With more than 500,000 households in Michigan owing more on their mortgages than the homes are worth, thousands of Michigan residents are choosing to abandon their homes and walk away, even if they can afford to continue making payments.
The number of people who have engaged in such strategic defaults more than tripled between 2005 and 2008 -- from 5,100 to 17,250, according to a report by Experian-Oliver Wyman, a credit reporting and consulting firm.
Mark Zandi, chief economist for Moody's Economy.com, said he expects the problem to get worse this year and next. "As people struggle to make ends meet, they will say this just doesn't make sense" about continuing to make payments, he said.
The trend is being fueled by the large number of underwater mortgages -- those where the bank is owed more than what a sale might net a homeowner. Michigan is fourth in the nation in underwater mortgages, with 38.5% of homes -- or 532,774 -- underwater.
Those who walk away often do so after failing to negotiate a loan modification or a short sale. Sometimes they need to move out of state for a better-paying job, but they can't sell their house.
"The good, straight people of the world will feel, 'How can I walk away?' " said Southfield real estate attorney John E. Jacobs. But with an economy still struggling, he and other experts said, the stigma of defaulting on a mortgage even if one can still pay is disappearing.
More Here..
Walk away and don't look back lest you be turned into a pillar of salt.
ReplyDeleteI agree walk away. Get the hell out of Dodge.
ReplyDeleteDon't just walk away.
ReplyDeleteInvest in a new set of black market identity papers while you're at it, because your old one is slated for the FEMA camps.
Walking away is untying one of the knots of financial slavery. Screw the banksters.
ReplyDeleteGive them a double whammy. Use the slave payments instead for buying PMs.
ReplyDeleteThis news gave me a little bit of a hope. It seems that Americans are not taking it to the streets like the Greeks, but still quietly showing the middle finger to the banksters. That’s what I have been telling all along-stop paying these f_cking mortgages and crash the system. Especially the big banks. Save the money to feed your children. These bastards thought your are sheeple and bow down to their interests. They looted the whole Western world, destroyed the economies, shipped your jobs overseas and now want to f_ck you with high interest rates and high taxes with no jobs in foreseeable future. Let’s show them our collective middle finger. Hey, Cass Sunstein’s lackeys-middle finger to you too.
ReplyDeleteIn our middle-class neighborhood, the homes with the foreclosure notice on the doors are military families FORCED to move. FOR SALE signs stay up for a year as they continue to pay on a house they no longer live in. But then they can't do it anymore as their finances are in RUIN. Some will lose their "top secret" clearance and then be forced out- jobless because of a house they can't unload in this market.
ReplyDeleteOur situation for the last four years is the husband moved to his new duty station out west and the kids and I stayed behind in the Midwest. We couldn't rent or lease our home for the loan payment, we can't risk him losing his clearance (& then job) so we have lived apart trying not to lose what we have worked 25 years toward. The marriage is strained, the kids (9-16) feel the absence of their father and yet his employment is indirectly tied to our mortgage- therefore we have no choice.
RUN DOROTHY, RUN!
ReplyDeleteKANSAS IS NOT THE SAME ANY MORE!!
10:06 Sorry for your struggle. I live in the midwest as well (KC). There are no good answers. Maybe you and the kids should go to the mall next time we have one of our famous tornadoes and then just pray that God would totally destroy the house.
ReplyDelete9:35 We have tortured otherwise good Americans when they have fallen on hard times due to healthcare debt, and job loss because of their failing credit. They could no longer get the good jobs they were accustomed to because of their credit score or unpaid medical bills. I hope we can put this behind us soon and a man or woman can be hired because of their good work record and other references. As more people walk from mortgages property values go down, but more money will be spent at the mall by the sheeple. I too hope that the bankers find themselves penniless and scratching for food. Attorneys and bankers better have gold and plenty of it before they can buy one of my tomatoes or get a sip of water. In fact it would be better if they all just packed up and left the country soon. Maybe they could go and ruin some other country.
ReplyDeletethey have already ruined, iceland, italy, greece, spain, uk, working on ruining germany, china and the usa as we speak
ReplyDeleteThe international bankers you speak of folks will not be hurt by this at all. They have the gold and hold the purse strings over the nations of the West.
ReplyDeleteThe eight remaining bank shareholders of the Federal Reserve System hold all the power. They can print as much money as they want to gobble up all the baby banks, including your foreclosed and abandoned properties for pennies on the dollar.
By walking away from your homes, you are not hurting any significant banker. In fact, they're counting on it.
Happy now.
P.S. The problem with mainstream Americans is that they can't or won't organise. Obviously you have learned precious little in school about the forefathers of the Republic. NOTHING! If George Washington were alive today, he'd be ashamed to be American.
