Law Professor: Walking Away From Mortgages Is The Only Way to Get Banks to Negotiate
By Susie Madrak Monday Nov 30, 2009 6:00amI've been saying this all along to people: The only real obstacles are in your head. There's no reason in the world to keep throwing good money after bad.
And he's right. Banks won't negotiate with borrowers until more people start to do this:
Go ahead. Break the chains. Stop paying on your mortgage if you owe more than the house is worth. And most important: Don't feel guilty about it. Don't think you're doing something morally wrong.
That's the incendiary core message of a new academic paper by Brent T. White, a University of Arizona law school professor, titled "Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis."
White argues that far more of the estimated 15 million American homeowners who are underwater on their mortgages should stiff their lenders and take a hike.
Doing so, he suggests, could save some of them hundreds of thousands of dollars that they "have no reasonable prospect of recouping" in the years ahead. Plus the penalties are nowhere near as painful or long-lasting as they might assume.
"Homeowners should be walking away in droves," according to White. "But they aren't. And it's not because the financial costs of foreclosure outweigh the benefits." Sure, credit scores get whacked when you walk away, he acknowledges. But as long as you stay current with other creditors, "one can have a good credit rating again - meaning above 660 - within two years after a foreclosure."
Better yet, you can default "strategically": buy all the major items you'll need for the next couple of years - a new car, even a new house - just before you pull the plug on your current mortgage lender.
"Most individuals should be able to plan in advance for a few years of limited credit," says White, with minimal disruptions to their lifestyles.
What kind of law school professorial advice is this? Aren't mortgages legal contracts? In an interview, White said that in so-called anti-deficiency states such as Arizona and California, mortgage lenders have limited or no legal rights to pursue defaulting homeowners' assets beyond the house itself. In other states, lenders may decide it is not worth the legal expense to pursue walkaways, or consumers may be able to find flaws in the mortgage documents, disclosures or underwriting to challenge the original contract.
The main point, he says, is that too often people's "emotions" get in the way of clear financial thinking about mortgages, turning them into what he calls "woodheads" - "individuals who choose not to act in their own self-interest." Most owners are too worried about feelings of shame and embarrassment following a foreclosure, and ignore the powerful financial reasons for doing so.
Buttressing these emotions is a system that White labels "the social control of the housing crisis" - pressures and messages continually sent to consumers by the "social control agents," namely banks, government and the media. The mantra these agents - all the way up to President Obama - pound into owners' heads, says White, is that "voluntarily defaulting on a mortgage is immoral."
Yet there is an inherent imbalance in the borrower-lender relationship which makes this morality message unfair to consumers: Banks set the rules during the housing boom, handing out home loans with no down payments, no income checks, and inflated appraisals. Now that property values have dropped 20 percent to 50 percent in many areas, banks have been slow to modify troubled mortgages and reluctant to reduce principal debts.
Only when homeowners cut through the emotional fog and default strategically in large numbers, White argues, will this inequitable situation be seriously addressed.
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That's exactly what I told a credit card company that jacked my rate to 31+%. I told them the consequences of trying to pay were worse than the consequences of defaulting. So I did and finally after it went to collection I paid it off interest free.
Last payment was this year and my credit score is currently over 800.
Our credit card company did the same thing after we inadvertently, through automatic bill payment, paid eleven dollars lass than the minimum, having always paid more than the minimum for many years. I calculated the result for us. We would have ended up paying an additional $600+ because of an $11 error. On advice of counsel, we just stopped paying anything, and didn't answer their calls or letters. The reality is, we are now free and clear. It must be said that the credit card company wasn't hurt either. They charged it against their taxes, and sold the 'note' to some thugs.
Might also read The Best Way to Rob a Bank Is to Own One: How Corporate Executives and Politicians Looted the S&L Industry by William K. Black
William K. Black here
"default strategically in large numbers"
Sadly that is a hard one. How can those in trouble get together and strategically take action?
