Jingle mail

Homes may lose short term value during recessions / housing downturns but long term values have always increased. Individuals who have the capacity to pay, but do not pay and "game" the system, are foolish - unethical - should be vigorously legally pursued.

1099 them for the loss unless the new rules don't allow the banks to do that. Punish them for at least 5 years in not giving them another mortgage no matter how much their credit improves. I would never lend money to such unethical sleazeballs, which is what they are.

This is why everyone should borrow as much as they are allowed and buy as big a house as possible. In the end, someone, or the government will take care of you. If they don't, you drag them down with you. Those prudent people, you think you are smart?!

If your mortgage has been "sliced and diced" as part of the subprime financing mess, who really is the mortgage holder? Who would have to sue me to make sure all the pieces were represented? Who, exactly, do I owe? And if you have mortgage insurance, what good is it if it doesn't pay your mortgage?

Here's a novel concept. If you can make the payments, why not make them until the market recovers???? Otherwise, you are stupid.

I haven't seen it yet this time around but I saw it more than once the last time the MA market corrected in the late 80's/early 90's.

I knew people who went out an bought a house at the bottom of the market and then gave the keys or deed in lieu of foreclosure on the condo they were upside down on, then let them foreclose on them, and then filed bankruptcy so they didn't have to pay tax on the forgiven mortgage debt.

The bankruptcy laws were change to make it harder to file bankruptcy so I don't know if you could do this like you could before.

I've got other stories of people stowing out in the middle of the night or staying in a property for as long as possible before being evicted.

Thanks for memories.

Unethical....I don't know about that. if your house is worth less 30% less that were your loan amount is, is it not just a good business move to walk away? yes, if you game the system and live rent free for a year, that crosses a line, but asking somone to keep paying for a sinking ship is asking alot just for the case of the common good.

Thanks for reporting on the other side of foreclosures. Not eveyone was taken advantage of, there are many that took advantage.

individuals who have the capacity to pay, but do not pay and "game" the system, are foolish - unethical - should be vigorously legally pursued.

It may be more foolish to continue to pay a debt substantially larger than the asset it financed. And there may not be anything to legally pursue if the mortgage loan is non-recourse. That's what non-recourse means. I believe that most mortgages in MA are recourse, but not so in California, where many of these stories originate. In any case, it may simply not be worth it to the bank to pursue these loans.

Whether by short sale, foreclosure, or jingle mail, banks are likely to take a bath in any case on mortgages made on vastly overpriced homes with minimal or no downpayment. They took stupid risks, and must suffer the loss. It's called capitalism.

Also, last year Congress moved to change the rules, so that loan "forgiveness" in a foreclosure or short sale no longer generates a 1099. Can't quite remember whether the measure is already law, though.

These people are playing the system, and the system has to penalize those who walk away or it will keep happening. I could have walked away from my mortgage after my condo lost 40% of its value in 12 months in 1990. It took 9 years for the market price of the condo to recover to its former price. I can understand why people walk away. It's unethical and I don't approve of it. But, considering the inflated prices of the houses on the market are partially due to creative financing schemes on sub prime lending provided by the mortgage companies, I don't feel too sorry for them.

Oh those poor mortgage comapnies! Thanks for the tip! definitely worth bargining

Unethical? Yes! But the OTHER SIDE OF THE STORY is that the banks and mortgage companies made insane amounts of money over the last few years by assuming the risk that something like this "might" happen.

Two previous comments call for replies:

If your mortgage has been "sliced and diced" as part of the subprime financing mess, who really is the mortgage holder?

Actually, an individual mortgage is not sliced and diced, though I've seen a lot of news stories, especially on TV, reporting it that way. Rather, your mortgage goes into pools of other mortgages, then the income from those pools gets "sliced and diced" in various ways.

Still, you're right that it can be very difficult to identify who owns the mortgage. As 60 minutes noted, a lot of these instruments now name something like "Deutsche Bank 99983887000/18888."

the banks and mortgage companies made insane amounts of money over the last few years by assuming the risk

Actually, the banks and mortgage companies made insane amounts of money passing along the risk to others, while vastly understating it. It's hard to be sympathetic to a scammer who gets scammed.

Unethical? Unethical my batt! It could only happen because of the banks and big corporates greed. Many people bought the houses at the bottom of the bum as it more affordable that renting. I don't have to, but definetelly will go with a Jingle bell if my property lost over 30% of it's value.

I guess that the bank is replacing your federal govnmt as the insurer
of last resort. These speculators are pretty sophisticated people. Too
much attention has been paid to the caricature of the weeping displaced
widow. Many of those that the fed wants to "relieve" are wolves imitating
sheep. The Government has to get out of the insurance business. New
Orleans is the prime example. Those who don't need help take advantage.
while those who need it desperately fritter it away on garbage.

Bought home in CA for $520K in 2006 with no DP...35 yr fixed loan @ 5.75, first 5 years Interest Only...Home now valued at $350K and dropping...Will not begin to pay principal for 3 more years..."Silent 2nd" which bank tacked on is $15K and is charged 7% interest and is now at $17K and growing...Have super prime credit and no problem paying mortage, but once kids come it will be tough. What would you do? I haven't made any decision but am considering and researching all options. It's not only the subprimes that will face this, financial planners are now touting this as 'good financial management'. I like my house and don't want to leave, but I can probably get qualified to buy the same or bigger/nicer home for 60% of what mine is currently valued at, then walk away from current home. Take your 'unethical' comment and tell me if you wouldn't at least consider this. Do you burn cash and donate large chunks of your income too? How about saving for your kids college fund? Retirement? If I lose my job as a result of this recession then what - be forced into foreclosure instead of proactively taking action.

Ok...the deal was that the borrower agrees to make the payments or the bank would take house. So, the borrower decides to let the bank have the house instead of making payments. Sounds like the borrower is sticking to the contract.

By their irresponsible lending the banks have taken our good name and turned it into the word "chump."