Walking away from your house/mortgage

When the banks can't even produce the documents that prove they own the mortgage because they've chopped it up and sold parts of it all over Wall Street, and when those same banks are robo-signing thousands of foreclosures a day despite explicit laws that executives must personally review all cases, there's a major structural problem. And it isn't with the guy who got underwater.

And much like the idea that making the banks own up to these bad bets (no bailout, stick them with the property taxes, charge those robo-signing executives in criminal court) would torpedo the economy as a whole, keeping tens of thousands of potential homeowners on the sidelines is not seen as a great way to help home sales and other credit-based consumer spending. There's a raging philosophical debate to be had on the parts of consumer and lender, but moving the economy forward trumps all right now.

 

Yes, such as people who are TRYING to get foreclosed on in high-tax states, but the banks don't do it because they don't want to pay the thousand or tens of thousands in property taxes each year on a house that they will have a hard time selling. It's not always as easy to get away from a house as people might assume. You will never successfully run from the tax man.

 

2Gloves, any way you can rent out the property, and maybe take a part-time job to make up the difference?

 

To some extent you can go after people who make the decision to walk away, but the banks have to be held just as accountable. As someone else said, their record keeping and rule following is less than spectacular. They do very little or absolutely nothing to help all involved, such as loan modifications, approving short sales to at least speed up the process and get something out of nothing now or even simple communication. Somewhere in there they are doing all that to their benefit. Then why is it wrong for homeowners to be able to make what in many cases becomes a business decision for their own benefit? There were two parties involved when the loan was signed and both are at fault in this mess.

 

If you are going to walk away, stop making payments, live in the house and bank the cash. If the house next door went for $3K, it will take the banks 18-24 months to foreclose.

 

Yup. Right next door. The bank couldn't get rid of it for a couple of years, it was broken into and the copper pipes stolen so finally somebody bought it a few months ago. It had sat empty for a couple years. So why would somebody buy my house for $40K, which is about half of what it was worth five years ago, when there are houses all over town for one-tenth of the price. A story in our paper last week said the average selling price in the city is now $15K. And our crime rate is one of the highest in the country so why would I ask my new wife to leave her house in the suburbs to move into the city? Not exactly the way to start new life. A friend bought a house for $4K a few years back, fixed it up to rent it and is now just going to let it go because he can't rent it. That's how bad things are here. I wouldn't be thinking about doing this if I had a better option. I just don't see one and virtually everyone I've talked to agrees.

 

I highly doubt it. There are rentals all over the city sitting vacant.

 

What about talking to the bank about a short sale?

 

short sales are worse than foreclosures, and usually have tax implications on the forgiven part of the debt.

twogloves, you have to do what's right for you. i feel badly you're stuck in such an awful situation.

 

Your indignation, when no one knows where you live, what the crime rate is, that you're moving to the suburbs, etc., is really misplaced on a thread in which you're asking for advice.

REALLY off-putting.

 

I saw the piece they did on this on 60 Minutes last year and as insane as it is to say, I think it's the smart thing to do for a lot of people.

 

This is happening all the time in Detroit, Las Vegas and California.

Do what you have to do. Just be prepared to not have a credit card for the next seven years. Might not be a bad thing.

Best of luck man...