11:09 if more people would get rid of their fiat money and trade it in for GOLD and SILVER..the FEDS would be screwed. Dumb people keep putting their "cash" into the banks and stock markets thinking they are "INVESTING.."
ReplyDeleteThe so called American dream of home ownership is a scam, scam, scam. Run the numbers. I did.
ReplyDeleteFolks say, 'wow, you bought your house 15 years ago you must have made money on it.'
So the PRICE of my house was $130,000 and now it can sell for $220,000. Looks good, huh? Not so fast suckah. Even if that was all we paid for the house it's less than a 5% annual return.
Now let's add in the interest payments over the past 15 years. That's another $75,000, then add in property tax payments, another $30,000. then insurance, $10,000, then new roof $5,000, then new fence and bathroom $18,000. Then the miscellaneous paint, paper, carpets, floors and nails, let's be conservative at $10,000.
So I bought at a good time with a good low rate mortgage and I have more in the house then I could get for it. Plus I bought in a good area, suburb outside of Boston.
Besides not being such a good investment it has got me locked into a long term note. Which is good for the stability of the system but not for me.
I agree with 11:21, since I have both owned a home and rented and apartment. Renting for 30 years, verses a 30 year mortgage???
ReplyDeleteMy parents bought their home in 1964. My mother still lives in that home, paid in full. She only has a property tax bill these days and that keeps dropping, since the value of the house keeps dropping.
Can't blame anyone for staying as long as they can and then walk away right before the Sheriff comes by to evict them.
WAIT A MINUTE, I'VE READ ALL THE ABOVE POST AND 90% OF THE POST SAY "WALK AWAY" WHOA KATIE BAR THE DOOR
ReplyDeleteThat's because 90% of these posts treat a "house" as an investment.
ReplyDeleteA "house" was never intended as an investment vehicle people - it was intended to be a home.
Yes, your right; we have managed to fuck that up as well.
Only in America would the people come to expect a 25% return on investment forever for doing nothing & when it doesn't happen ?
They find ways to justify RUNNING AWAY.
This time boneheads - you can run - but you cannot hide
3:39
ReplyDeleteI agree and would go one step farther and say this whole damn housing thing started the ball rolling because of the reasons you cite.
I also say a home is much different in the cities than it is in the country. A home in the country has to work - that is to say it has to pull it's weight; in the city; it's a place to hang expensive paintings ( you won't find a root cellar full of veggies in downtown L.A.).
Also in the country; a home with land is very often passed down from generation to generation - it is not looked upon as the latest craze in investment vehicles; but a place in which to raise a family.
I agree - we have managed to turn something realatively simple into this world class cluster fuck.
I'm sorta scared. I bought a $550,000 McMansion with Granite tops and shameless steel. Got that bonus room and the big screen, got the three car garage, got the hybrid grasses, the pool and the big white porch columns. Each of my five kids has their own bedroom and bath.
ReplyDeleteThen I realized I was getting laid off last week at booger king. What to do--what to do?
RUN! Look out behind you!
ReplyDeleteRun Forest Run
ReplyDeleteWhat sucks about the coming crash is that savers and responsible people will be punished the most.
ReplyDelete3:39 & 3:53
ReplyDeleteYou two are stupid dumbasses. It is called population control. First the banksters give away cash at low interest rate which causes the prices to go up. In fact the banksters do it on purpose. If they would not approve all these questionable mortgages, the prices would stay. So they approve these mortgages. As prices begin to rise, people panic, since the house prices go up higher than they can save for a down payment. Which triggers thinking that if they don't by how, they'll never buy a house. Of course the simple people are not scammers, so they cannot foresee that at some point banksters will stop lending to crash the prices. I myself bought a house in 2004 btw putting 25% down, compared to the price of houses in 1965-1970 through gold prices (while country was on a gold standard and prices were stable) per square foot. My wife and I worked. Then in 2009 I got laid off and a month later my wife. The first thing that came to my mind was a phrase from “Fun with Dick and Jane”- We did everything right and we got screwed. How come? It took me several months of researching and 2 language to figure out how the bastards did it. I am glad that we stopped paying our mortgage right after my wife was laid off. We managed to save some money, a way less then our down payment and moved to a different country. No more American dreams. If you study your own history you'll find out that American dream is just a well camouflaged Ponzi scheme on a Grand scale.
Life is a fucking battle man ! anybody who says otherwise ain't lived yet.
ReplyDeleteI never saw the sacred stone that had carved into it " American Dream - free house ".
Yet now; a mere 105 years after my great grandaddy; cleared 10 acres of forest with his own 2 hands and a mule - "we" are "all entitled"
Stop blaming it on other people or institutions or countries or whatever - grab ahold of your friggin' testicles and take what's left of your
ga damn manhood and just get 'er done.
Whine and bitch and bitch and whine
Wah Wah Wah -