Many homeowners who are tens thousands of dollars underwater on their mortgages — meaning they owe more than the value of their homes — have decided it's just not worth it. Some, like Heather Baker, can even afford their payments, but they're walking away anyway.
Baker is done with being a homeowner. Last month, she stopped paying her mortgage.
"Who says that my American dream has to be a home with a white picket fence and all of that?" says Baker, sitting at her dining room table.
But that's not what she was saying three years ago when she bought her four-bedroom home in a distant suburb of Washington, D.C. Baker was about to turn 40 and felt like she needed to own.
"I was like, 'Wow, you know, I need to have a home. I need to be in a home,' " Baker says. "My birthday was in September. I purchased the house in August. So I got the house before I turned 40, but it wasn't a great investment."
A Bad Investment
She figures the house she bought for $465,000 won't sell for more than $225,000 now. That lower figure is what a house down the street went for earlier this year in a foreclosure auction. Like a lot of people, Baker bought her house with no money down. The mortgage broker she worked with told her she qualified for the loan based on her credit score alone.
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Prepare for the Great Depression.
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I don't blame her one bit. A bank would do the same thing like Morgan Stanley in SF.
ReplyDeleteScrew 'em.
The NAR must take responsibility in this for pushing the housing Crack, calling it the American Dream, and now only if your a crack head and squat in the house for free is it the dream.
ReplyDeleteThe problem is not just houses ... how about all of the other STUFF that people feel they must have?
ReplyDeletePeople define themself by their STUFF rather then THEMSELF.
Our schooling or jobs and our life is determined by STUFF and we need to learn it is people and relations that are important.
The Bankers cooruption treats PEOPLE like STUFF which leads to the human body itself just being another commodity.
Walking away hurts everyone by further reducing prices with more foreclosures. I guess personal responsibility is gone. Just another selfish person who wants to socialize the loss and privatize the gain. Would be illegal for the bankers and citizens.
ReplyDeleteAs long as they try to keep the prices artificially inflated, this story will continue to repeat itself. Lenders have to take responsibility for what they lending and the true value. F*ck 'em.
ReplyDeleteLast line should be "should be illegal..."
ReplyDeleteWe as citizens of this great country must make business decision just like the corporate elites. If it is in our best interest to walk away, than do it. Get Busy Living or Get Busy Dying.
ReplyDeleteA wise old Indian Chief sat in his
ReplyDeletehut on the reservation, smoking a
Ceremonial Pipe and eying two U.
S. Government officials sent to
interview him.
“Chief Two Eagles,” stated one
official, “You have observed the
white man for 90 years. You’ve
seen his wars and his technological
advances. You’ve seen his
progress, and the damage he’s
done.
The Chief nodded in agreement.
The Official continued,
“Considering all these events, in
your opinion, where did the white
man go wrong?”
The Chief stared at the
Government Officials for over a
minute and then calmly replied,
“When white man found this land,
Indians were running it.”
No taxes.”“No debt.”
“Plenty buffalo.”“Plenty beaver.”
“Women did all the work.”
“Medicine man free.”
“Indian man spent all day hunting
and fishing.”
“All night having sex.”
Then the Chief leaned back and
smiled, “Only white man dumb
enough to think he could improve
system like that.”
I posted the house of Ms. Baker at my blog. I'm always curious about the houses these debtors "purchase". One important thing should be pointed out; with zero down, Ms. Baker should be earning at least $150K to afford that house. I suppose she could be making that much, but I seriously doubt it. So, NO, she cannot afford the house.
ReplyDeletePeter Schiff's video on renting/leasing vs buying has to be one of the best out there.
ReplyDeletePeople assume that the price always has to go up. It won't be going up sans the devaluation of the dollar.
Leasing/renting is a much smarter move right now. Don't believe the BS about pride of ownership and all that nonsense. When the bank has the mortgage THEY own it, not you. Home ownership under those conditions is a farce.
Plus everything will eventually be government owned anyway.
I'll say it again: whether or not one should keep paying their mortgage is NOT a MORAL decision; it is a financial one.
ReplyDelete"Mortgages" are contracts - most of which have built-in, in one way or another, damages clauses (e.g., the bank reposes the house).
The only moral obligation this lady has is to guard her financial future, and that of her family. Sitting on a house that is +200K underwater is not a good way to do that. Every month that she keeps paying, she is losing more money that she MAY need in the future to buy necessities, like food and clothing.
