Site of the Day: You Walk Away Dot Com January 29, 2008 3:16pm by Barry Ritholtz Yes, its true: Youwalkaway.com I couldn’t make this up if I tried: That’s just wrong on so many levels . . . ~~~~ UPDATE: January 29, 2008 8:05pm I see Mish put up a full post on the same subject way earlier today. Check it out . . . Spread the wealth. twitter facebook linkedin What's been said: Discussions found on the web: Rob F commented on Jan 29 Wrong as in “not right and upstanding and honorable” and wrong as in “factually incorrect.” brbrown commented on Jan 29 It’s the world we live in. People are making cold, hard “business decisions” (the corporations we work for set the example). Camille commented on Jan 29 Who knew foreclosing could be so much fun! That woman in the advertisement sure seems to be enjoying the demise of her credit rating! What could possibly go wrong here? Shnaps Parlor commented on Jan 29 This would make such an awesome “Saturday Night Live” ad. Too bad the writers are still on strike. Marcus Aurelius commented on Jan 29 In any other culture, at any other time, this would be wrong. This is America, right now, and it’s all about money and every man for himself – all social bets and contracts are off. The cheaters are on both sides of this equation, and they’ll get what they deserve. Ross commented on Jan 29 Just walk away? Kinda like Blackstone? BK used to be shameful. It damaged reputations. Donald Trump? Morals continue to decline. Cruised the net recently? This is not at all shocking. It was predictable. Lamentable yes. Grandpappy is spinning in his grave… GMF commented on Jan 29 I’m kicking myself for not having thought about this first. Is that “wrong” too? internet-anon commented on Jan 29 another quote in the spirit of “too bizarre to be fiction” ****Kerviel said in 2007 he only took 4 days holiday and faulted his superiors for failing to pick up on this. “The simple fact that I didn’t take holiday in 2007 should have alerted my managers. It is one of the first rules of internal controls.**** ^^Insert your anti-French joke here.^^ Street Creds commented on Jan 29 IF you go to their website, there are two other banners below the graph that say: “Latest Foreclosure News” and “Avoid Fraud” Brian commented on Jan 29 From the FAQ: 7. How much is your service? A. With our money back guarantee, you get it all for only $995.00. This can be made in three easy payments of $332.00. Regular price is $1,195.00. For a limited time only price is reduced and subject to change without notice. Why would anyone pay money to not pay thier mortgage? Why not just not pay the mortgate? sw commented on Jan 29 This is fantastic. I’m glad someone is getting the word out that foreclosure is in the best interest of many. Corporations are bound to do whats possible to make the most money for their shareholders within the law. Consumers/borrowers would be smart to do the same for themselves. pc commented on Jan 29 I think this is one of the few opportunities the little guys can stick to the big guys. Judging by the reaction on Wallstreet, the big guys don’t like having the tables turned on them. Well, that’s what they get for being way too greedy and leaving an opening for the little guys. Pool Shark commented on Jan 29 Camille, The reason that lady looks so cheerful is that she and her husband are boxing-up the fixtures, copper pipe and copper wiring they just stripped from their home, and are on their way to the local recycling center to convert it into cash on their way out of town… jag commented on Jan 29 The Hobbesian behaviorist in me suggests that one good way to prevent defaults and shore up asset prices is to bring back debtor’s prison… odograph commented on Jan 29 Interesting. That reminds me that a bank manager I knew was required to take a fairly long vacation every year, for the reason that it would smoke out cooked books. Do we still have such US requirements? bumble commented on Jan 29 This is perfect. Tell me, which equity holder chips in cash to make bond-holders whole? It’s the same thing. The home “owner” is the equity holder, the lender is the bondholder. worth commented on Jan 29 The only penalty for foreclosure (other than finding a different residence) is bad credit; the only penalty for bad credit is that one can no longer buy things that they don’t have the money (cash) to buy – a constraint we should all operate under in the first place but don’t! I wonder what % of homes (and vehicles) are literally owned by the people who live in (or drive) them and not by lending institutions? Maybe 5-10%? pmorrisonfl commented on Jan 29 Brian asks: > Why would anyone pay money to not pay thier mortgage? > Why not just not pay the mortgate? I think it’s a form of ‘due diligence’, albeit a perverse one. If a $1000 investment will tell me what the pros, cons and legalities of getting out of 28 years of $1000-2000 monthly payments on an asset that’s declining in value are, I might be tempted to sign the check rather than walk out n my own. As a former South Florida homeowner, I have some sympathy for people who got stuck with big (and growing) mortgages on small houses. Having been laid off, down-sized, right-sized and re-engineered over the course of a 20-year career in corporate IT, I have less sympathy for the idea that corporations can make business decisions but it’s somehow immoral for individuals to do so when it’s not in corporate interests. Alex Khenkin commented on Jan 29 Hmmm… Could this be the first swallow of a Housing Market Spring? Looks like a bottom-ticker in the making. Don commented on Jan 29 Odograph….short answer, yes. Bank employees that handle funds are required to take vacation leave at least once for five consecutive work days every year. I believe it’s a fed requirement. Catch the WSJ article on the Societe Generale fraud(sorry no cite–it’s on today’s front page of the print edition)…you guessed it, questions about the bank’s story are starting to surface. Just saying commented on Jan 29 I get the feeling the people operating this website are the same ones who were running mortgage broker sites a couple of years ago. Mike M commented on Jan 29 The regurgitation of debt begins! me commented on Jan 29 How is this different from the “consultants” advising companies how to dump their pension plans or how not to hire US employees when they are qualified? It seems to me the bounds that have been pushed by republicans and business the last 7 years are coming home to roost. damondidit commented on Jan 29 Barry, I’m having a hard time figuring out what’s wrong with this. Corporations layoff employees all the time when the balance sheet is deteriorating. Isn’t this just another application of creative destruction? Mike commented on Jan 29 Interesting – getting taken to the cleaners by getting into a ballooning ARM then getting taken to the cleaners by these foreclosure fraudsters. “Just saying” is right – these are probably the same wolves with a different skin. Paul M. commented on Jan 29 Anybody who packs up their fancy furniture, big screen TV, ipods, etc and drives off in their matching his n hers SUVs should be pursued to the ends of the earth for every last dime. Never gonna happen though. In fact the politicians will be bending over backwards to send these people a bailout so they don’t have to give up their vacation to Disneyland with the kids. It’s a pretty good clue though that banks are going to have a lot of trouble collecting on loans in the next few months. Anybody who thinks the financials have seen a bottom needs to take their sun glasses off. And future mortgage prices are going to have to take into account the growing lack of integrity by borrowers, not just the credit risks. Ross commented on Jan 29 Wow! Judging from the reactions here, looks like the natives are restless. Stick it to the man! Shades of the 70’s. OOops, back then we were in a stagflationary spiral. Moose commented on Jan 29 Don’t forget that in several states (TX and GA for example) the bank will just sue the homeowner for the deficiency, get a judgement and start garnishing paychecks… But then again, that might be why this “service” has Real Estate attorneys on staff. Walker commented on Jan 29 Why would anyone pay money to not pay thier mortgage? Why not just not pay the mortgate? Mish interviewed someone with the company. Supposedly the money pays for legal counseling, as well as legal paperwork filed on your behalf. Max commented on Jan 29 The Hobbesian behaviorist in me suggests that one good way to prevent defaults and shore up asset prices is to bring back debtor’s prison… Also, this would be an excellent way to end all sorts of lending. Paul M. commented on Jan 29 There have been a number of comments with the gist that since corporations tear up contracts when it suits them to do so (pension plans, retire benefits etc), its OK for individuals to do so. No question, corporations have gotten away with such despicable acts in the past – and probably will in the future too. However, that still doesn’t make it right. Integrity is not something that can be viewed in light of your balance sheet. You either have it or you don’t. gypsy howell commented on Jan 29 Well, a contract is a contract. If the mortgage lender writes a contract that says “if you don’t pay, we get the house” and the borrower says “well ok, here’s the house,” how is that wrong exactly? Maybe it’s not how everyone thought it would turn out when they entered into it, but it’s what they agreed to nevertheless. jingle jingle jingle Bruce F commented on Jan 29 When in doubt blame everyone, when forced to dump on someone it’s safer to stick it to the little guy. At least that’s been my experience. Why the surprise when the little guy says FU? ken h commented on Jan 29 Stick it to the man! More like stick it to the taxpayer! Get real. The secret helicopter drops are taking shape. I would put money on these are the same people who sold mortgages, real estate, and did closings a few years back. Jingle mail probably consists of people with no skin. What about the people with some equity or trying to retire. How many Greeters does Walmart need? Ouch, this is going to hurt some folks. Charles commented on Jan 29 I’m not sure how foreclosure really helps… at least in New York State: “The lender has the right to sue the borrower for a deficiency judgment. The court awards the lender the greater of the market value of the property or the sale price. Determination of the market value is up to the court.” So isn’t the borrower still on the hook for the amount that they borrowed? Austin commented on Jan 29 Don’t make large numbers of loans that will bite you in the ass based on highly questionable or fraudulent assumptions. Is that too hard to figure out? Charles commented on Jan 29 Also: I apologize if the previous post seemed dumb, but I’ve never owned property (hooray manhattan!) Pool Shark commented on Jan 29 For those who see walking away from a mortgage as nothing more than a ‘business decision’ like a company downsizing, remember that those homeowners signed (repeatedly) on the dotted line and promised (a binding legal promise) to repay that money. They are breaching their contract. Equating this to companies ‘downsizing’ as a business decision are comparing apples to oranges. Most emplyment is at will; either party can terminate the relationship at any time, for any reason. However, if an employee is working under a contract, and the company breaches it, I would expect the employee to take legal action. Though I have little sympathy for large corporations who stand to lose money from homeowners walking away from their mortgages, I suspect most people become upset when others break their promises. gypsy howell commented on Jan 29 A little tune goes through my head…. “Just walk away Renee You won’t see me follow you back home The empty sidewalks on my block are not the same You’re not to blame…” larry commented on Jan 29 This is a culmination of various events beginning w/Prop 13 in CA- otherwise known as the “what do you mean I have to pay my fair share” initiative. We morphed into corps blowing up pension plans, health care plans, etc. while the guys at the top gorged themselves with options, unlimited health care, family use of corp aircraft and golden parachutes. Last year was a disaster for financial and investment houses but they still had a 33 billion dollar bonus pool. We have a leader in DC that thumps the Bible all the time but