just walk away

(29 posts)(23 voices)
  1. we watched 60 minutes tonight (such a rare treat) and it was on people walking away from their homes because of devaluation - many of these people have the means to stay in their homes but do not want to lose any more on their investments.

    what are your thoughts.

  2. We've thought about this a lot..not walking away, but about others walking away. You (op) know roughly the area where we live and it's rural. Our house was 'cheap' when we bought it and now is valued at about 3x what we paid for it. Our mortgage is affordable, our taxes are rising astronomically, but still do-able...two or three years ago we fantasized about expanding our house if/when we had kids. Now that we have two kids and we're fairly crammed in here, our focus is more on paring things down, rather than expanding. We're surrounded by second homes and frankly, it's depressing to see mcmansions that sit empty the large proportion of the year.

    It's mystifying to me to see a house as an 'investment' (although intellectually I know this is the norm...) - we see our house as our long term home and hope that we can live here until we're too feeble to do so!

  3. I think that walking away for that reason is morally wrong. I have no respect for people who walk away when they have the means to pay their bills. It’s completely selfish and only makes the economic problem worse not to mention is a utter lack of personal responsibility.

  4. Interesting. But if they just walk away, where do they live?

  5. I started a thread on this awhile back. It was from an article I read on strategic forclosures-walking away when you can afford your house because it makes more financial sense to do so rather than pay into a house that is upside down in the market.
    I understand the personal financial sense of it. It does not however provide benefit beyond the individual's finances and I don't agree with it.

  6. Again, conservative hippie, I'd NEVER buy outside of market value thus me letting my x have the big house under-value to lease out hoping the market will turn.

    I grew up in a family that if you couldn't pay cash for it totally, it was not yours. I know many don't have the chance to do this but I'm a single mom who puts savings away every month. If I can do it, anyone can. I also pay all my bills and send the kids to care while I work. Not easy but we do it and they wear Target and WalMart clothing as do I but we all look nice, have extra money and pay for what we can do. I've NEVER had a car note.

    If you can't run with the big dogs, stay on the porch is my motto but I'm also not in CA or other states taking it up the shorts.

    We have a nice, big house in a safe hood, that's all I care about. Old and needs repair but that's my hobby.

    Try really hard not to judge!!!!! But I have to think WTF in certain situations.

  7. Anomoly- you crack me up. Those are my values exactly.

  8. Interesting. But if they just walk away, where do they live?

    This has been my question - and still is - ever since I started watching this situation from a distance but knowing the impact it was having worldwide.

    I don't entirely understand the thinking that leads people to walk away but again, I'm in a different economy, with huge differences in our economic performance, property pricing and where the impact of loan defaults/bankruptcy is huge for a long time. So my mind set is obviously different as well.

    Is there no belief that property prices will come back and that the losses are really only paper losses until you sell the asset, then they become real losses?

    What has happened to all those house people have apparently walked away from? Are investors buying them for rentals?

    FERAH

  9. I agree with saadi.

    Janice

  10. I think that walking away for that reason is morally wrong. I have no respect for people who walk away when they have the means to pay their bills. It’s completely selfish and only makes the economic problem worse not to mention is a utter lack of personal responsibility.

    I'm with you. We have a young couple (in their mid-20's) with 2 kids who are doing this & they are open about it. They are stockpiling their money by not paying mortgage & car payment so that they'll have the money to move out of state. The house will end up in foreclosure (and the car has already been seized), but the foreclosure process can take a year or more so they'll have a nice $ amount saved in that time.

    They also are not maintaining the house inside or out and it looks horrible. They don't care.

    And yes, they can afford to keep up with their bills....they are choosing not to!

    It's awful for our neighborhood. It can't help our property value. ALL the neighbors want them out!

  11. Just curious, but doesn't this screw up their credit for a long, long time? I also agree that morally it just isn't right. Then again, lots of people are on welfare in our state who don't really need it. (apparently we give the most $ to a higher % of people...nice us, no wonder we're going broke!) No matter what you do, you can't change the way some people are. If they are unethical, that's the way they live their lives. They've got to look in the mirror. Sadly, a lot of people are too selfish to care about anyone but themselves.