For those that disagree with me, ask yourself this question: let's say instead she had lost her job and really could not afford the house anymore, BUT rather than going down in value, the house had appreciated $200K?...and the bank is able to sell it at auction for $200K more than the amount of the loan?
At that point, would the bank be obligated, either legally or morally, to split that $200K profit with her?
Of course not.
I would probably feel differently IF she had lied about her finances to get the loan...but that does not appear to be the case.
All parties involved, including ALL such banks and purchasers, knew, or should have known, the possible outcomes...and everyone agreed to the terms of the deal(s).
The only immoral thing that has been happening is that outright rape tax payers by Uncle Sam to bail out these companies that should have failed.
Heather should have charged up silver on all her credit cards then walk away. Then cash in her silver for life for rent, groceries, living expenses.
ReplyDeleteSorry for those that cry for the bank or that she is being irresponsible. I disagree. She is being a patriot.
The corp banksters ARE our enemy, not some brown people in the middle east. They deserve -0- respect on every level. They are thieves and genocidal maniacs for profit and should be treated as such.
Those that believe you should honor any agreement with them should step off the cliff with the other lemmings.
12:44 I do not see you posting anything about the Bankers and how much money is made on the home loans.
ReplyDeleteAlso I do not see you posting about the corrupt Federal Reserve FRUAD which is not Federal and has no reserves.
What Heather has done is small compared to the corruption of the Bankers and Federal Reserve who are simply using Heather as they use you.
The oldest trick in the book keep the slaves fighting with other ... good slaves -versus- bad slaves.
1:05 right on! Let's all cry for the criminals as the 1% fail to fall in line. If every American tore up his credit card bills and mortgages and gave the thieves the finger we could take it all back overnight. The genocide wars would end. The Feds would shrink away. It is all based on our phony money system.
ReplyDeleteAll hail Heather! A true American!
Anon @ 1:05, read more posts at the blog. Banks, banksters, realtors, brokers, politicians, Fed reserve, etc., they were all included and complicit in the housing bubble. And I wrote, "I don't fault Ms. Baker for walking away", but she is still an idiot.
ReplyDelete"Using Heather as they use you."
I don't think so. I have zero debt and I am WELL PREPARED for anything that may happen. I am free, slave.
Tyrone your mind may be free but your body, your wages, your very life here in the corporation aka the USA is not. None of us are free. You are property.
ReplyDeleteOther than that enjoy your day.
Tyrone,
ReplyDeleteI think EA has done a good job with this blog.
You say you have zero debt.
Have you looked the USA National Debt lately?
http://www.usdebtclock.org
Part of that you owe!!!
You do not have zero debt.
Class warfare morons, ye without sin, just be responsible for your own deeds. Calling the banksters criminals is like yelling the sky blue. OK, its blue. But if you sign their papers and enter into a contract then honor it or you are no better than they are. Your word is all you have as a person.
ReplyDeleteTime to look into the mirror people.
I clicked the link and read the whole article, including pictures of the house.. Tell me how that is a 465,000.00 house? If so, I must live in a million dollar house, so I just made a fortune on mine, because it is paid for!
ReplyDeleteWhat geek would buy a nearly half-million in house like that? I won't accept the "because of where it's at" thing either!! Who cares where its at?
2:02pm makes me laugh. Spouting some righteous moralistic bullshit. Wonder what we'd find in HIS closet.
ReplyDeleteGood for Ms Baker she's smart enough to walk from a poor investment. Bad for her, and the rest of us, that the idiot bankers made home ownership too expensive. Gonna end badly.
HEH(tm)
If only hyperinflation was an absolute sure thing. Then buy a home on a fixed.
ReplyDeleteOf course the banksters always cover their ass though. They'd work out some other way to steal your home back.
Tyrone 1:29 - seems like you have fallen for the brainwashing. You may have good morales and ethics, but that is what they count on and use against you. Like 1:53 stated you owe debt as a USA citizen of your share of the USA Debt. Thta debt was caused by hte Federal Reserve so you are basically a slave or servant of the Federal Reserve which has been shown to be just a group of International Bankers. So in effect all Americans are indentured servants to the Federal Reserve. The sad part is that the USA Dollar is falling in value which of course the servants will be left holding the bag of worthless dollars while the Bankers take thier homes and property. Heather has simply given them back the home earlier and is she is smart will convert her dollars into something that will hold its value.
