USA I'm walking from my underwater mortgage

[ears2hear]

One other point, according to the OP, she stopped paying in Sept. of '08. If she stays until June of 2010, that's 22 months of mortgage-free living.

Based on her mortgage payments, that's $31,900.00 additional funds she has saved herself. Put that with the $54,000, and that's a WHOLE lot of money!

[Brutus]

Originally Posted by etc

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.

Originally Posted by etc

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.

Originally Posted by etc

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.

Originally Posted by etc

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.

Originally Posted by etc

This is the missing link, we need to get familiar with Fractional Reserve Banking.

See, the Bank doesn't really loan *anything*, they pretend to make a loan, but in actuality use other people's deposits to fund this so called "loan". They loan nothing, literally and risk nothing. But *you* pay back "real" FRNs. They only shuffle 0s on the computer databases.

Has been this way for most of 20th century.

We are a little slow, aren't we?

It's not like the bank has a bag full of silver coins with you name on it approved to loan you, that they give you and a Note.

this is not 19th century anymore, better wake up to the realities of things.

It's fraud through and through.

But the banks got a mountain of FRNs to bail *them* out. Have you seen a pic of a trillion FRNs. It's completely astounding, it's orders of magnitude bigger than a "billion".

They stole from you, so your kids might go hungry but the elites will fly in private jets, eat black caviar with wine and look down upon us starving J6Ps.

Clearly, it's every man for himself now. Get what you can off the dying carcass that used to be the Republic, soon there won't be even that.

It's foolish to the extreme to play by their rules that can only lead to your defeat.

Remember Greenspan's book Irrational Exuberance. Irrational My @ss. It's perfectly rational. People like rats respond to stimuli. They were stimulated to borrow debt up to their eyeballs. Now it's irrational? If you saved, you were penalized. So this person is a product of the System, aren't we all?

The real collapse will come when the man on the street, you know J6P will realize that he is never getting any entitlements he paid into, like SS and stuff, estimate how much he paid into the non-existent system and just claim his own.

Me thinks TSHTF is right around the corner.

Originally Posted by etc

Actually they do just that. The gun is the depreciating FRNs. If you save, you are penalized. If you invest in bubbles, you do well. The system rewards risk and fraud and mal-investment and bubbles. If you save FRNs under your mattress, you are beyond St00pid, because one day you wake you with a pile of paper fit to start a fire in your fireplace.

And so they respond to the stimuli. The FRS is far worse than a "gun", it shapes behavior of the whole Society, and you know what else? It re-engineers the society on its cultural level. We are just rats in an experiment.

Time to get used to some basic realities, how about investing 20 FRNs in some edumacational literature such as The Creature from Jekyll Island.

Originally Posted by etc

Right , not only that, but *most* of the payments they are interest only.

Reminds me why I will *never* buy a house on a Note. Only if I get enough cash together, and since that's about as likely as a dog learning to read Shakespeare, I suppose I will rent for the rest of my life, instead of playing their Fractional REserve Banking game and living in fear for the rest of my life.

These stories are exactly the reason I have my worldviews. It's the worst case scenario, for sure.

Originally Posted by etc

come to think of it, the banks should have all failed.... but the fact they were bailed out with *your* funds, sends a message to them that it pays to be reckless and go into risky situations.

In fact the prudent banks, conservative ones, cannot compete with this climate and are destroyed.

These bailouts *insure* we will have more of the same. When I don't know. 10 years. 20 years? Same olde sheet for sure. Pos reinforcement for criminal behavior, perpetuating this behavior. Poor Joe Six Pack too stupid to see how bread is stolen from his plate in front of him.

Originally Posted by etc

Right... if they failed, they would have gotten the message that criminal behavior is not supported, instead they got the opposite mesg, now matter what they do, they will be bailed out.

this practically insures there will be much more of this.

Originally Posted by etc

the gov is the only agency that can take valuable resources such as ink and paper and make them worthless.

I really can't recall the last time I saw a poster who had so much time to post and so little of value to offer.



etc, no matter whether you flood the thread with your "bankster" conspiracy theories or not, it doesn't make anyone more likely to listen to you.

[Hacker]

Originally Posted by Brutus

I really can't recall the last time I saw a poster who had so much time to post and so little of value to offer.



etc, no matter whether you flood the thread with your "bankster" conspiracy theories or not, it doesn't make anyone more likely to listen to you.

You don't believe that the banksters are the real crooks here?

I suggest that you read this: http://www.amazon.com/They-Own-All-I...5131688&sr=1-1

It will profoundly change the way you look at our currency. I promise that you will be amazed.