Most people feel very alone, embarrassed, and defeated when they are in trouble financially. They also want to keep financial troubles private as it is a very personal issue.
The banksters and broksters take advantage of that so they can take advantage of the borrowers.
The banksters are nothing short of loan sharks these days.
So sad when people are getting scrood on such a large scale.
I got flooded out of my house 2 months ago (I live in Georgia). Several of my neighbors walked away. We'll never get the money we put into our house. Maybe we should have walked too.
Given that banks and financial institutions preyed on their customers greed and/or ignorance to take horrible advantage of them, and now those same institutions are nothing more than parasites on society, I say "Fuck em!"
We GAVE these banks hundreds of billions of dollars of OUR money just so they could stay solvent enough to foreclose?!?! Fuck that.
We hauled their irresponsible butts out of the fires of their own greed, incompetence and corruptness, if they can't be decent towards us for it, fuck em.
I'd proudly walk away if I were in that situation. I'd tell em, either pay for my mortgage with bail out money or I'm out.
What's the point of trying to do the right thing? The banks aren't doing the right thing.
You would think that they would want to work with homeowners to try and keep them from walking.
We're living in some kind of fucking alternate universe or something..
Right! We should just go ahead and be parasites on society ourselves as well! Fucking brilliant!
My mother & stepfather walked away from two houses when I was growing up, and it never seemed to keep them from getting another house (much less another credit card).
RUN...don't walk.
When they walk away, where do they go? Their credit is ruined so who is going to rent to them? I'm asking these questions because I don't know the answers.
No, it's not completely ruined. I have been in bankruptcy for 10 yrs. You walk into an apartment complex with first and last months rent.. They will not turn you away. So that morgage payment, goes into rent until you find another house. Money talks.
I suppose there are places that do credit checks but show up with the money, and security deposit and you're good to go in most places. Landlords are hurting too.
Check craigslist. A lot of the rental add have thrown in 'first month free' cause they're desperate.
A few people have been in bankruptcy and actually gotten offers of credit and financing. (maybe at high rates)
They have told me a bankruptcy on their credit report is better than having a credit report without any credit on it.
FWIW
I have an attorney pal who has been representing people in foreclosure.
He has been demanding to see the note - people are walking away from the debt and keeping the house.
He is thinking of doing it for his own house.
I think this method would be the best first step.
Regardless of your financial state, if you own a mortgage it'd be a good time to ask whoever it is you're paying to provide proof of ownership. If they can't, I'd start putting my mortgage payments into an escrow account until the issue is settled (with appropriate legal advice of course)
That sounds like very good advice.
It's for people whose mortgage has a negative value. You don't have to wait until you're being kicked out of your house.
When you say,
That would be a problem. That's why you get everything lined up before you default. Sign a multi-year lease on an apartment or buy another house.
To quote TFA:
You have the advantage when walking away because you know when you're gonna do it, whereas the banks don't. You can be getting everything neat and tidy with your new arrangements, then tell your bank you're leaving.
Obviously, if you told everyone you were gonna default in 3 months . . . well that wouldn't work so well.
When interest rates were high, the industry came up with adjustable RATE mortgages. Now, the problem is that housing values have declined, so we need adjustable EQUITY mortgages: where the payment reflects the current market value of the property.
Interesting.
... for my next car loan?
That would essentially be an equity investment on the part of the bank rather than a loan. Interesting! I have trouble seeing it working given that real-estate prices trend flat in the long-term.
What White is suggesting is that consumers behave like corporations. Morality? What's that? Ethics? Not cost-effective. Pay your debts? Not when you can write them off. Conservatives have long insisted upon "personal responsibility" until it affects their bottom lines, then all bets are off. Now that bottom-line thinking is catching up with them.
Not long ago, the government tightened restrictions on declaring personal bankruptcy (at the behest of credit car companies). But why should there be a double standard? If corporations can do it, why not consumers? This is the final triumph of the corporatization of America.
