What’s to be done about this?
So far, reports are apocryphal, at best.
But, it seems as though a certain number of people are saying, well, my home’s losing value, daily (or at least that’s what they think …). I owe 99% off my original loan amount, my loan is resetting into a higher rate, and I’ve got 27 years to go.
Maybe I’ll just drop my keys off at the lender’s (if it’s still in business) and be done with it.
But, apparently it’s happening.
From the LA Times’ message boards:
“I am one of these people. My condo has dropped in value from $520K in 5/06 when I bought it to $350K now. My ARM payment will probably go up $900 per month in June.
“Despite all this, I would be willing to stay if the bank would refi the loans to a 30 year fixed, but since I’m not a ‘hardship’ case they’d apparently rather foreclose. I guess the only way I could qualify for loan mitigation is to get my boss to fire me, stop making payments, and wreck my credit. In fact, my bank won’t even talk to me until I miss a couple of payments.
“I have purchased a cheaper place in a nearby area now, while my credit is good, and will stop making payments on house #1 after house #2 closes. I know the foreclosure will be on my credit for 7 years, but I will have saved a lot of money.
“I realize I agreed to the deal when I signed the mortgage papers, but I am within my rights to walk away from a bad deal and suffer the consequences, just as many corporations write down billions of dollars of debt, lose money for their shareholders, and lay off people as a result of their bad decisions.
“I don’t really understand why people view a business decision by a homeowner as a terrible moral lapse. However, when large lending institutions, with access to more sophisticated information than any consumer could imagine, make mistakes affecting thousands of people worldwide, they are not excoriated and vilified with the same righteous zeal.”
Source: A tipping point? “Foreclose me … I’ll save money” – Peter Viles, Los Angeles Times blogs