holds no one accountable and will not even admit to a mistake himself. What me plan for the peace in Iraq and arrange to fund the operation he says. Now we wonder why some people will walk away from their morgtage obligations. Two questions- 1. Just who does anyone think will pay for wars, mortgages, retirement, health care, etc.? 2. What are the obligations of our country, both gov and private, worth, if we cannot be counted on to pay? Stuart commented on Jan 29 Farewell to Ben and the poster child website for sign of the times…all in one day. Awesome posts, great job. pmorrisonfl commented on Jan 29 > Integrity is not something that can be viewed in light of your balance sheet. > You either have it or you don’t. Amen. But what happens when integrity finally can’t pay the bills? Proverbs 30:8-9 Keep falsehood and lies far from me; give me neither poverty nor riches, but give me only my daily bread. Otherwise, I may have too much and disown you and say, ‘Who is the LORD ?’ Or I may become poor and steal, and so dishonor the name of my God. If the past suggests the future, even a person of integrity may make have to make choices between honoring their debt obligations and eating (or putting food on their families). What then? Pool Shark commented on Jan 29 Charles, I don’t know about other states, but California does not allow deficiency judgments to be obtained after a foreclosure on purchase money mortgages. However, if the mortgage is not a purchase money loan (i.e., a refinance) a deficiency judgment can be obtained after foreclosure. Ironically, many Californians who are now rushing to refinance out of their resetting ARMs are unwittingly taking on a significant financial liability. jab commented on Jan 29 You can jump on this all you want but the guy that came up with this is an entrepreneur. I wonder if Goldman will take him public? RW commented on Jan 29 Charles, I have been (but am not now) a home owner but am not sure I get your question. The law you cite says “the greater of the market value of the property or the sale price” but does not mention the amount owed. If NY is like most states, a first mortgage is probably non-recourse: AFAIK that means the lien-holder can not obtain a judgement to seize any property other than the land and structure that secured the note. Note: IIRC a second mortgage or home equity line of credit is more likely to be partial or full recourse. John Badalian commented on Jan 29 Barry – I’ll do you one better! New Menus at the Aspen Little Nell and St. Regis Hotels – How does braised beef stew or tenderloin of beef (at $10.50) sound? Also grilled salmon with scrambled eggs or an all-beef hotdog sans bun? You can get chicken breast with carrots and brown rice for eight bucks. Oh by the way, these entrees are room service only and for DOGS! The St. Regis provides a 5″ thick dog bed with a royal purple cover and ceramic dog dishes. Welcome to Aspen where “these dogs fly on private jets and are part of the family” according to John Speers, General Manager of the Five-Star Little Nell Hotel. Welcome to America 2008. Phony economic statistics. Steriod besotted atheletes. Bought & paid for politicians. I could rant on, but everyone here knows the drill. Ideally, I think “You Walk Away” is repulsive, but, that’s easy for me to say. In a country where dogs are so much better off than many of our own citizens KJ Foehr commented on Jan 29 Marcus Aurelius wrote on Jan 29, 2008 3:37:41 PM “In any other culture, at any other time, this would be wrong. This is America, right now, and it’s all about money and every man for himself – all social bets and contracts are off. The cheaters are on both sides of this equation, and they’ll get what they deserve.” Getting their just desserts? How so? A few CEOs have been let go to enjoy their golden parachutes and multi-million dollar pay packages; that certainly doesn’t seem like suffering. And many others in the mortgage lending, banking, and securitization business, who made all this excess possible, are still in place and most probably have received fat bonuses for 2007. The homeowners got to live in nice homes for a couple years, and many took cash out of the original purchase / mortgage – with none of their own money put at risk. Now they walk away and life goes on. They still have jobs, their furniture, LCD TVs, iPhones, etc – not much pain there either. And everyone else? Recession? What recession? Well the stock market has only fallen about 15% — big whoop! And remember, we were at ALL TIME HIGHS in October! Just three months ago! Now pundits are saying the financials have bottomed, and maybe the whole correction is over! It will be the shortest recession and bear market on record! Interest rates will soon (tomorrow?) be less than the inflation rate, so money is now free in inflation adjusted terms. Where is the pain? Where are the consequences for all this “bad” behavior? IMO, Americans don’t know what real economic pain is anymore. And it appears as if they never will again. Easy credit, easy money, easy livin’ – in perpetuity! If only our grandparents had known how easy it is – all that suffering through the Great Depression, needlessly… Marcus, my comments are not directed at you personally. I think we agree that the people involved should get what they deserve – some kind of punishment – but I am decrying the fact that I don’t see much of it yet, although I still think it is possible and it would be best for our culture and economy in the long run. red95king commented on Jan 29 I walked away…after selling my home in 2006 for a 200% profit. smallchange commented on Jan 29 Sounds like the long pressed for transformation from prudent citizens to reckless spenders might have some unforeseen side effects for the masterminds. I love it ! red95king commented on Jan 29 I walked away…after selling my home in 2006 for a 200% profit. mark commented on Jan 29 I’m having trouble figuring out what is wrong here, too. The lender is not simply trusting the borrower; the lender has required that the borrower secure the loan with the house. The lender has supposedly done due diligence on the value of the house (charging the lendee?). If the borrower doesn’t pay, the contract says the lender