Are we not men? We are CORPO.
"tightened restrictions on declaring personal bankruptcy"
If I remember correctly it was Joe Biden pushing that.
UGH!
Senator Plastic himself, (R-MBNA)
I jumped out the Pope of Hope's bus with FISA, when he said he would fight and then didn't, that was all it took for me.
But anyone that missed FISA should have known who he was bowing to with Senator Plastic in tow.
He's from Delaware for goodness sake. Of course he voted for the bank written 2005 Bankruptcy Bill. It's called representing your constituents-the banks. Do you think the two-Democratic Senators from Arkansas are going to do anything that would offend the Walton family. Geez, think they'll vote for fair union organizing laws....right?
Returning the collateral to the lender is a perfectly ethical way to resolve a loan based on collateral that has become otherwise untenable.
You're exactly right about morality w.r.t. dealing with corporations. You cannot employ morality in that case, because the corporation will not reciprocate. It is not a moral actor, but rather a contrivance of society to facilitate pooling of resources for business purposes. It is no more or less moral than a chair. Likewise, just as you cannot be morally obligated to a chair, you cannot be morally obligate to a corporation.
Some might say: "Corporations are made of people, you have moral obligations to the people." But this is not true. A corporation is not just the collection of the employees, or the investors or creditors. It is an entirely separate entity. Consider this: you owe First National Bank of Missistucky $10.000. The bank has 1000 employees. It also has 10,000 investors with an average investment of $10,000. Do you owe each employee $10? No. Do you each investor an average of $1 apiece? Not that either. You owe the money to the artificial "person" known as First National Bank.
One might also say: Corporations are made of people who are moral actors, therefore the corporation is too. This is also false. Consider a loan officer who takes pity on you. Can he break bank rules to give you a break? Not if he wants to keep his job. But his boss can authorize that, right? Not really, unless the boss wants to explain to his boss why his division is doing more poorly than his colleagues' divisions.
Surely someone up the chain can act morally, right? Ok, suppose they do. Then First National Bank is squandering its assets on its borrowers while Second National Bank isn't. The price of First's stock goes down w.r.t. Second and investors flee. And investors aren't concerned with the lending policies, they just want the best return on their money so they can retire someday. You don't want loser funds or stocks in your 401k, do you?
So there you are. Deal with a corp. as if it were a moral actor and you needlessly put yourself at a disadvantage. threating your financial security, your family's food supply, everything, just so you can feel you're "a better person than the corporation". Your obligation is to yourself, your family, your friends and community. I.O.W., to people, not things.
An "American dream" was invented which enriched bankers who collect interest on our expenditures for cars, homes, credit card purchases and late payments for the above when we spend more than we make or can afford to repay without incurring interest.
Imagine, being able to print "paper money", then sell it to people for a price, plus locking them into short or long term contracts for the privilege. What a racket!
If you're upside down on your property, you keep making your payments as long as you are able to. That is just my ass backward upbringing talking. If you got duped into an adjustable mortgage then I guess you walk away and eat crow on your ability to own a home for another 7+ years like anybody else, unless of course you can still afford to make your payments. Responsibility is a two way street, thank you very much.
That was what my upbringing told me too. But during my upbringing, banks kept loans on their books, were not the bitches of Wall Street, prudence and conservative financial advice was the norm. A very far cry from the high-flying, in-your-face, we are the Masters of the Universe who shall screw you any way we wish, kind of attitude of the banking industry of nowadays.
That is why I endorse Prof. White's advice: Be as mercenary as the banksters:
Since the Mortgage Banking Association killed the bill that would have permitted to align residential mortgage bankruptcy practices with the commercial ones, is there any other method that would force banks to modify the principal owed?
Nyet!
Banks do not have any moral responsibility to you. Your only mutual responsibility is monetary. Any decision you make with regards to this responsibility is "business". You make your business decisions based on what is most beneficial to you. If it's cheaper in the long run to walk, then that's the appropriate course to take. It is not personal, and it is a mistake to apply personal ethics and morality when dealing with a business entity. You can't eat self-satisfaction, and your family can't either.
