Jingle mail
It's the nightmare of the mortgage industry: The possibility that home owners stop making payments before they run out of money -- walking away from their homes because they have no equity -- or worse yet, remaining in the homes and living rent-free.
A Los Angeles Times story on Wednesday quoted one Leandro Hernandez on the subject of what he would tell his lender if the company doesn't agree to modify his loan
Foreclose me.... I'll live in the house for free for 12 months, and I'll save my money and I'll move on.
Wachovia Corp., a major bank and mortgage lender, said in a conference call Tuesday that it has a few Hernandez-like borrowers among its customers:
Part of one of the challenges is, and we've mentioned this before, a lot of this current losses have been coming out of California and it's -- they've been from people that have otherwise had the capacity to pay, but have basically just decided not to because they feel like they've lost equity, value in their properties...
The comment was first highlighted on the blog Calculated Risk, which calculates that 10 million to 20 million homeowners soon will owe more than their home is worth.
The industry has a cute term for what can happen next: "Jingle Mail" -- when a homeowner simply mails in the keys and leaves.
Is this happening in Massachusetts? Are you a homeowner who owes more money than your home is worth? Can you imagine walking away?
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