[Hacker]

Originally Posted by Brutus

I really can't recall the last time I saw a poster who had so much time to post and so little of value to offer.



etc, no matter whether you flood the thread with your "bankster" conspiracy theories or not, it doesn't make anyone more likely to listen to you.

This is also a very important book: http://www.amazon.com/Creature-Jekyl...5131919&sr=1-1

[Burntfish]

Originally Posted by Fisher

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.
...
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.
...
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.

A 30 year mortgage for $154,000 at current rates (i.e. 5.2%) should be about $950 a month. If the banks would refinance at current rates they would not have to repossess so many houses...the bank would only get about $100,000 (if that) at auction, so refinancing would benefit them and the owner.

There is no way that a single mother on unemployment can afford a house payment of $1450 a month. That probably equals the total amount she gets from unemployment compensation.

I'm not saying that she was smart to refinance her house for $154,000, but the bank has to take a large part of the blame. They are supposed to be doing due diligence when loaning money.

[Milk-maid]

So some here seem to think it is OK to use the house as a cash register, take a bunch more money from the bank and then walk away?

This is so wrong on so many levels. That house didn't suddenly fall apart one day, she's probably had things that needed repair since she first bought it. She could have taken that money and put it back into the house and fixed it.

I am convinced, there are people out there that should never be homeowners. They take no responsibility for their actions.

She's stupid and deserves to be homeless.

[jba4241]

BTW, if here second mortgage was with some place like Ditech, chances are her interest rate on that loan was more akin to a credit card, such as 12-14%. That was the common interest rate Ditech was offering a couple years back.

Undead: I do rent.

[jba4241]

deleted

[pastprime]

One question I'm left with is now much credit card debt did she run up, and subsequently pay off, perhaps with her refinancing money? That figure might give a clue as to her ability to handle money too, although the figures revealed tell me she wanted to pretend to be more financially secure than she actually was.

I remember being advised to buy a house that we could afford on one income, with 25% of that figure per month, in case one of us got sick. Old-fashioned thinking today, but that is what we did.

Only based on reading over the years, I think Fannie Mae/Freddie Mac/Barnie Frank encouraged no/low interest loans in areas that banks had formerly red-lined because they knew these neighborhoods could not afford mortgages. Why? Who knows. My guess would be to keep the economic charade going for the nation, all the while knowing it would eventually collapse.

[undead]

Originally Posted by Burntfish

A 30 year mortgage for $154,000 at current rates (i.e. 5.2%) should be about $950 a month. If the banks would refinance at current rates they would not have to repossess so many houses...the bank would only get about $100,000 (if that) at auction, so refinancing would benefit them and the owner.

There is no way that a single mother on unemployment can afford a house payment of $1450 a month. That probably equals the total amount she gets from unemployment compensation.

I'm not saying that she was smart to refinance her house for $154,000, but the bank has to take a large part of the blame. They are supposed to be doing due diligence when loaning money.

Where does it say that she was unemployed when it was refinanced?????

[blueridge]

"...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...."



And what, exactly, did she do with the cash taken out of the ATM, er...home?

How much were the payments before that transaction?

[intothatgoodnight]

http://www.nytimes.com/2010/02/03/bu...html?th&emc=th

No Help in Sight, More Homeowners Walk Away

By DAVID STREITFELD

Published: February 2, 2010

In 2006, Benjamin Koellmann bought a condominium in Miami Beach. By his calculation, it will be about the year 2025 before he can sell his modest home for what he paid. Or maybe 2040

“People like me are beginning to feel like suckers,” Mr. Koellmann said. “Why not let it go in default and rent a better place for less?”

After three years of plunging real estate values, after the bailouts of the bankers and the revival of their million-dollar bonuses, after the Obama administration’s loan modification plan raised the expectations of many but satisfied only a few, a large group of distressed homeowners is wondering the same thing.

New research suggests that when a home’s value falls below 75 percent of the amount owed on the mortgage, the owner starts to think hard about walking away, even if he or she has the money to keep paying.

In a situation without precedent in the modern era, millions of Americans are in this bleak position. Whether, or how, to help them is one of the biggest questions the Obama administration confronts as it seeks a housing policy that would contribute to the economic recovery.

“We haven’t yet found a way of dealing with this that would, we think, be practical on a large scale,” the assistant Treasury secretary for financial stability, Herbert M. Allison Jr., said in a recent briefing.

The number of Americans who owed more than their homes were worth was virtually nil when the real estate collapse began in mid-2006, but by the third quarter of 2009, an estimated 4.5 million homeowners had reached the critical threshold, with their home’s value dropping below 75 percent of the mortgage balance.

