To Bail or Not To Bail on Your Home?
If the value of your home is less than the amount of your mortgage does it make sense to keep making your payments or should you just walk away? If you can’t get the bank to reduce the principal of your loan, what should you do? Well, no one can tell you that because every…
If the value of your home is less than the amount of your mortgage does it make sense to keep making your payments or should you just walk away? If you can’t get the bank to reduce the principal of your loan, what should you do? Well, no one can tell you that because every situation is different, but, as The Times points out this weekend, the penalties for defaulting on your mortgage may not be as onerous as they once were. First of all, more and more banks and saying OK to short sales, in which the owner sells the house for less than the value of the mortgage; secondly, even if you go into foreclosure, the bank is unlikely to chase you down to make up the difference between the sales price and the mortgage amount. If the lender does forgive some piece of your debt, however, some states will still try to treat the forgiven debt as taxable income. Lastly, some legal experts expect that the credit rating agencies won’t hit you as hard for a foreclosure now as they might have in the past. It just seems obvious that a foreclosure in 2008 or 2009 doesn’t have as much information value as a foreclosure five years ago, said legal prof Todd J. Zywicki. Are any readers currently underwater and considering voluntarily bailing on their home?
Thoughts on Walking Away From Your Home Loan [NY Times]
Photo by Jennscrzy
fsrq- when you are more conversant on what “McMansion” refers to these days and you actually develop the intelligence or have educated yourself in psychology, then I will take your character assessments more seriously. If anyone needs to look in the mirror about improperly shaped views, that would be you. Arrogance doesn’t look well on you.
As for “green.” In case you have forgotten, the evironment was rather different in the days these buildings were put up and actually many older houses have features built in that enabled them to compensate for things like airconditioning in the days before there were such things.
And since were are discussing history, you might want to recall that most town and row houses wre built to be elegant and beautiful, and the aestetics of the day were a far cry from ours. So a fireplace as a norm would not have been a hole in the wall. YOu have no idea about form follwing function, do you? No comprehension about the inteplay of archtiecture, construction, design and environment- and therein is the real differnece between a McMansion (as properly defined by lechacal) and a Brooklyn Brownstone.
As far as being naive- there is a huge differnece between a McMansion gated community out in the sticks and an urban community going through changes. I won’t bother to take the time to explain to you why- do your own reading.
And no- it isn’t pretentious to buy a million dollar brownstone if you can afford it. It’s pretentious to do an unnecessary gut rehab and put in such things as a $15,000 stove you never cook on to impress your friends.
Like I said before- try to use the proper terminology, and get better educated before you accuse people of being snobs or try to analyze them or debate points about which you obviously know little about.
lechacal – I am not picking a fight with anyone…..I am just pointing out the sillyness and folly of labeling a whole class of housing = stupid.
Even if I think a family of 4 living in a 10,000sq ft house as “stupid” – it doesnt change the fact that others can (just as easily see) that paying 3x as much to live in a ‘brownstone’ that is 1/3 the size and has little to no outdoor space is just as “stupid”.
The truth is that on an economic basis (which is what this thread was about) either can be equally as “stupid” or “genius” depending on your circumstance and timing.
As for the “quality” – this is entirely circumstantial and essentially useless for discussion. Some new housing is built well, some is built like crap, some Brownstones have been renovated well and some have been renovated poorly and some havent been renovated at all – and for Brownstones – all are 100+ years old. And anyone who has any experience and is honest will tell you that on average, the maintenance costs for a new home in the 1st 10yrs of ownership will be far less than for any 100+ year old building – no matter how dedicated the 19th century craftsman were who built it.
bxgrl – you should learn about history – lets take what you said:
“How many of those homes[McMansions] do you think were built to be ecologically sound or green?”
And Brownstones are “green” – other than the fact that they are attached there is NOTHING “green” about a brownstone
“Instead, they are built specifically to be pretentious and overbearing.”
You mean EXACTLY like the Brownstones were built – and btw if you think that there is no vanity or pretension in most peoples buying a multi-million dollar Brownstone then you are very naive
“They were stuck in places that are now seeing half the development go empty and the occupied half emptying.”
Again – you mean like when after the Brownstone boom much of these structures were turned into apartment flats, and then after even more declined a sizeable portion were abandoned – and still are in many many cities in this country and even a few here in NYC.
Being a housing “snob” is really not the worst insult in the world – but not being able to recognize how your own biases and prejudice can improperly shape your view certainly is a major liability.
“I’m curious how these new condos, despite being in brownstone Brooklyn, are not “part” of brownstone Brooklyn”.
A simple enough distinction SnarkSlope for us old farts who were part of the original”brownstone revival” and would never want to live in a new house, despite it’s obvious practicality. You [or fsrg] might label it snobbery–I just call it eccentricity 🙂
http://www.msnbc.msn.com/id/29669640/
“The most important reason: You signed a contract, took the money and promised to pay the lender back. That’s what the law now requires you to do. If we all got to decide which bills we wanted to pay, we wouldn’t have a functioning economy for very long.”
fsrq: Oh my. First of all, I am the one who came up with the McMansion example, so you should pick this fight with me. I recently came back from an exile out in suburbia, and I can tell you without qualification that there is class of housing, commonly known as “McMansions”, that consists of recently constructed, poorly built, massive new homes that focus almost entirely on size and sheer volume of amenitites regardless of quality, on lots that are much smaller than one would expect for houses of such size. They are, architectually and aesthetically, total fucking garbage. They are the residential equivalent of cheap plastic toys from China. There is a fraction of the quality and a large multiple of the quantity of their more traditional counterparts.
Are there any estimates of how many people might do this?
I suppose the whole “McMansion to Brownstone vs Suburbia” thing is a bit out of wack too.
What did that NYTimes foreclosure map show? 95% of the foreclosures in something like 5 states (CA, FL, AZ and MI I think…)
So this “walking away” idea really only matter to a small handful of locales, I suppose, with the occasional individual in the rest of the country.
Snark- they are part of the New Brooklyn, not the Old Brooklyn 🙂