract. She is breaking the contract, and the bank is doing what the contract says: taking back the property. The bank now has the value of that property. It's not as if the bank is out the full amount of the loan.

I think that's what so many are missing here. The bank is losing interest, but they're gaining the value of the house. Now they're on the hook for any depreciation, and they'll benefit if there is appreciation (LOL, like that's going to happen.) Plus, they received money in the form of payments.

To reiterate, these banks have generally received a substantial sum in payments before a buyer defaults. Let's not forget about THOSE payments.