They are stretched, aggrieved and restless. With figures released last week showing that the real estate market was stalling again, their numbers are now projected to climb to a peak of 5.1 million by June — about 10 percent of all Americans with mortgages.

“We’re now at the point of maximum vulnerability,” said Sam Khater, a senior economist with First American CoreLogic, the firm that conducted the recent research. “People’s emotional attachment to their property is melting into the air.”

Suggestions that people would be wise to renege on their home loans are at least a couple of years old, but they are turning into a full-throated barrage. Bloggers were quick to note recently that landlords of an 11,000-unit residential complex in Manhattan showed no hesitation, or shame, in walking away from their deeply underwater investment.

“Since the beginning of December, I’ve advised 60 people to walk away,” said Steve Walsh, a mortgage broker in Scottsdale, Ariz. “Everyone has lost hope. They don’t qualify for modifications, and being on the hamster wheel of paying for a property that is not worth it gets so old.”

Mr. Walsh is taking his own advice, recently defaulting on a rental property he owns. “The sun will come up tomorrow,” he said.

The difference between letting your house go to foreclosure because you are out of money and purposefully defaulting on a mortgage to save money can be murky. But a growing body of research indicates that significant numbers of borrowers are declining to live under what some waggishly call “house arrest.”

Using credit bureau data, consultants at Oliver Wyman calculated how many borrowers went straight from being current on their mortgage to default, rather than making spotty payments. They also weeded out owners having trouble paying other bills. Their estimate was that about 17 percent of owners defaulting in 2008, or 588,000 people, chose that option as a strategic calculation.

Some experts argue that walking away from mortgages is more discussed than done. People hate moving; their children attend the neighborhood school; they do not want to think of themselves as skipping out on a debt. Doubters cite a Federal Reserve study using historical data from Massachusetts that concludes there were relatively few walk-aways during the 1991 bust.

The United States Treasury falls into the skeptical camp.

“The overwhelming bulk of people who have negative equity stay in their homes and keep paying,” said Michael S. Barr, assistant Treasury secretary for financial institutions.

It would cost about $745 billion, slightly more than the size of the original 2008 bank bailout, to restore all underwater borrowers to the point where they were breaking even, according to First American.

Using government money to do that would be seen as unfair by many taxpayers, Mr. Barr said. On the other hand, doing nothing about underwater mortgages could encourage more walk-aways, dealing another blow to a fragile economy.

“It’s not an easy area,” he said.

Walking away — also called “jingle mail,” because of the notion that homeowners just mail their keys to the bank, setting off foreclosure proceedings — began in the Southwest during the 1980s oil collapse, though it has never been clear how widespread it was.

In the current bust, lenders first noticed something strange after real estate prices had fallen about 10 percent.

An executive with Wachovia, one of the country’s biggest and most aggressive lenders, said during a conference call in January 2008 that the bank was bewildered by customers who had “the capacity to pay, but have basically just decided not to.” (Wachovia failed nine months later and was bought by Wells Fargo. )

With prices now down by about 30 percent, underwater borrowers fall into two groups. Some have owned their homes for many years and got in trouble because they used the house as a cash machine. Others, like Mr. Koellmann in Miami Beach, made only one mistake: they bought as the boom was cresting.

It was April 2006, a moment when the perpetual rise of real estate was considered practically a law of physics. Mr. Koellmann was 23, a management consultant new to Miami.

Financially cautious by nature, he bought a small, plain one-bedroom apartment for $215,000, much less than his agent told him he could afford. He put down 20 percent and received a fixed-rate loan from Countrywide Financial.

Not quite four years later, apartments in the building are selling in foreclosure for $90,000.

“There is no financial sense in staying,” Mr. Koellmann said. With the $1,500 he is paying each month for his mortgage, taxes and insurance, he could rent a nicer place on the beach, one with a gym, security and valet parking.

Walking away, he knows, is not without peril. At minimum, it would ruin his credit score. Mr. Koellmann would like to attend graduate school. If an admission dean sees a dismal credit record, would that count against him? How about a new employer?

Most of all, though, he struggles with the ethical question.

“I took a loan on an asset that I didn’t see was overvalued,” he said. “As much as I would like my bank to pay for that mistake, why should it?”

That is an attitude Wall Street would like to encourage. David Rosenberg, the chief economist of the investment firm Gluskin Sheff, wrote recently that borrowers were not victims. They “signed contracts, and as adults should also be held accountable,” he wrote.

Of course, this is not necessarily how Wall Street itself behaves, as demonstrated by the case of Stuyvesant Town and Peter Cooper Village. An investment group led by the real estate giant Tishman Speyer recently defaulted on $4.4 billion in debt that it had used to buy the two apartment developments in Manhattan, handing the properties back to the lenders.