ReplyDeleteHeather isn't selfish or stupid...she's a real smart gal...why pay for a dead horse; only a fool would do that! If houses depreciate in your area, it's time to move away since there is no down payment involved; only a moron would continue to pay for a worthless trashed investment...
ReplyDeleteI think a lot of you are missing the point. Heather Baker could not afford this home and she's an idiot for thinking she could tote the note. Give me a break... "I'm 40 so I need a house." The banks are idiots for lending the money, which they knew she couldn't pay back. This is the nature of a bubble.
ReplyDelete@4.54
ReplyDeleteI couldn't have said it better myself!!
You did a great job of cutting to the chase.
I mean, what is she, a "wealthy person"? $465,000 house bought by a single mom? Come on.
B'cause of Obama I don't gots no reason to pay nobody nothing.
ReplyDelete12:49 is Karl Denninger at tickerforum.org
ReplyDeleteTrend on Craigslist: people selling fixtures from houses. I saw a whole bathroom vanity and linen closet for sale. Ad said that the items were dismantled and in the garage. Owner said he was moving and orinigal owner of items for sale. Doesn't take much to figure out this person is stripping the house. Lots of ads for "Moving. Need to sell FAST." Lots of awesome antiques for sale.
ReplyDeleteIt is wrong of her to not have to take some responsiblity in some way. Smart of her financially, but wrong that she gets to skate free. If everyone is guilty, then everyone needs to pay a price and so far, not one is. Except that this is all draggin the country down the toilet and everyone passing the buck and pointing to the next person as someone to blame.
@8pm- She may very well be in for some tax problems after the bank sells the house. Also, if she had a second lender, they will likely come after her for their money also. May bet is that she will be filing for bankruptcy in the near future.
ReplyDeleteI beleive that she like many other pimps in this society are parasites. She should be made to make restitution if she walks a away from her obligations. That is BS, she is a supposedly mature responsible adult. If the B***h would have gotten pregnant and saw she did not want the responsibility of raising the child should she kill it or walk away.
ReplyDeletePeople need to be more responsible. My wife and I have played by the rules for over 40 years.
We did not purchase a house we could not afford, we did not purchase a car we could not afford. I would have loved to have taken trips to Europe and dress like the Trumps, but we both knew that if SHTF, there would be no one to bail us out.
Ms. the only thing I can say to you is that you ought to be absolutely ASHAMED of yourself and the shame you bring on your family and America.
From a European perspective, it seems the BIG mistake many Americans did was use their houses as ATMs instead of paying off their mortgages. You bought highly mortgaged houses, borrowed more and filled these houses with a lot of stuff, much of which you may not have needed.
ReplyDeleteI bought my apartment in 1993 for about $175.000 during a housing market slump. It's in the center of one of the capitals of Europe. During the next five years I used every penny I had to pay off that mortgage, living as frugally as I did during my student years.
Today I have zero debt and my apartment is worth five times what I paid for it. I now feel rather well-off, but this hasn't changed my economic philosophy. I don't own a flat screen TV, for example, but will buy one the day my old TV breaks down. However, not until then. I still live more or less like a student, but I think my life is good.
A prominent banker from my country once said: "Wealth has nothing to do with big incomes, it has to do with small expenses." This has always been my economic philosophy.
Heather is a hero.
ReplyDeleteSuck it up all you fall down kiss the systems ass losers. You are going to lose your "Toys" too.
Why begrudge a lady with enough sense to abandon a sinking ship. Why should she stay in a no win situation just to appease your deluded vision of this shithole called america or to keep your panzy ass property values up.
Suck it up losers cause your properties are next on the chopping block. pigsnout buch of scum!
Hey this is America...
ReplyDeleteIt is our God given right to scam one another.
God's even got his dirty finger prints plastered all over the $.
We're only following orders.
God is love
ReplyDeleteBut hatred makes the rules.
Turned america into a bunch of tools.
Are we feelin the love yet?
Heather is a hero...
ReplyDeleteThis makes her fully qualified to run for the Presidency! where failure is expected and rewarded.
Heather's only mistake was buying 1 over priced house.
Unlike the greedy soulless bottom feeders that bought everything they could con their flipping little hands on.
The sooner more people follow Heather's example the sooner America faces the music and falls back to reality.
ReplyDeleteYa it's going to be tough on many of you money mongers. You might even have to cut back to one nanny. or heaven forbid learn to survive and prosper on one income and one vehicle.
Aw, I'm just talkin crazy.
I feel for ya