You're in a business relationship with someone, and you realize your partner has been take advantage of you, cheating you, and is planning on running you out of business and taking all you own.
What do you do?
I fail to see what's wrong with surrendering the collateral to the lender when the original loan no longer makes economic sense.
If more people take this attitude it shuts the Credit Industry Down.
Just think 100,000 people walk away from their homes this is FANTASTIC, because the CLOWNS in the FAILED banks and the Credit Industry are now LOCKED OUT, think about it they have to restore the Credit at the same time they refinance or tell them to STICK it, hell their are more of us then their is of them.
I see a new Cottage Industry of New Credit Lines coming up LOCKING out the FAILED BANKS and the MORONS in the CREDIT INDUSTRY.
I wish everyone did this because it takes their power away. One last thing if they insist on running a Credit report WALK AWAY, they are the LOSERS that have the Inflated Mortgages. You have all that CASH and what a Beautiful thing that is.
Banks exist to loan people money. If the vast majority of people have bad credit, the banks will have to figure out a new criteria to base their lending on. It will be interesting to see how the banks will adjust to this reality.
is to make this type of behavior a criminal matter, much like intentionally failing to file a tax return or intentionally failing to pay a tax. The argument will go something like this, the government bailed out the banks, the banks owe the government money, the banks need money from borrowers as promised, and borrowers failing to pay money to banks is tantamount to not paying the government. The same routine will happen with insurance premiums soon to be required by the government. The government is becoming the collection agency for corporate interests, in fact the government is corporate interests.
heed the advice from Mish.
1) Plan in advance
2) CONSULT an attorney
First off, the couple in the video segment from 60 Minutes make me sick. They bought a home knowing the interest rate and knowing that buying a house, while historically a sound investment, is not a guarantee of anything. They can afford the payments at the higher interest rate but are not going to. They are defaulting on a legal contract and could and should be sued in civil court by their mortgage company.
Second, recommending to everyone that is struggling even the slightest bit with their mortgage to walk away from it would further restrict additional credit being issued by banks, leading us even further down the deflationary path.
Yes, banks should have seen the writing on the wall a few years ago and worked w/borrowers to adjust mortgages to better match current appraisals or adjusted interest rates down. They'd have lost some money but nowhere near as much as holding onto who knows how many houses and trying to squeeze anything out of them at auction.
But, cutting off one's nose to spite one's face is not the solution.
My loan(s) on my home fell into default due to poor planning on my behalf, and a divorce that I did not see coming. I wanted to keep my home, I couldn't afford to walk away, I couldn't afford anything. I worked with the very good people at two separate banks, real sympathetic bank employees, not machines or East Indian operators, and got my loan payments literally cut in half with two modification deals and got my interest rates slashed to 2%. True, my home is still worth less than I owe, but not a lot less. I now have my home, an affordable payment, I didn't have to move into an apartment or home with family, and prices are creeping slowly up again. Walking away may be an option for some, but, honestly, I think it should be the last option after you have exhausted all other avenues. The banks are desperate to keep you from defaulting. They do not want your home, they want your money, and a little less is better than nothing. Try them, they will make you a deal.
Just don't expect the bank to honor the loans that you have made them. Otherwise known as your bank account.... or the bank account of the company that you work for.
It's actually a "loan" from the holder to the bank, i.e., I deposit cash and you agree to give me my cash back when I ask, but are free to use it to lend to others in the meantime.
But this raises an important point. Anyone walking away should make sure to park their money with a bank other than the one which owns their mortage. Depending on the nature of the account, the bank may have recourse to snatch your money.
Hmm, interesting concept in theory. In reality you put your money into a bank account, pay for the priviledge of using said bank account, then if for some reason your balance goes below zero, you'll get fucked SIX WAYS FROM SUNDAY until you regain a positive balance.
