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This isn't so bad for the underwater homeowner. He or she can strategically default and the bank will likely choose not to foreclose so that it can continue to

This isn't so bad for the underwater homeowner. He or she can strategically default and the bank will likely choose not to foreclose so that it can continue to claim that the mortgage is worth its full value.

adventureful 14y ago
There are certainly very strategic ways to deal with it, but you're going to take a large hit on credit with any default. That can be a very expensive price to pay over time.
SwellJoe 14y ago
That isn't how it's working out for thousands (maybe millions) of homeowners who've defaulted, either strategically or because they lost their job and simply can't afford to keep paying for a mortgage on a house worth tens or hundreds of thousands less than they paid for it. Banks are foreclosing at an unprecedented rate, and even sometimes doing so on homes of people who haven't actually missed a payment. My parents neighborhood is now about 20% uninhabited, because of bank foreclosures. My parents are $70k+ in the hole on their house, purchased during the peak of the boom, and it would never cross their minds to default on a debt. $70k is a pretty devastating economic hit to a middle class couple, now living on savings and Social Security. It's easy for folks not impacted by the economic meltdown (like those of us in the tech industry) to make light of the very real pain a lot of lower income and middle class home owners are going through right now. But, the reality is that people are being screwed left and right by the very banks that caused the crisis.
- samstave 14y ago
  We need a google map which people can submit addresses to that have been foreclosed on. This will show the foreclosure rate in a way I would trust more than what the banks may be reporting.
  - SwellJoe 14y ago
    Not specifically what you're wishing for, but interesting data porn, nonetheless: http://www.npr.org/templates/story/story.php?storyId=111494514 http://www.npr.org/templates/story/story.php?storyId=1114945...
- deelowe 14y ago
  How does one get foreclosed on while keeping their mortgage, insurance, and taxes current?
  - anonymoushn 14y ago
    It is easier than you think. Sometimes you don't even need to have a mortgage. http://www.bloomberg.com/news/2010-10-08/man-who-had-no-mortgage-faced-foreclosure-anyway-ann-woolner.html http://www.bloomberg.com/news/2010-10-08/man-who-had-no-mort... http://www.tampabay.com/news/business/realestate/bank-of-america-forecloses-on-house-that-couple-had-paid-cash-for/1072632 http://www.tampabay.com/news/business/realestate/bank-of-ame...
  - dredmorbius 14y ago
    In some cases, the bank simply refuses to accept payment, forces the process, and fails to respond in any way to the mortgageholder: http://www.huffingtonpost.com/2012/05/17/norman-rousseau-foreclosure-victim-suicide-wells-fargo_n_1521743.html http://www.huffingtonpost.com/2012/05/17/norman-rousseau-for...
  - SwellJoe 14y ago
    Mistakes, fraud, malice, incompetence, etc. http://articles.sun-sentinel.com/2010-09-23/business/fl-wrongful-foreclosure-0922-20100921_1_foreclosure-defense-attorney-foreclosure-case-jumana-bauwens http://articles.sun-sentinel.com/2010-09-23/business/fl-wron... http://online.wsj.com/article/SB10001424052970203791904576609310331811594.html http://online.wsj.com/article/SB1000142405297020379190457660... http://www.huffingtonpost.com/2012/02/16/illegal-foreclosures_n_1283467.html http://www.huffingtonpost.com/2012/02/16/illegal-foreclosure... http://www.huffingtonpost.com/2010/12/08/foreclosure-mistakes-_n_794080.html http://www.huffingtonpost.com/2010/12/08/foreclosure-mistake... http://abcnews.go.com/WN/robo-signers-blamed-foreclosure-mistakes/story?id=11798650 http://abcnews.go.com/WN/robo-signers-blamed-foreclosure-mis... http://seattletimes.nwsource.com/html/realestate/2015541624_realforeclose10.html http://seattletimes.nwsource.com/html/realestate/2015541624_... This isn't isolated, it is a systemic problem in the banking industry right now, created by reckless (and illegal) business practices on the part of the major banks and mortgage companies.

adventureful 14y ago

There are certainly very strategic ways to deal with it, but you're going to take a large hit on credit with any default. That can be a very expensive price to pay over time.

