No Help in Sight, More Homeowners Walk Away

[brentspeak]

http://www.nytimes.com/2010/02/03/business/03walk.html

Published: February 2, 2010

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.

snip

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 http://topics.nytimes.com/your-money/investments/index.html?inline=nyt-classifier">investment.

snip

“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.”

[babylonsister]

1. I don't understand what size and price of homes these people bought.

I'm renting now, and know I could own a townhouse or condo and pay a lot less. These homes must have been hundreds of thousands, which is something only some of us would or could consider. I know, it depends on where you live, but I cannot imagine paying that.

Disclaimer: lived in TX for years, and it is/was relatively cheap compared to a lot of the country.

[GiveMeFreedom]

5. Hi

babylonsister, First, since my introduction to DU I have found your posts intelligent, touching, and inspiring at times. Many of us "in-trouble" home owners did not set out to fail, but we may have failed to plan. In my case, I did not plan ahead and now realize that I needed to save my total salary from 2 years of wages in order to keep my house. In other other words my wages have been cut by 2/3rds. I am doing and have tried everything to keep my one and only home. I do not own stocks, do not own rentals, do not own a boat, plane or motorcycles. I have not taken a cruise, ever! and the last time I was on a vacation was 20 years ago, went to Mexico on our honeymoon (yes, we are still married, first time for both of us) If we rented, we could save a substantial amount every month, but we are trying to stay in our home. The banks, especially Bank of Assholes, are doing everything they can to take homes away, which includes stalling, lying, cheating, manipulating, and even scaring people. Now why is that? Would it not be better for America if people who own just one home and want to keep that home, are given some help? If more homes are foreclosed, it will make things even worse, a lot worse. Neighborhood blight is just the outward signs of massive community foreclosures, ghosts towns are growing all around us. The small community mom and pop stores are next, they go when no one lives in the local community and can purchase their wares. I could go on, but I am sure we are of the same awareness that the American dream is in trouble, big trouble.

Now if a person owns 2 or 3 homes as investment property and makes a business decision to walk away from an upside down mortgage, that may not quite sit well with many, but more of this is happening and I believe hurts the single home owner who wants help to keep their home. Of course I could be wrong and always take criticism with a benign vengeful furrowed brow upon my red colored face, then I get over it. :)




Oh, gave you a heart because:
1. You have a lot of them
2. I hope I get one
3. Because YOU rock!!!

[babylonsister]

7. My home in TX cost less than $70,000 in 1995, w/pool. It was

in or close to foreclosure when bought, and lots of money paid into it. Money in, money out.

I'm in an apartment now, and that house is still there, but I don't know that there are buyers out there.

[Arctic Dave]

2. Are they trying to lay some of this on bloggers?

If that is the case then I want tell anyone with a underwater mortgage to stick it the banks and investment firms that started this mess.

[Skink]

3. these banks are essentially clear cutting the land.

like how New Orleans let the leavees run down till the big one came along. The low income people were forced to flee and grand projects are then started to further gentrify the city.

[gratuitous]

4. The landlords and big money boys walk away

But when the buyers walk away, it's now a crisis. Well, there certainly are more buyers than big money boys. But banks still aren't willing to negotiate with mortgage holders. They're expecting someone somewhere to re-inflate the bubble so all their overpriced properties will once again be the goose laying golden eggs.

[Fumesucker]

6. They're small enough to fail..

Nobody's going to bail out homeowners, this cartoon explains it pretty well..

[cutlassmama]

8. When the apartments get full there will be more tent cities across America.

[BR_Parkway]

9. Actually, vacancy rates in most cities are rising as well - folks are

getting an apartment to split when they would have lived on their own, families are moving back home with other families to survive

[Xolodno]

10. Bank of America....doesn't surprise me.

I bought a house for my Mom that was $40,000 (put 10 grand down). The payments just jumped up to almost $700 a month. Reason they give? Deficiency in escrow. The payment without escrow would be $173...they obviously screwed up somewhere royally. I didn't call yesterday because I knew I would not be able to contain my anger. So I sent an e-mail demanding that they cancel the escrow account and I will pay taxes and insurance directly. I only wanted the escrow so I didn't have to deal with the headache....and whaddya know, I still get one. Its bad enough I lost $500 on my deposit when trying to close because Bank of America couldn't get their act together on a freaking 60 day escrow. And now this bullshit?