gets the house. Seems as if the borrower is simply following the terms of the contract. mark commented on Jan 29 I’m having trouble figuring out what is wrong here, too. The lender is not simply trusting the borrower; the lender has required that the borrower secure the loan with the house. The lender has supposedly done due diligence on the value of the house (charging the lendee?). If the borrower doesn’t pay, the contract says the lender gets the house. Seems as if the borrower is simply following the terms of the contract. Charles commented on Jan 29 RW, Pool Shark: You both seem to be saying something similar, basically that a first mortgage (the one you initially set down to purchase your home) is not subject to any sort of payments in a foreclosure outside of turning over the property itself. However, if someone was to refinance or take out a second mortgage or home equity line of credit, they are fully liable for the amount of that loan. Given that, I don’t see the problem with walking away from a purchase loan that you can’t pay, since that’s basically the contract, isn’t it? “Here’s a loan to buy this house, if you can’t pay it back, we get the house”. I would imagine that the hit to the credit rating is less painful than paying a reset ARM on a property that’s lost a significant chunk of it’s value. Peter Davis commented on Jan 29 God Bless America. C’mon, this is just funny. zero529 commented on Jan 29 Along with what others have said, I immediately wondered how far into the process potential clients have to go (i.e., before or after laying down the cash) to find out that they have a recourse loan. Lord commented on Jan 29 I wonder what % of homes (and vehicles) are literally owned by the people who live in (or drive) them and not by lending institutions? Maybe 5-10%? 20-25%, mostly the retired The borrowers will be punished with bad credit and the lenders with losses. They both deserve it for being greedy. Just how much that bad credit will hurt is up to lenders in the future. I wouldn’t mind the fraudsters getting punished, but the numbers are so great most of them will probably slip through the cracks. At least it will be the end of 125-100% loans, stated income loans, and many teaser rates and subprime loans. bluestatedon commented on Jan 29 I just want to smack that woman in the ad. She looks almost as obnoxious as the Comcast lady. I guess this is at bottom a philosophical question, but put me in the camp of those old-timers who have a problem with the “hey, The Man’s a slimeball, so I’m going to stick it to him” approach. For one thing, I believe the costs of this approach, if widespread, will inevitably cost those who choose to honor their contracts regardless of circumstances. For another, a certain percentage of the folks just choosing to walk away are not doing so because they’re in dire straits and unable to pay, but want to walk simply because they gambled on the Giant Real Estate Con Job and lost. They may be underwater, but they can pay. They choose not to. And finally, for those of you have seen “The Road Warrior” with a young Mel Gibson, when the barbarians are circling the trapped good guys who are guarding their hoard of precious fuel, the barbarian leader Humongous harangues them with the entreaty, “Just walk away. We promise you safe passage.” For some reason, that resonates with me here too. Pat Gorup commented on Jan 29 It’s not wrong that they are walking away and allowing someone else to pay for their responsibility because they have learned this skill from the government, employers and corporations. What is wrong is that when they make a decision like this it makes it easier to make the same type of decision in the future because it’s a blow to their own confidence, perseverance and resourcefulness. Jon H commented on Jan 29 Brian asks: > Why would anyone pay money to not pay thier mortgage? > Why not just not pay the mortgate? Well, if your mortgage jumps suddenly to $2500+ a month, and you can’t afford to pay it anymore, $1,000 looks pretty good, especially if it’s true that they can shield your other assets and keep the lender off your back. Jon H commented on Jan 29 “What is wrong is that when they make a decision like this it makes it easier to make the same type of decision in the future because it’s a blow to their own confidence, perseverance and resourcefulness.” The same is true for the financial firms that keep letting their expensive cocaine habits do their thinking for them, feeding these bubbles. Yet you know it’ll happen again in the next decade or so. Jon H commented on Jan 29 IMHO, it serves the banks right for writing rubber credit account contracts, with terms that the bank can and do change at will, always to the consumer’s disadvantage. Roger Bigod commented on Jan 29 Some historical perspective; this ain’t new. I recall hearing about it in a CA real estate crash in the mid to late 70’s, IIRC. People in good parts of the Valley, like Thousand Oaks were mailing the keys to the bank and leaving under cover of darkness . The background was that the employment situation for engineers in aerospace had crashed, and the guys had no hope of a job in the area. The guess was that they had jobs in a different part of the country, in a different line of work. It was a reflection on the job market aswell as real estate. The difference this time is that in many cases both the lender and borrower knew the loan probably couldn’t be repaid. As a matter of contract law, there’s points on both sides. But yeah, the woman in the picture is really, really offensive. PFT commented on Jan 29 Those on the hook for these subprime loans would love for people to walk away and not sue their sorry behinds for fraud. This is probably another fraudulent scheme to protect them from this. They know the borrower can file A FRAUD IN THE INDUCEMENT against the lender for selling adjustable mortgage arrangements without income verification and other checks, because the lenders and mortgage brokers possessed information on their prospective borrowers that the mortgage loan would be unserviceable by the prospective borrower, and they did not share that with the borrower (“we know you can not pay the mortgage when we jack up the