  12. it does screw up their credit for 7 years - they will rent a place until their credit is cleared. it is really sad. the younger couple last night only put 10% down and then saw the value of their house get slashed in half (so they paid 300K and now it is only valued at 150K) they are still carrying 2 mortgages on the home but have no chance of consolidating into 1 because the value has dropped. I like anomoly and others grew up believing if you can't afford it don't buy it - back when i was making more cash than my ceo at a small .com company i bought a condo based on on base salary and did not even take into consideration the huge $$$ i was making on comish - so i seriously could have bought a million $ house as a single lady but instead i bought a $200K house and boy am i happy!

    the young couple on 60 minutes last night said on National TV that they are walking away but staying in the house until they get kicked out just banking the mortgage payments vs. paying them and then when they get kicked out they will have a nice nest egg of $50K. i could not imagine stating that on national tv.

  13. I fear that by 60 Minutes (and the Today Show last week) airing these stories, more homeowners will just walk away. That would be devastating to local communities and the economy as a whole. If you buy a house, you are responsible for it until you sell it. Period.

  14. Interesting. But if they just walk away, where do they live?
    A lot of the people that do this buy another, affordable house and give up the 1st house after that. Their credit is screwed for 'only' 3 yrs and nobody can kick them from their primery residence.
    I know people that did that. They also bought 2 brand new cars (Audi and Subaru SUV) and live w/ out any guilt.
    This is wrong! Because we all are paying for their decision and their cars...

  15. I can't even go there....I'm so frustrated at the moment by knowing SO many couples that are basically not paying their mortgage or walking away and living (still) a much better "lifestyle" than we are. We live in Northern CA in a city where people are foreclosing left and right.

    I spoke to this a little in my other thread, how I am trying to get over offending people by not "keeping up"...and it seems everyone we know trying to "keep up" are way in over their heads.

    DH and I just try and not think about it, try anf focus on what WE are doing right (staying current on all our bills, paying down our credit the right way, living within our means...which means basically no extras). It's frustrating, but it's out of our control and I only hope that these couples we know will be held responsible in some manner.

    I know that when this is all over (god knows when!) we will know the right way to do it. I really question whether many of these people will truly ever get it?

    Brittany

  16. I get that is sucks to lose money. I just don't understand why ethics don't matter anymore. It is at all levels. CEOs of big companies, the middle walking away from homes and those lying to get on disability or stay on welfare. It seems like everyone's excuse is that someone else is doing it, so it is okay. I truly do worry that this attitude will be the downfall of our society and then everyone will be forced with surprising realities.

    It really bugs me too, but I keep trying to not get sucked up in it and all emotional. I keep trying to live reasonably and we keep socking away money in hopes that we will be better off than others when payday for all of this comes. My biggest fear is that when it does happen they will find a way to take away from us what we saved, punishing us for being the wiser ones.

  17. I think it's sad.

    We live in a nice nieghborhood. The house behind us, they just walked away from this winter. They pulled out anything that wasn't attached and even the granite countertops.

    Found out they built something newer and better nearby. I feel even worse for our neighbors who have been trying to sell their house for over a year. The "abandoned" house went for a steal as it's needs a fair about of TLC. It has been neglected for awhile and obviously needs some work. That can't help my neighbors any. Unfortunately for them, they bought at the peak, and then dropped a lot more money into it so they aren't sitting good right now.

    I'm just fortunate it's only one (at least now).

    We plan on staying put for awhile, so I figure it doesn't impact us as much. But for people trying to sell houses right now, my heart goes out to them.

  18. Not exactly the same situation but close. We have some neighbors that bought 3 houses in our neighborhood. Our local real estate agent told me that they walked away from 2 of the houses but not before refinancing both and pulling all of the equity out of them. These neighbors then turned around and renovated their third house and bought a Corvette, Escalade, Massarati, and Lamborghini.

  19. What has happened to all those house people have apparently walked away from? Are investors buying them for rentals?FERAH

    They are sitting empty, bringing down the look/value of the entire neighborhood!

    Your credit is only affected for 3 years. Meaning, you cannot get a mortgage in that time. People will rent a house during that time. So what they do is this...stop paying their mortgage and live in their house for FREE until the bank finally kicks them out. I know of 3 people personally who have not paid their mortgage in over 15 months....and still living in their home. They are saving all that money, and then when the bank finally kicks them out, they will rent a house...which is usually nicer or just as nice as their original house and pay only 1/2 of what their mortgage was. They will do this for 3 years, then have a nice amount of savings put away for a down payment of a house.

    What people are not realizing is that we ALL got screwwwed in the housing market. If we all did this, our economy would crumble before our eyes. But it's just an example of those who don't care and are just looking out for themselves.

