You may have to help me out on this one, is there no punishment for foreclosing on your home? I question this because I have talked with a friend and a couple of customers the last couple of weeks that are just walking away from their homes. They’re not walking because they can no longer afford it, they are walking because they don’t feel their home values will come back any time soon. I can understand foreclosure if you had an adjustable rate mortgage and can no longer afford it, or if you’ve been laid off. These people that I have talked with have had no change in income, and their payment has not increased. They’re just doing it because it seems to be the thing to do and it’s the easy way out.
I’m sure these are not isolated cases. No one seems concerned about any sort of punishment for just walking away. I know there’s a ding on your credit but from what I understand it’s not as bad as a bankruptcy. How can the banks not catch this and force people to pay back at least a portion of these loans.
Since we’ve been asked (no wait…we’ve been told) that we will be paying for these foreclosures down the road, this just makes me so angry. We’re at least $100,000 upside down right now, but we signed the loan documents. Who would we be to just walk away and make everyone else pay for it?
If anyone can help me out and let me know if there is any further punishment other than a ding on your credit for a number or years, I would really appreciate it.
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People are big on purchasing new cars. They need the luxury and prestige of driving the biggest, the fastest, the sportiest car they can find. Then they finance it over 60-72 months. What many of them don’t realize or care is that as soon as the rear taillights leave the dealer’s lot, the value of that car drops $500-1500.00 with only .1 miles on the speedometer. The amount of the loan is going to be more than the value of the car for several years. The value of the car will continue to fall as long as you own it. In maybe 25-30 years if you keep it in perfect condition, the value might start to go up again.
ReplyDeleteIn a world before President Obama, there were consequences to this type of action. During my poorer days when I found myself out of work, I had to let a used car go back. They reprocessed the car, resold it at a wholesale value and I had to pay the difference between what they received for it and the balance of the loan. For the longest time the only loans I could get were from finance companies charging 28-33% interest and loan sharks. It took DECADES to rebuild a good credit record.
Post Obama who knows if there will be any consequences. I have a feeling that just as those people, who signed the dotted line for homes that they couldn’t afford, the people who walk away are going to be in for a rude awaking. If or when the economy comes back, which couple do you think is going to have a better chance of getting a home loan, first time home owners (there will be a lot of them) or someone who walked away from a loan?
I don’t know if the people who walk away will get stuck for the difference but I’m sure that someone will. I have a bad feeling that that someone will be the American taxpayer.