interest rates on you”). Meaning that a meeting of minds did not take place and accordingly, no contract ever existed. There are a number of cases now where judges have ruled accordingly. In such instances, the borrower will have to vacate the premises, which were never theirs anyway, but will not be responsible for making any payments on the property to anyone. The borrower is also awarded repayment of any and all mortgage payments they may have made on the property, inclusive of all origination fees, property taxes, recording fees, mandatory insurance premia, plus multiple damages from both the lender and the mortgage broker. There would also be NO negative impact upon the borrower’s credit file and rating. OUCH! or JOY! depending on if you are the lender or borrower. This is their worst nightmare. And the SOB’s deserve it. The subprimes were simply a Profit by Foreclosure strategy that was very profitable when housing prices were inflating, and encouraged by the Fed who had authority to stop it. Greenspan should do some jail time in a perfect world. AGG commented on Jan 29 Whereas integrity is assumed to be the basis for civilized behavior, I have observed that this is true only with honest people. What percentage of the population is honest? The rest will honor contracts out of fear. sk commented on Jan 29 Apart from the $995 price, I don’t see anything wrong with this. This is just business; why shouldn’t individuals behave in a business like fashion ? Businesses have behaved strictly like businesses towards individuals with no regard for the “social compact” for quite a while. -K Cameron Dean commented on Jan 29 I have a question for everyone… not judging (for anyone else) whether it is right or wrong to walk away, and take foreclosure, only commenting, “it if were me.” If I had signed on the dotted line, and not been duped, I would do everything possible to pay. But, if I had been duped, I will walk away, while giving the bank the good ole’ your number one in my book hand signal. Justin commented on Jan 29 Of course walk away, and let the next owner try the game of appreciation… Who knows maybe H.R. 1540 The Recovery Rebates and Economic stimulus for the American People Act, will include down payment money after it goes throught the Senate? Pat Gorup commented on Jan 29 Just a thought..could this be the bottom being put in sign on foreclosures? You know like the headline suggesting recession on Time? lol ZackAttack commented on Jan 29 Whether it works or not comes down to whether it’s a recourse or non-recourse state. If Congress passes that debt forgiveness act that basically makes it a non-taxable event, look out for more of this kind of behavior. US economy needs debt slaves too badly. If enough people do it, they’ll let you back in the game after a couple of years, max. I’m reading on BrokerOutpost about games people are playing in non-recourse states… something like, two neighboring houses belonging to A and B, in a development with a number of bankruptcies. Both are underwater. Both A and B’s homes, originally $500K, are now worth $300K. A and B switch homes, assuming they can work out the short sale. Their credit is impaired for 7 years, but they have places to live and presto, $400K in debt disappears. k2163 commented on Jan 29 This is a California company assisting California homeowners. Many California homeowners have NON-RECOUSE loans. They just do not know it. They are NON-RECOURSE for two reasons: 1. The loan is a purchase money loan on their residence. 2. The loan is the only loan on their residience. In the case of a purchase money loan on a residence, California law prevents the lender from getting a deficiency judgement. In the case of only one loan, the One Action Rule prevents lenders who do non-judicial foreclosures from getting a deficiency judgment. Judicial foreclosures are virtually non-existant because there is a one year right of redemption and they are costly. So, the service provides these folks with an analysis of their loans to see if they are NONRECOURSE in California. That’s worth the money to most people. Because if it is a RECOURSE loan, you are going to want to know they can chase you into bankruptcy paying it. The service also provides creditor harassment protection under the California Rosenthal Fair Debt Collection Practices Act. If you are represented by an attorney, a credit cannot contact you. This is worth the money alone. I am not affiliated with this company in any way. I do provide this service to clients who qualify for it as an alternative to bankruptcy. Most would accept a reasonable loan modification from their lenders but none are willing to mark their loans to market. So they get the house back. Cheers, Ken albrt commented on Jan 29 This is awesome. The only problem I see with the web site is that Donald Trump got his own reality TV show for acting like this every time he was unhappy with credit terms. I think all these people are not just entitled to walk away, they are entitled to their own reality TV shows. By the way, if you think the woman in the screen shot is a hoot, you should definitely watch the whole slide show on the web site. Winston Munn commented on Jan 29 50 Ways To Screw Your Lender (with apt apologies to Paul Simon) It’s all right here inside these docs she said to me, It’s really easy if you treat it logically, I can help you in your struggles to be free There must be 50 ways to screw your lender 50 ways to screw your lender Just stay in the house, Ralph Don’t pay on the loan, Joan Just wait ’til they call, Paul, then listen to me Don’t take a new rate, Jake No need to inflate, mate Just mail in the key, Lee and get yourself free Owner Earnings commented on Jan 29 Can’t even get on the site! Says its down due to bandwidth limit. I’d like to think its down because there are so many people out there looking for help. IwantToKnow commented on Jan 29 Can the bank or lender actually prove they own the loan on the home? Isn’t a judge in Ohio throwing out cases where the bank can’t even prove they are the lein holder? Seems like many mortgages are in those tranche pools with other mortgages and no one knows who the counter party’s are. So in the end, if people walk away, even in a recourse state, could the banks prove they own the loan? Jon H commented on Jan 29 iTunes has a podcast called Foreclosure Straight Talk jkw commented on Jan 29 The site has now reached its bandwidth limit. Apparently your blog is too popular to link to such websites. They must have not expected to get such high traffic volumes. Did they fail to notice what the foreclosure rate is in this country? epaterlesbourgeois commented on Jan 29 Thanks for letting me know about this service. I’ll be in touch with them right away. R commented on Jan 29 I don’t understand why everyone is crying foul. For decades if not centuries, banks required buyers to put up 20% of their own money to buy property. This provided an incentive for buyers to make payments even in the worst circumstances because they didn’t want to lose that equity. It takes a long time to save up that much money. 