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Tuesday, May 11, 2010
Today's Survey Question
If Your Property Value Dropped 50%
Would You Walk Away From It
&
Turn It Over To The Bank?
29 comments:
Anonymous
said...
No. I wouldn't give back the equity if it appreciated 50% so why should I turn it over to the bank if it drops 50%. When you take out a mortgage you pledge to pay back themoney you borrowed - it doesn't say that you promise to pay it back it back if all of the factors are in your favor.
If you don't not have to sell because of a move, etc. than you really haven't lost a thing - just numbers on a piece of paper. If you plan to live there for many years, the values will increase again over time.
I bought my house with the intention to be here 40 or 50 years from now, not to flip it for a profit in 5 years.
If I were still able to pay the mortgage no. However if the value dropped and I had lost my employment or had to take a position that made making my payment a large stressor, yes I would.
10:53 Sounds like a good deal doesn't it? The way I see it is you CHOSE to pay the price for the house and you CHOSE to take an ARM loan. In effect all you are doing is sticking the taxpayers with the biil for YOUR poor decisions. Do you believe the banks are just going to absorb this loss? WRONG!!! I hope a kharma bomb bites you in the end.
Joe, your missing one very key asspect of this practice, it's called a DEFICIENCY JUDGEMENT, and the only way around that is a bankrupcy. So, you "walk away" with 10 years bad credit, and the nightmare from hell, plus knowing there will be long term effects. You make it seem like the lender will just roll over, NOT!
no , I'm an American , not an idiot with greed at the top of my priority list. Everything else drops in value after a purchase , risk is always at the door of capitalism.
No, I bought my house at a certain value. When the bubble happened I never checked the value to see if it went up. I didn't care--I wasn't planning to sell. I bought it to live in. When the bubble burst I didn't check the value to see if it went down. I didn't care--I wasn't planning to sell. The value is what is it worth to me to have a "home". I guess it is because I bought my home to live in and not as some kind of investment tool that I lost money on that I feel the way I do. I think if they weren't smart enough to realize that the house wasn't worth that inflated price they were taking on in the mortgage to start with or they weren't able to sell and make that hugh profit they intended before the bubble burst, oh well, so sad. I bought my house, paid my payments all along, never borrowed against the equity and if I can help it will never put "my home" in jeapordy. Now I know some people didn't intentionally wind up in these upside down situations but what if everybody "walks away from" credit card debt, and car loans and any other debt they just don't want to pay now? Where will the credit market be then? Long story short--no, I would not walk away from it.
Spare me the moral argument. Considering that the investors (major financial institution)that own a bunch of these mortgages are walking away from their commercial property obligations left and right, I would not feel bad walking away. If it was a bad investment and you want to walk away, go ahead a deal with the issues that come up. The example set by the investors that back 90% of the mortgage market is a bad one and they cannot have their cake and eat it too.
Sorry 3:03 - can't spare you the moral argument. That's exactly what it's all about - morals, integrity, honesty, a man's word, etc.
Unless you have lost your job, your health so that you can not work a job (or anything else that is considered a total catastrophy) you should stand behind your decision to purchase and your promise to pay.
until you are in a position where you have to decide whether to feed your kids or pay your mortgage--you can not know what it feels like or why someone would make that decision. I believe that most people buy their homes with the intent of living there the majority of their lives. Some people have no other choice than walk away. Until you are forced to make that decision don't judge anybody else!
29 comments:
No. I wouldn't give back the equity if it appreciated 50% so why should I turn it over to the bank if it drops 50%. When you take out a mortgage you pledge to pay back themoney you borrowed - it doesn't say that you promise to pay it back it back if all of the factors are in your favor.
If you don't not have to sell because of a move, etc. than you really haven't lost a thing - just numbers on a piece of paper. If you plan to live there for many years, the values will increase again over time.
I like my home. Its market value has dropped. However, because I enjoy the home, I will not walk away from the mortgage.
You only loose the investment if you sell.
Like stock, if the "market" value dropped by 90% and you don't sell it then there is no loss realized.
No, as long as I can afford to pay the mortgage.
I bought my house with the intention to be here 40 or 50 years from now, not to flip it for a profit in 5 years.
If I were still able to pay the mortgage no. However if the value dropped and I had lost my employment or had to take a position that made making my payment a large stressor, yes I would.
I agree with 9:58
and I'm out ...
No, a deal is a deal. Something called integrity.
yes. i would. and i am. its 100k upside down, the payment went up (arm) jan 1, and if it were a business deal, i would walk away in a second.
10:53
Sounds like a good deal doesn't it? The way I see it is you CHOSE to pay the price for the house and you CHOSE to take an ARM loan. In effect all you are doing is sticking the taxpayers with the biil for YOUR poor decisions. Do you believe the banks are just going to absorb this loss? WRONG!!!
I hope a kharma bomb bites you in the end.
No, because next thing people will start walking away from car payments because they are upside down, then credit cards, then etc...
No, but I would go in the bank for my own reasons.
Its our home and all the kids know. I will be here until they have to kill me to take it.
Joe, your missing one very key asspect of this practice, it's called a DEFICIENCY JUDGEMENT, and the only way around that is a bankrupcy. So, you "walk away" with 10 years bad credit, and the nightmare from hell, plus knowing there will be long term effects. You make it seem like the lender will just roll over, NOT!
no , I'm an American , not an idiot
with greed at the top of my priority list. Everything else drops in value after a purchase , risk is always at the door of capitalism.
No I would join a group that chose to hang all the lawyers and bankers. Maybe throw in a couple of politicians. lol
No, I bought my house at a certain value. When the bubble happened I never checked the value to see if it went up. I didn't care--I wasn't planning to sell. I bought it to live in. When the bubble burst I didn't check the value to see if it went down. I didn't care--I wasn't planning to sell. The value is what is it worth to me to have a "home". I guess it is because I bought my home to live in and not as some kind of investment tool that I lost money on that I feel the way I do. I think if they weren't smart enough to realize that the house wasn't worth that inflated price they were taking on in the mortgage to start with or they weren't able to sell and make that hugh profit they intended before the bubble burst, oh well, so sad. I bought my house, paid my payments all along, never borrowed against the equity and if I can help it will never put "my home" in jeapordy. Now I know some people didn't intentionally wind up in these upside down situations but what if everybody "walks away from" credit card debt, and car loans and any other debt they just don't want to pay now? Where will the credit market be then? Long story short--no, I would not walk away from it.
Spare me the moral argument. Considering that the investors (major financial institution)that own a bunch of these mortgages are walking away from their commercial property obligations left and right, I would not feel bad walking away. If it was a bad investment and you want to walk away, go ahead a deal with the issues that come up. The example set by the investors that back 90% of the mortgage market is a bad one and they cannot have their cake and eat it too.
3:03 - word life!
Sorry 3:03 - can't spare you the moral argument. That's exactly what it's all about - morals, integrity, honesty, a man's word, etc.
Unless you have lost your job, your health so that you can not work a job (or anything else that is considered a total catastrophy) you should stand behind your decision to purchase and your promise to pay.
I would hope that if my house value dropped 50%, then my property taxes would drop by a similar amount.
I have already paid for my house, so walking away from it would be a bad move on my part.
Yes
No, it's a contract
No, I buy it to keep it.
No
Yes
It's a difficult question, I think I would.
Heck no.
until you are in a position where you have to decide whether to feed your kids or pay your mortgage--you can not know what it feels like or why someone would make that decision. I believe that most people buy their homes with the intent of living there the majority of their lives. Some people have no other choice than walk away. Until you are forced to make that decision don't judge anybody else!
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