SwellJoe 14y ago

That isn't how it's working out for thousands (maybe millions) of homeowners who've defaulted, either strategically or because they lost their job and simply can't afford to keep paying for a mortgage on a house worth tens or hundreds of thousands less than they paid for it. Banks are foreclosing at an unprecedented rate, and even sometimes doing so on homes of people who haven't actually missed a payment. My parents neighborhood is now about 20% uninhabited, because of bank foreclosures. My parents are $70k+ in the hole on their house, purchased during the peak of the boom, and it would never cross their minds to default on a debt. $70k is a pretty devastating economic hit to a middle class couple, now living on savings and Social Security. It's easy for folks not impacted by the economic meltdown (like those of us in the tech industry) to make light of the very real pain a lot of lower income and middle class home owners are going through right now. But, the reality is that people are being screwed left and right by the very banks that caused the crisis.

samstave 14y ago
We need a google map which people can submit addresses to that have been foreclosed on. This will show the foreclosure rate in a way I would trust more than what the banks may be reporting.
- SwellJoe 14y ago
  Not specifically what you're wishing for, but interesting data porn, nonetheless: http://www.npr.org/templates/story/story.php?storyId=111494514 http://www.npr.org/templates/story/story.php?storyId=1114945...
deelowe 14y ago
How does one get foreclosed on while keeping their mortgage, insurance, and taxes current?
- anonymoushn 14y ago
  It is easier than you think. Sometimes you don't even need to have a mortgage. http://www.bloomberg.com/news/2010-10-08/man-who-had-no-mortgage-faced-foreclosure-anyway-ann-woolner.html http://www.bloomberg.com/news/2010-10-08/man-who-had-no-mort... http://www.tampabay.com/news/business/realestate/bank-of-america-forecloses-on-house-that-couple-had-paid-cash-for/1072632 http://www.tampabay.com/news/business/realestate/bank-of-ame...
- dredmorbius 14y ago
  In some cases, the bank simply refuses to accept payment, forces the process, and fails to respond in any way to the mortgageholder: http://www.huffingtonpost.com/2012/05/17/norman-rousseau-foreclosure-victim-suicide-wells-fargo_n_1521743.html http://www.huffingtonpost.com/2012/05/17/norman-rousseau-for...
- SwellJoe 14y ago
  Mistakes, fraud, malice, incompetence, etc. http://articles.sun-sentinel.com/2010-09-23/business/fl-wrongful-foreclosure-0922-20100921_1_foreclosure-defense-attorney-foreclosure-case-jumana-bauwens http://articles.sun-sentinel.com/2010-09-23/business/fl-wron... http://online.wsj.com/article/SB10001424052970203791904576609310331811594.html http://online.wsj.com/article/SB1000142405297020379190457660... http://www.huffingtonpost.com/2012/02/16/illegal-foreclosures_n_1283467.html http://www.huffingtonpost.com/2012/02/16/illegal-foreclosure... http://www.huffingtonpost.com/2010/12/08/foreclosure-mistakes-_n_794080.html http://www.huffingtonpost.com/2010/12/08/foreclosure-mistake... http://abcnews.go.com/WN/robo-signers-blamed-foreclosure-mistakes/story?id=11798650 http://abcnews.go.com/WN/robo-signers-blamed-foreclosure-mis... http://seattletimes.nwsource.com/html/realestate/2015541624_realforeclose10.html http://seattletimes.nwsource.com/html/realestate/2015541624_... This isn't isolated, it is a systemic problem in the banking industry right now, created by reckless (and illegal) business practices on the part of the major banks and mortgage companies.