On Walking Away
Is it okay to walk away from your mortgage for no other reason than it doesn’t make financial sense to keep throwing your hard-earned money away? There’s no universal answer here, but in most cases, the answer is “Yes.”Importantly, the reason is not that “Wall Street deserves it” or “We’ve got to teach the banks…
from Wikipedia:
In 2003, he (Blodget) was charged with civil securities fraud by the U.S. Securities and Exchange Commission. He settled without admitting or denying the allegations and agreed to a bar from the securities industry. He paid a $2 million fine and $2 million disgorgement.
Oh the irony that someone of this ilk feels entitled to prognosticate on moral issues!
“Wall Street engineered nothing more than an illegal Ponzi scheme…
Posted by: Brownstones Half Off at January 15, 2010 10:43 AM”
Fraudian slip?
quote:
Get rid of that “archaic notion”, Rob, and civilization breaks down.
but it HAS to break down, in order for it to be built back up into something better!
*rob*
Yes. But retribution is not bogus. It’s real. It’s not the primary reason to “slip on Rockports” but it well complements cutting losses on peak comps that you are unlikely to see again (in 2010 dollars) for the rest of your life. This was a once in a lifetime housing run-up. Wall Street engineered nothing more than an illegal Ponzi scheme, got bailed out by the public and is now raining bonuses (mostly stock but still). Let them eat your balance!
For many, it’s just time to stop the bleeding and reset. Stop throwing good money at a futile situation. That good money can go towards more productive uses. Ten years of good credit is not worth financial slavery. If you fucked up that badly you don’t need to be buying a house for a while anyway. You probably won’t even be able to. It’ll take some that long to save up the 20% down payment anyway (get used to that percentage!).
“moral obligation to pay” or not, fuck a contract! The banks and FED committed massive fraud. There should be no honor amongst theives.
If you’re “Hunting for Red October” on your mortgage and can’t afford to absorb further losses, you’d be extremely stupid not to walk away.
***Bid half off peak comps***
“AND, there is plenty of evidence out there that people who do will have no problem renting another place afterwards”
I wouldn’t rent to them.
I’m sure they are only in this sad predicament because they’ve lost their jobs and there is no money left to pay for anything. Simply getting up one day and deciding that the mortgage is a bit too costly but still able to pay it is not the situation any of these people are in. They likely have no income any more.
I agree with the disgraced ex-analyst one this one. If your mortgage is significantly higher than the equivalent rent, your home is fungible and easily replaceable, and you don’t mind the 5 to 7 year ding on your credit, walk away. This isn’t indentured servitude, where you have to sign in blood when you borrow. There are remedies for the lender, and penalties. Pick your poison and drink up.
They will have no trouble renting.
I have never ever had anyone call, contact me about any of my past tenants.
Henry Is so correct.
I’m actually stupid enuf to believe that a man should pay his bills.
By the same logic, you shouldn’t pay for anything you buy since it all depreciates as soon as it leaves the store.