It's ALL a racket!
Instead of paying the AIG and the banks for their mortgage failures at 100% on the dollar but allowing them to maintain those obligations, the government should have: (i) paid off the obligations at a reduced rate necessary to prevent a financial collapse; (ii) outlawed the further securitization and trading of loans, or at least required any mortgagor making a loan or any entity purchasing a securitized mortgage to hold it for a minimum of 2 years; and (iii) established a government entity to manage loan-making, empowering that entity with the authority to rewrite loans based on established criteria. The idea that banks should receive tax dollars AND keep the loans speaks volumes as to who's pulling the strings.
Bad choice. The money should have gone to homeowners, allowing them to pay off their mortgages, principle only, no interest. The banks, investment companies and insurers should have been left to die if they couldn't stand on their own.
Investment con artists were leveraging bundled mortgages at 100-to-1 or some absolutely absurd imaginary value. We should have let their house of cards collapse rather than prop it up with public money. Same with the Fed, let the too-big-to-fail private banks go down.
Subsidize the losses, privatize the gains. And the republicans rant about socialism?!
Sorry, but the couple in that video are assholes.
They refuse to pay the higher rate they understood full well they would have to pay - why? Because they're desperate? Because they can't afford it?
No. They're pissed that the value of their house didn't keep going up. They're all pouty because they just assumed the easy refinancing merry-go-round would go on for as long as they needed it to.
Poor babies. And they get on national teevee to whine about how the market didn't move their way. Awww.
No sympathy at this end. There has to be a better example of financial distress out there than this pair.
Yup, they did it all on their own! No realtor or mortgage co. told them to do this? WRONG!
these people aren't assholes. Your response only personalizes a huge problem and distracts from any viable fair solution.
It makes absolutely no financial sense to pay on something that isn't worth the value. Where is the logic to that? The banks will not re-negotiate, the government only bails out the institutions that profitted from unethical or immoral practices by giving perhaps undeserved tax payer money to them that they then refuse to turn around and pass off even some of that money to their "victims."
Where is the help for the borrowers? The lenders got help - they can continue with their ways. Why shouldn't the borrowers also be able to choose what's best for them and continue on their way.
Play this out. The borrowers continues to pay their mortgage. They pay off their loan. They now own a house worth half the value when they purchased it plus all the interest they paid. For discussion sake let's say the house was worth $300,000 when they bought it. They ended up paying $450,000 with the interest. Now they can sell it for $150,000. Most people can't afford that kind of hit of hundreds of thousands of dollars.
If a corporation found itself in a similar situation they would default and most people would applaud their business acumen.
I am so sick of the myopic vision that only sees moral imperatives for the less powerful while turning a blind eye to the powerful's manipulation of the system for their own greedy ends.
In this scenario we are all being hurt by the collective greed, irresponsibilty, naivete, opportunism, criminal behavior, or just bad luck and timing. Even though I am not personally involved in this mess, my business relies on the buying power of society so, like so many other businesses, my business is hurting. Where's my relief?
It is to everyone's benefit to get through this as soon as possible with everyone coming out of this as financially viable as possible - not just the powerful and wealthy.
The solution lies with all of us taking a shared resposibility and understanding that we all probably have to take a hit.
The banks refuse to give their borrowers any relief so collectively walk away and get their attention. Maybe then they will see that we are all in this together.
If a corporation found itself in a similar situation they would default and most people would applaud their business acumen.
Yup. Companies do it all the time. They tell the banks we can't afford to pay our debts. We can give you (example) 50 cents on the dollar, or we'll walk away, declare bankruptcy, and you get nothing. Banks hear that.
Debt is bought, sold, traded and negotiated, like everything else.
"I am so sick of the myopic vision that only sees moral imperatives for the less powerful while turning a blind eye to the powerful's manipulation of the system for their own greedy ends."
All other arguments can now end. TYVM.