    Don't get me wrong, there are some people who do need to walk away. They cannot pay their mortgage or put food on the table. These people are really in need, and govt programs should be helping them. It's the couple that was featured last night that makes me want to throw-up! They are just walking away to walk away. Admitting on national tv that they can afford their mortgage, and it's the "in thing" to do, is just wrong....shame on them.

    We have personally taken a HUGE hit from the housing market and our 3 1/2 year old house we built has dropped more than 60% in value. Yup....it succkkks! And it makes me soooooo mad when I see my neighbors stop paying their mortgages while they drive their new mercedes down the street yapping about the cruise they just booked, while bragging about their childs private school tuitions.....arghhhhhhhh

    Edited to add: For those who saw the segment last night, did you see the map of the forclosures and it's prediction over the next few years. DID YOU SEE HOW FLORIDA WAS COMPLETELY RED!!!
    lars_r

  20. Not exactly the same situation but close. We have some neighbors that bought 3 houses in our neighborhood. Our local real estate agent told me that they walked away from 2 of the houses but not before refinancing both and pulling all of the equity out of them. These neighbors then turned around and renovated their third house and bought a Corvette, Escalade, Massarati, and Lamborghini.
    Can they not get in trouble or sued for basically stealing money. That sounds like grand theft to me? Don't any of these people that walk away get sued as well for the difference in the selling vs the amount mortgaged?

  21. I didn't see the 60 Minutes piece, but feel like chiming in anyway.

    I agree that everyone should live within their means and buying too much house is a bad thing.

    However, I will say that we're all benefiting from the wisdom of hindsight, here. It wasn't very long ago that those of us living modestly were looked upon as suckers - by our peers, by our banks, and implicitly, even by our government. The accepted wisdom was that housing prices would only go up, forever, and banks were literally throwing money at people.

    There were some people speaking up and saying this is crazy, people. But no safeguards were put in place, and those that were there were actively dismantled or disregarded.

    Now we're living with the fallout. Does it seem retroactively really really freaking obvious that this would play out this way? Yes, but it's easy to say that now, and was less easy to say so a few years ago. Business journalists, economists, your local banker - all were saying that it would work out, your house would increase in value forever, so you wouldn't end up owing more on the house than it was worth. Then whoops, the bottom fell out, and here we are.

  22. the young couple on 60 minutes last night said on National TV that they are walking away but staying in the house until they get kicked out just banking the mortgage payments vs. paying them and then when they get kicked out they will have a nice nest egg of $50K. i could not imagine stating that on national tv.

    This is exactly our neighbors. They BRAG about the money they are saving. We are in Michigan - they are planning a move to Colorado. When they move they'll have plenty of money to settle into someplace small & buy a used car.

    They aren't in a hurry to move....they say they'll stay here until they are physically removed from the house. It's "free" living afterall......

  23. I think that walking away for that reason is morally wrong. I have no respect for people who walk away when they have the means to pay their bills. It’s completely selfish and only makes the economic problem worse not to mention is a utter lack of personal responsibility.

    I completely agree. The lack of personal, financial responsibility just burns me. I have a neighbor doing this right now. They brag about all the money they're saving up while living in their house free and clear for the 18 months it will take for foreclosure to happen.

    Susan
    mommy to L&G
    4y1m

  24. This is one of the reasons why I loved living in Mexico. They have 100% interest rate so all the families build one room at a time as they can afford. Kick the can is a normal game as the kids don't have much but it's all the same so they are all equal.

    Few rich people on the island and the rest of us were busting a hump to make rent and just eat.

    Best experience ever! Ever seen a family of 5 on a scooter? Not safe but they made it work and every Sunday was family day at the beach and in the square. I'd live there in a nano-second if I could make a living.

    People complain about immigration laws where there is true work ethic and fiscal responsibility in Mexico. I loved it there.

  25. I keep trying to live reasonably and we keep socking away money in hopes that we will be better off than others when payday for all of this comes. My biggest fear is that when it does happen they will find a way to take away from us what we saved, punishing us for being the wiser ones.

    That's my fear, too. We do the right thing and end up getting screwed. They end up doing the wrong thing and live better than us. I keep wondering where the punishment is? But then again, I just can't do it. I wasn't raised that way and neither was dh. But if they keep taxing us to pay for those who live that way, I'll have to start looking for someplace else to live. I know, I know...life isn't fair, but sheesh! This is plain ridiculous!!!

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