20% of the median home price is about $40,000. No one who put that amount down on a house is upside down on their loan now, and probably won’t be even 5 years from now. The people who would benefit from this service are people who bought with 80/10 or 100% loans as home prices peaked. To be honest, both the buyers and the banks should pay for this one. I think the banks deserve to take a larger share though. They ignored a tried-and-true business plan as well as the the advice of underwriters and actuaries. Borrowers had only the advice of their parents and whatever was in the real estate section of Borders. Borrowers who walk away will not be able to buy a home or a new car for years. They will probably spend so much in interest on unsecured debt that they’ll no savings as well as no home when they retire. Banks will eventually be able to sell the properties for probably half what they loaned for them. Both made reckless decisions, both are paying the price. Again, what’s the issue? Greg0658 commented on Jan 29 with Muslim buy ins of our banks, will they bring no interest loans, and loss of a hand for non payment? I suppose that would make it a bit harder to pay back the loan … maybe another body part alexd commented on Jan 29 It is all so unfortunate. Many people who want or have wanted to keep their homes,lost the opportunity and that was all they wanted. On the other hand people as depicted in the ad, do not get my sympathy. To some extent the bankers got what they deserved. A group that pushed to get rid of the usuary laws and then lobbied to make bankruptcy more difficult should not be surprised when their short sighted thinking results in losses. Unfortunatly the last bunch in charge of our country have worked on the premise is always good for the American people. Slowly erodding the middle class i the long run is not likley to be good for their domestic busineses. Lord commented on Jan 29 Even if one wanted to persevere in such a mortgage, most people move within seven years, or have a job loss, divorce, or other reality intrude. In the end, these will mostly all end up in short sales or foreclosures. Can’t really begrudge people for facing reality sooner. alexd commented on Jan 29 Sorry the last paragraph should read: Unfortunatly the last bunch in charge of our country have worked on the premise that if it is good for business it is always good for the American people. Slowly eroding the middle class in the long run is not likley to be good for their domestic busineses. Shawn H commented on Jan 29 Not to worry, there are millions of working Americans saving their U.S. dollars in the bank account. Ben it dipping into those accounts to bail out illegals and criminals who committed federal wire fraud and overstated their income on that mortgage app. He is also bailing out Mozilo, Merrill and WaMu. Those savers are so irresponsible, saving is not the American way. Shame on them, oops, here comes Ben for another contribution. A dollar in 2001 is worth a bit over 25 cents today in gold terms. These evil “savers” will see it when they go to the pump or the grocery store. Wimpy commented on Jan 29 Coming to a bookstore near you . . . Foreclosure for Dummies Why pay $1000 for something you can read about for $20? Farmboy commented on Jan 29 Well I don’t know much about banking, but I’ve sold and bought real estate on land contract with individuals. There is absolutely no way I’d sell a farm to someone without 25% down. Now I don’t have an MBA or Phd in math, but why sell real estate with out 25% down. Those idiots that financed real estate purchases without 25% (or some reasonable amount down) are going to get what they deserve. With 25% down and the buyer walks away, as a lender you have a good chance of coming out whole. Without any down payment, you are stupid and/or crooked and probably both. Farmboy commented on Jan 29 Well I don’t know much about banking, but I’ve sold and bought real estate on land contract with individuals. There is absolutely no way I’d sell a farm to someone without 25% down. Now I don’t have an MBA or Phd in math, but why sell real estate with out 25% down. Those idiots that financed real estate purchases without 25% (or some reasonable amount down) are going to get what they deserve. With 25% down and the buyer walks away, as a lender you have a good chance of coming out whole. Without any down payment, you are stupid and/or crooked and probably both. David commented on Jan 29 This destruction of the credit system is the way to “improved” domestic savings rates. With all these foreclosures and now bad credit ratings, these people will be forced to buy things with actual cash! Ed Miller commented on Jan 29 If this is bad, how about the CBS show 60 Minutes apparently endorsing (by publicizing) this idea, as posted by Michael “Mish” Shedlock: http://globaleconomicanalysis.blogspot.com/2008/01/60-minutes-legitimizes-walking-away.html I find it amusing to see CBS showing this concept that is “so wrong on so many levels” on their Sunday night programming. Peter Sorensen commented on Jan 30 I wouldn´t get into that kind of business… Francois commented on Jan 30 Whomever want to moralize about how bad it is for the borrower to behave in its self-interest should read this piece written in March 2007 by Tanta from Calculated Risk. http://tinyurl.com/2cecq9 As a