Couldn't agree more! I have 5 houses on my block that have been subject to this type of asshole. Who's giving me back my lost property value?
Everybody who buys a house agrees on the value set at the time of purchase, and they agree to the terms of the loan. There's no guarantee that the value of that asset will increase. If you can still afford the payment you agreed on, then walking away from the loan is fraudulent.
If everybody walked away from a loan whenever the item purchased lost value, nobody would make a new car payment. They lose a lot of value as soon as you drive them off the lot.
And here's the thing - it's not just about screwing the bad old banks. Increased foreclosures will take the market value of all houses down even farther than they're going now, creating more situations where people will walk away.
Walking away is not the answer; the author of this drivel is a young guy who obviously just doesn't give a shit about other people or his community (and I live in that community...) What we need to do is get the government to enact strict banking regulations, put Glass-Steagall back on the books, nationalize the banks as necessary, and let some of the banks fail.
Houses in the US are still over-valued by any measure -- they should depreciate farther. This will be enormously beneficial in the long term, because our economy will no longer be distorted by absurdly high housing prices.
Housing is an expense, not an investment. Anyone who tells you different is trying to pick your pocket.
if people walk away then housing values further decrease. Banks should understand this and work with people to keep them in their homes and financially viable. Banks asked for help to keep themselves financially viable and on an economic level we can all see the benefit of that. The same is true for the borrowers as well. Keeping them in their homes with the ability when needed to sell their homes without destroying their financially viability also makes sense and benefits us all.
This is a real threat to not only our domestic economy but to the world's as well. We all need to share in the solution with financial viability for as many as possible being the goal otherwise we'll end up with a larger chasm between the wealthy and everyone else which is a whole set of other problems which also threaten humankind.
Many mortgages were sold on lies, and it isn't just the borrowers who fudged their incomes. Turns out the banks convinced people to take non-fixed mortgages, even though they qualified for a standard mortgage. And then the banks lied about what the payments would be. Do you still think the homeowner is obligated to pay if the banks lied?
is one of many answers.
Corporations do it, closing unproductive factories and sweeping the debts of said entity away with the stroke of a pen and the help of a system that allows such activity.
And many times these companies don't wait until the debtors are at the door with the Sheriff to make the move. They see a drop in ROI and a bleak future for change and drop the hammer on the place themselves. Then walk away fat and happy that their main bottom line just made a huge leap and they are golden to their directors.
WTF is wrong with a family acting in the same capacity? Not one frickin' thing...and they will pay a price for the choice.
That's the financial tradeoff...and there always is a financial tradeoff for personal finance decisions.
simply walking away from your loan. My parents live in a rental unit where a guy is simply not paying his loan, and on top of that, this guy is being a slumlord. He knows that since he will not own the house long, he is not taking care of my parents' needs as renters. He refuses to invest any money with the unit because he knows he will not own it for long. and there are multiple problems with the house. He is also ignoring my parents' calls.
While in theory it is nice to stick it to the banks, my parents are becoming victims in this situation too. They live in San Diego where rent is astronomical and can't get another roommate to share the house (the way they used to subsidize the rent) because the house could be foreclosed upon any day.
This is an important issue, but you did not write an important story about it.
The video shows only two or three sentences, which only repeat what you reported in your headline?
There simply is no value to this video. You shouldn't have posted it.
sc
Credit cards will stop being lenient and will slap people harder over this. 2 years? No no no. Let's make that 7 years. Make it just as bad as bankruptcy.
Corporations do things for their best interests. They feel no shame shaking you down why somebody would think twice I don't know. Business 's have no emotion why emotion should be involved for individuals I don't understand.
If people who buy houses during an inflated market can force the banks to give them money back when the market drops, why don't the people who sold the house have to give back the money they sold it for? That's the only way this would be fair.
Someone walked away with the money that the house was worth at the time it was sold. If we are going to break all contracts and say that someone should have to give money back because the house lost value, then it should be the people who sold the house. (Hmmm, but that money is now in another house.. well, they should lose that, I guess.)