Moreover, during the boom, it was the banks that helped drive prices to unrealistic levels by lowering credit standards and unleashing a wave of speculative housing demand.

Mr. Koellmann applied last fall to Bank of America for a modification, noting that his income had slipped. But the lender came back a few weeks ago with a plan that added more restrictive terms while keeping the payments about the same.

“That may have been the last straw,” Mr. Koellmann said.

Guy D. Cecala, publisher of Inside Mortgage Finance magazine, says he does not hear much sympathy from lenders for their underwater customers.

“The banks tell me that a lot of people who are complaining were the ones who refinanced and took all the equity out any time there was any appreciation,” he said. “The banks are damned if they will help.”

Joe Figliola has heard that message. He bought his house in Elgin, Ill., in 2004, then refinanced twice to get better terms. He pulled out a little money both times to cover the closing costs and other expenses. Now his place is underwater while his salary as circulation manager for the local newspaper has been cut.

“It doesn’t seem right that I can rent a place somewhere for half of what I’m paying,” he said. “I told my bank, ‘Just take a little bite out of what I owe. That would ease me up. Isn’t that why the president gave you all this money?’ ”

Bank of America did not agree, so Mr. Figliola, who is 48, sees no recourse other than walking away. “I don’t believe this is the right thing to do,” he said, “but I’ve got to survive.”

[Brutus]

Originally Posted by intothatgoodnight

http://www.nytimes.com/2010/02/03/bu...html?th&emc=th

No Help in Sight, More Homeowners Walk Away

By DAVID STREITFELD

Published: February 2, 2010

In 2006, Benjamin Koellmann bought a condominium in Miami Beach. By his calculation, it will be about the year 2025 before he can sell his modest home for what he paid. Or maybe 2040

“People like me are beginning to feel like suckers,” Mr. Koellmann said. “Why not let it go in default and rent a better place for less?”

After three years of plunging real estate values, after the bailouts of the bankers and the revival of their million-dollar bonuses, after the Obama administration’s loan modification plan raised the expectations of many but satisfied only a few, a large group of distressed homeowners is wondering the same thing.

New research suggests that when a home’s value falls below 75 percent of the amount owed on the mortgage, the owner starts to think hard about walking away, even if he or she has the money to keep paying.

In a situation without precedent in the modern era, millions of Americans are in this bleak position. Whether, or how, to help them is one of the biggest questions the Obama administration confronts as it seeks a housing policy that would contribute to the economic recovery.

“We haven’t yet found a way of dealing with this that would, we think, be practical on a large scale,” the assistant Treasury secretary for financial stability, Herbert M. Allison Jr., said in a recent briefing.

The number of Americans who owed more than their homes were worth was virtually nil when the real estate collapse began in mid-2006, but by the third quarter of 2009, an estimated 4.5 million homeowners had reached the critical threshold, with their home’s value dropping below 75 percent of the mortgage balance.

They are stretched, aggrieved and restless. With figures released last week showing that the real estate market was stalling again, their numbers are now projected to climb to a peak of 5.1 million by June — about 10 percent of all Americans with mortgages.

“We’re now at the point of maximum vulnerability,” said Sam Khater, a senior economist with First American CoreLogic, the firm that conducted the recent research. “People’s emotional attachment to their property is melting into the air.”

Suggestions that people would be wise to renege on their home loans are at least a couple of years old, but they are turning into a full-throated barrage. Bloggers were quick to note recently that landlords of an 11,000-unit residential complex in Manhattan showed no hesitation, or shame, in walking away from their deeply underwater investment.

“Since the beginning of December, I’ve advised 60 people to walk away,” said Steve Walsh, a mortgage broker in Scottsdale, Ariz. “Everyone has lost hope. They don’t qualify for modifications, and being on the hamster wheel of paying for a property that is not worth it gets so old.”

Mr. Walsh is taking his own advice, recently defaulting on a rental property he owns. “The sun will come up tomorrow,” he said.

The difference between letting your house go to foreclosure because you are out of money and purposefully defaulting on a mortgage to save money can be murky. But a growing body of research indicates that significant numbers of borrowers are declining to live under what some waggishly call “house arrest.”

Using credit bureau data, consultants at Oliver Wyman calculated how many borrowers went straight from being current on their mortgage to default, rather than making spotty payments. They also weeded out owners having trouble paying other bills. Their estimate was that about 17 percent of owners defaulting in 2008, or 588,000 people, chose that option as a strategic calculation.