bubble keeps expanding, almost everyone get caught inside it. soNotInTheKnow commented on Jan 30 Isn’t this one of John Paulson and Al Greenspan’s gigs??? soNotInTheKnow commented on Jan 30 Isn’t this one of John Paulson and Al Greenspan’s gigs??? toady commented on Jan 30 This website is the directly foreseeable consequence of stated income, no money down mortgages. The entire real estate market for 5+ years has been a gigantic pyramid scheme that a lot of people were enticed and duped into the game by real estate “experts.” Now people are waking up to being screwed and having a large percentage of their foreseeable future earnings dumped into a declining value asset. Many first time homebuyers bought after being told that if they didn’t jump into a home now, they would never be able to afford one again. The real estate ponzi scheme has screwed the first-time home buyer deeply. But because a homeowner has foreclosure protections and no skin in the game, for the first time they are able turn the ponzi scheme on its head and use the legal mechanisms to their advantage. In essence, the loan providers did it to themselves. Greg0658 commented on Jan 30 toady – interesting twistaround perspective Jubilee but would like to see how many 1st time home buyers are staying in the home (with very small investment of their own) via the bankruptcy process Homeowner Payments + Prop Tax + Insurance =+- Home Build Cost =+- Work Output of Occupants Charleston Real Estate Blog commented on Jan 30 From the “had to happen” file Barry Ritholtz at The Big Picture said I couldnt make this up if I tried and thats alaurazadora commented on Jan 30 I see the debate, but I am unfortunately trying to make the decision whether or not to hire this company. I have tried to deal with my lender and work out payment plans. I wanted and still would like to stay in my house. Loss of my job caused this problem, but now I have one again and am ready to pay, but they don’t want to deal. Being $20,000 behind could easily be worked out, but there is no way that these companies seem to want to deal. I don’t want to hire this company to get the advice I should be able to get myself, i.e. what my rights are, what’s the time line, etc. But I have been so unlucky in finding out simple answers and certainly don’t want to spend $1,000 (that I don’t have or else I would have paid it to the mortgage company)!!! So is there really a book “Foreclosure for Dummies?” somebody help me and tell me where I can get the info I need to make the best decision. If the lender won’t work with me (whoever said they don’t want your house back) and I am forced to go down the foreclosure path; I would like to do it with the necessary knowledge and certainly don’t want to move out any sooner than necessary – So where do I get this help? Someone tell me (I’ve called the number the president gave out – big whoop!) It’s true this decision is a bad one, morality wise, but – stuff happens and if you play by the up and up and they still won’t help you – you are forced to be a well-informed person who walks away. You people that think this company is just wrong obviously haven’t faced this situation and that’s great that you can take the moral high ground, but you never know what will happen in your life, you may be in this situation one day. So give me info so I am not forced to pay this company for information I should be able to obtain on my own. Thanks. Gregor commented on Jan 30 This is RIGHT on so many levels. I love this. 100% LTV loans were nothing more than leveraged long bets on real estate made by the LENDERS. Tough luck. They bet wrong. It would be absurd for someone NOT to walk. Why dump capital into a hole? Better to use future capital for a new investment. Sorry. This is going to happen anyway. So calling it “wrong on so many levels” is just spectator chatter. Patticake25 commented on Jan 31 I have known the owner of this company personally for many years and I know he has integrity and can be trusted! Henry J commented on Jan 31 Did you see these guys on ABC nightline tonight?? Looks like a legit company! I think I’m going to call them and see if they can help me! Greg0658 commented on Jan 31 I am not in your shoes alaurazadora. I have not researched this thought. I was under the illusion that if you were “living in a home that you were about to lose to bankruptcy” that certain paper file’gs would let you stay, forcing the lender to eat lumps. This is what bankruptcy does to many service providers. Liens on property is another legal issue. Here in the Chicago tv market there was a lawyer specializing in bankruptcy. Peter Francis Gerraci (spelling). He has info tapes online. I remember the mass of file’gs right before the rules change. After the year end he came out with ads that said he found a away around the new rules. Mike commented on Feb 2 I think it’s great and makes perfect sense. If you put no money down, you don’t have anything to lose. Credit can be restored over time, so why should people pay for something each month that’s losing value? Get smart and go rent. hmmm! commented on Feb 7 Of possible interest http://www.wwlaw.com/forecl.htm TiredinTampa commented on Feb 7 I absolutely support what youwalkaway.com is doing. It seems to be the only way to make the elite that controls this country pay for their abuses. You must read this to see what I mean: http://wallstreetexaminer.com/blogs/cutting/?p=149#comment-6284 buxxy commented on Feb 8 I’ve been struggling with my mortgage payments after I was laid off six years ago. Sure, I tried to get another job that paid the same ($75k) but that hasn’t happened..and I bought the small house I own now when I made around $55k/year 15 years ago and could afford it. So now it’s 2008, it’s now $40k less in salary a year, and I still struggle. I refinanced twice to pay off bills. Now, my house value has tanked and my mortgage amount is about the same as my house’s value. Walk away though? That’s a tough one. I don’t know if I could ever do that…what do you guys think? CaptainVideo commented on Feb 11 They make the claim: 3. You will be enrolled in our affiliate credit repair plan. They have removed thousands of foreclosures from their clients credit reports. This