Hell, why don't we prosecute them for selling something for what it was worth at the time, not what it might someday be worth? Does this sound ridiculous? Of course it does, but that's what this guy is calling for: If someone decides they paid too much for something, they shouldn't have to pay anything for it.
Nobody forced anyone to buy a house in an inflated market. Sure, businesses may have tried to entice them into it, but that's what happens in a capitalist society. We all deal with it daily.
this attorney just now learned of the "quitclaim deed", a legal document where the property owner/borrower signs over title to the lender and walks away. been around for years and years.
however, this doesn't automatically relieve you of your mortgage obligation, and doesn't prevent the lender from suing you and getting a judgment. the judgment will be recorded, and i guarantee it will prevent you from getting any credit, until it's erased.
if you're already in default, what are the odds of some other lender financing the purchase of a new house, car, etc, prior to making your escape?
if you plan to go to the University of Arizona Law School, rethinking any plans to sign up for prof. white's classes might be in order.
One point the couple made in the interview is that they cannot refinance. WTF are they supposed to do? It's lose/lose if their mortgage company won't come to the table to work something out. I'd walk away too. And this is not uncommon. When you're that far underwater all you can do is walk away.
... always taught me that if you couldn't afford a fixed rate loan, you couldn't afford the property. Turns out they were right.
Yes the banks are greedy pricks. They always have been. But people are stupid too.
Lose your job, your health with no health care available, get divorced...and on and on. Sometimes life is very unfair, and in some cases, walking/crawling away from debt is the only means of survival. It's not always about being stupid. You were lucky you chose the parents you did...not everyone is that smart.
Get a good lawyer. My dad's been practicing for 55 years now (he's 80) and the stuff he tells me-- our rights, our options-- just blows me away. We common folk have no idea how much we have the law behind us.
(Canadian, but I'm sure the US isn't that different.)
Just stop paying and don't move out. It will take a long time for the bank to foreclose, if they even do that. And then you can go to court and ask who owns the deed? You may find out that it is impossible to figure out what the investment banks did with the deed because it was cut up into pieces and sold around the world. Some courts have ruled that the homeowner is entitled to keep/stay in the house.
Much food for thought here.
We tried to do a Loan Modification with GMAC. They made us fill out
a Mountain of Paperwork and then made us wait week after week and
than turned us down. When it comes to Negotiating with these kind of
People i can only say this, Dunk your Head in a Bucket of water and
Scream. You will receive Better Results than trying to Negotiate
with these Clowns. PS.Thanks for the Help Obama.
I am so happy that someone had the guts to publish a research paper that "goes against the grain" of the social norms and clearly articulates the financial and logical arguments to "walk away" from a bad investment.
I would like to piggy-back on that and "toot the horn" of an effort that I started (www.mbscollateral.com or "Coalition of underwater homeowners" group on LinkedIn) to unite the underwater homeowners and use the "collective bargaining" tactic to achieve what is needed (reduction in mortgage principals) without walking away.
.... please read more....
Workers have unions to articulate and protect member interests. Businesses have trade associations and lobbyists to do the same. Consumers, on the other hand have very little in terms of organization and structure to protect their interests. And, to be honest, in 99 percent of the cases that is not a big deal.
However, "big deals" do come around and then absence of such organization (that could unite the voices and actions of many individuals) is regrettable. The "big deal" right now is the situation with mortgage modifications - struggling consumers all over the country are "jerked around" by mortgage lenders and/or servicing companies.
The purpose of this group and www.mbscollateral.com website is to attempt uniting the consumers on this issue and coordinating the actions and efforts of many individuals to achieve LEVERAGE over the companies that we are dealing with. Please continue reading this site to find out what could be done and how these actions will get all of us closer to the final goal - REDUCTION OF MORTGAGE PRINCIPAL BALANCES IN LINE WITH MARKET VALUE OF THE PROPERTY.
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