Some experts argue that walking away from mortgages is more discussed than done. People hate moving; their children attend the neighborhood school; they do not want to think of themselves as skipping out on a debt. Doubters cite a Federal Reserve study using historical data from Massachusetts that concludes there were relatively few walk-aways during the 1991 bust.

The United States Treasury falls into the skeptical camp.

“The overwhelming bulk of people who have negative equity stay in their homes and keep paying,” said Michael S. Barr, assistant Treasury secretary for financial institutions.

It would cost about $745 billion, slightly more than the size of the original 2008 bank bailout, to restore all underwater borrowers to the point where they were breaking even, according to First American.

Using government money to do that would be seen as unfair by many taxpayers, Mr. Barr said. On the other hand, doing nothing about underwater mortgages could encourage more walk-aways, dealing another blow to a fragile economy.

“It’s not an easy area,” he said.

Walking away — also called “jingle mail,” because of the notion that homeowners just mail their keys to the bank, setting off foreclosure proceedings — began in the Southwest during the 1980s oil collapse, though it has never been clear how widespread it was.

In the current bust, lenders first noticed something strange after real estate prices had fallen about 10 percent.

An executive with Wachovia, one of the country’s biggest and most aggressive lenders, said during a conference call in January 2008 that the bank was bewildered by customers who had “the capacity to pay, but have basically just decided not to.” (Wachovia failed nine months later and was bought by Wells Fargo. )

With prices now down by about 30 percent, underwater borrowers fall into two groups. Some have owned their homes for many years and got in trouble because they used the house as a cash machine. Others, like Mr. Koellmann in Miami Beach, made only one mistake: they bought as the boom was cresting.

It was April 2006, a moment when the perpetual rise of real estate was considered practically a law of physics. Mr. Koellmann was 23, a management consultant new to Miami.

Financially cautious by nature, he bought a small, plain one-bedroom apartment for $215,000, much less than his agent told him he could afford. He put down 20 percent and received a fixed-rate loan from Countrywide Financial.

Not quite four years later, apartments in the building are selling in foreclosure for $90,000.

“There is no financial sense in staying,” Mr. Koellmann said. With the $1,500 he is paying each month for his mortgage, taxes and insurance, he could rent a nicer place on the beach, one with a gym, security and valet parking.

Walking away, he knows, is not without peril. At minimum, it would ruin his credit score. Mr. Koellmann would like to attend graduate school. If an admission dean sees a dismal credit record, would that count against him? How about a new employer?

Most of all, though, he struggles with the ethical question.

“I took a loan on an asset that I didn’t see was overvalued,” he said. “As much as I would like my bank to pay for that mistake, why should it?”

That is an attitude Wall Street would like to encourage. David Rosenberg, the chief economist of the investment firm Gluskin Sheff, wrote recently that borrowers were not victims. They “signed contracts, and as adults should also be held accountable,” he wrote.

Of course, this is not necessarily how Wall Street itself behaves, as demonstrated by the case of Stuyvesant Town and Peter Cooper Village. An investment group led by the real estate giant Tishman Speyer recently defaulted on $4.4 billion in debt that it had used to buy the two apartment developments in Manhattan, handing the properties back to the lenders.

Moreover, during the boom, it was the banks that helped drive prices to unrealistic levels by lowering credit standards and unleashing a wave of speculative housing demand.

Mr. Koellmann applied last fall to Bank of America for a modification, noting that his income had slipped. But the lender came back a few weeks ago with a plan that added more restrictive terms while keeping the payments about the same.

“That may have been the last straw,” Mr. Koellmann said.

Guy D. Cecala, publisher of Inside Mortgage Finance magazine, says he does not hear much sympathy from lenders for their underwater customers.

“The banks tell me that a lot of people who are complaining were the ones who refinanced and took all the equity out any time there was any appreciation,” he said. “The banks are damned if they will help.”

Joe Figliola has heard that message. He bought his house in Elgin, Ill., in 2004, then refinanced twice to get better terms. He pulled out a little money both times to cover the closing costs and other expenses. Now his place is underwater while his salary as circulation manager for the local newspaper has been cut.

“It doesn’t seem right that I can rent a place somewhere for half of what I’m paying,” he said. “I told my bank, ‘Just take a little bite out of what I owe. That would ease me up. Isn’t that why the president gave you all this money?’ ”

Bank of America did not agree, so Mr. Figliola, who is 48, sees no recourse other than walking away. “I don’t believe this is the right thing to do,” he said, “but I’ve got to survive.”

Just more deadbeat f***ers.

They think that they're entitled to walk away from their stupid mistakes simply because their whiny deadbeat asses think so.

And what kind of el stupido m'fer pays $215,000 for a one-bedroom apartment anyway?

Jeez Louise!