claim makes it look like a scam. BrownSkinned commented on Feb 14 The american dream is different for every person. My version is. cheap shitty car thats works, A house i can pay in full like 70k. It scares the s@$t out of me when people have to work day and night, live miserably and always complaining that they cant feed their children. Possible ways to save money, Live with parents who own their house, or do what immigrants been doing to survive, get friends and rent an appartment and share the bills. SpyBoy commented on Feb 19 Greetings, The way it works, in contract law, as regards Promissory Notes ( the actual contract between the lender and the borrower, the promise to pay ) and Mortgages and/or Deeds of Trust ( the instruments that secures the promise ) is that Foreclosure is the remedy to the lender for the breach of the promise to pay. So, yes, not paying the amount due the lender ( actually, its the ” servicer “, who is servicing on behalf of a investment trust, most likely ), under the terms of the Note, is a breach of contract, and, the foreclosure is the remedy which cures that breach ( there may be other remedies in any given circumstance, depending on state law and terms of the agreement ). Whether its ” right ” or ” wrong ” to knowingly and willingly breach an agreement is not particularly relevant, except from a moral perspective. From a legal perspective, once the foreclosure occurs ( barring any deficiency judgment ) the parties are even, and the breach, whatever the cause, is cured. Thank you. SpyBoy a story commented on Feb 29 A businessmans car breaks down in a small town far from anywhere. His cell phone does not have service. He then walks into a bar room looking for a pay phone. At the end of the bar he sees a raggedly dressed man, who was calling his name. Stepping to towards the man who said this is me Peter. Remember we worked on that project together several years ago? It all came back. Peter, what happened? Giorgio Armani, Rolex, Mercedes and now this? Peter replied, Junk Bonds, Poor ROI, and finally Jingle mail. I have lost it all and still up to my neck in debt. I want you to shower and cleanup. Sit in a quiet place, think about your situation. Then eyes closed, open the bible, and place your finger on the page. This passage will be your guiding answer. Peter agreed. One year later Peter dressed in Armani, wearing bling and Rolex meets the businessman in a convention hotel. Peter he exclaimed, you look great. Please tell me what was that passage that got you back? Peter said, when I placed my finger on the page and opened my eyes, I clearly read. Chapter 7 The Big Picture commented on Feb 29 Read It Here First: You Walk Away.com One month ago today, our site-of-the-day was You Walk Away Dot Com. Today, there is a front page NYTimes article about — anyone? anyone? — You Walk Away.com:Then in January he learned about a new company in San Diego called You Walk Away that does ju… maamaa commented on Mar 17 I can’t believe some of the comments trashing people who are forced into foreclosure. I’m sure there are some “bad apples” but stats show most people do so because of job loss, health crises and yes, irresponsible, disgusting, lending practices by “corporations”. I live in a neighborhood surrounded by folks losing their homes. And my neighbors aren’t going hee, hee I can screw the bank; and then loading up their SUV or heading off for a Disney vacation as some have said here. It is a heartbreaking situation. What is one supposed to do if you get laid off, can’t find a job, or find a job at far less than your previous salary or are facing cancer? If you literally had to choose, as many, many folks do, between food, heat, medical treatments, child care etc., etc. or the mortgage what do you think you would choose? RJ commented on Mar 21 How wonderful! Nowadays, if you get in over your head because of your own stupidity and irresponsibility in properly managing your finances…or simply have gotten to living far beyond your means…You can now do what Corporate America has been doing for decades, and simply chuck it all, put it behind you, and let someone else take the headache and clean up the mess!…Just another example of this modern-day quitters society…and then people will wonder why things will be more difficult later…Typical Modern-Day America! Mark commented on Apr 17 Hey, for anyone seriously considering walking away – you should check out my blog – I had to walk away in 2004, and I want to help answer some questions – http://foreclosuremine.blogspot.com/ boynas commented on Apr 24 Nobody read the information in the website.. $1000 dollars is a bargain if you consider that they will send letters to the banks stating that they will be following the process for mistakes. Foreclosures and Eviction processes are very strict, the minimum error a bank makes, and it will be months free living in the house. Most likely, if they see one of those letters, they will put your home paperwork in the bottom of the pile. Banks are so short handed right now! Plus, having somebody with experience can make the difference at the time of submiting any kind of paperwork to ease the credit damage RM commented on May 8 Hi everyone, I came across this blog and actually I work for this company. when I started working here I was somewhat skeptical of this service, but after being here for a while, and speaking with 100’s of frustrated people, you would not believe how many of them are so happy and relieved that there’s someone there to help guide them through the process, if they have to “walk away”. Please understand that we didn’t create the situation, and although there’s some negative press out there about services such as ours – I coutinue to work here because every day we actually help people, and they thank us every day, and send us grateful emails every day for having our service available so they don’t have to be scared anymore. Read this next.August 29, 2007 OvercompressionApril 11, 2005 Chart of the Week: AnnualGrowth: Mortgage Debt, Real Estate, Owner EquitMarch 15, 2014 What’s the problem with 401(k)s? You. Posted Under Real Estate Web/Tech Previous Post Farewell To Ben Stein Next Post Open Thread: What’s the Fed Gonna Do Tomorrow?