“Dear Homeowner, we lowered your payment” letter

[djc]

[quote=temeculaguy]djc, I wasn’t trying to be cynical, just looking at it logically and asking myself the question, “why would a bank who is getting all of their money every month and on time, suddenly ask permission to lose money?” Even when people are in distress they don’t get deals like that, why solicit reworks from your performing loans if you are the bank?

Taking the “no free lunch approach” I assume there is a catch or a part of the scenario missing. Be sure to ask questions other than read the letter. There is one other possibility, it could be a scam of some sort from someone other than their bank or someone posing as the bank, verify the phone number with the actual mortgage servicer’s number listed online or on the bill. There are outfits fleecing people right now and there have always been mortgage companies marketing to get people out of good loans into bad ones, countrywide was notorious for this, marketing to their own clients.[/quote]

tg,

Thanks for your reply and clarification. I too thought ‘why would they do this, this makes no logical sense at all’, which is why I brought the question here to solicit answers from people whose opinion I respect on the subject.

Speaking of, I am interested in the criteria you are using for your Temecula house hunt. As you may remember, I’m renting in VR as this is shaking out and may end up staying in Temecula depending on a few factors. You have some specific things you are looking for, one of which is orientation to the sun which is something I had not even thought of. Would you mind sharing some of this information with me so I know what to look for and what to avoid? If so, my email is svtdriver(at)gmail.

thanks

[temeculaguy]

djc, i sent you an e-mail.

23109, when you talk yourself into something there’s no talking you out of it so just walk away after your free rent period. Your wife wants a bigger house, if you recall i hounded you about resisting her urge to buy because you were planning/expecting more kids and would outgrow the place, now you have. I remember writing extensively on the psychological influence of female nesting, those were good times.

Most of us, self included, have been upside down on houses before. I made a down payment in 1991 and was still underwater until about 1998. It didn’t hurt too bad, my payment was managable and I survived because i didn’t sell while I was underwater, I just had too small of a house. The one regret i have about that house is that i sold it, I really wish i had kept it as a rental, even in this market it would have equity and the rent is double what the payment was. You might think about getting the bigger house and keeping the current one, renting it out. It might sting for a few years but in time it will work out and you have the income to support it. R/E is funny like that, this last cycle twisted people’s mind thinking it goes up quickly, prior to this bubble, if you stayed in a house less than 3 years you lost money, keep it 20 years, you make money, those rules still apply today.

[temeculaguy]

djc, i sent you an e-mail.

23109, when you talk yourself into something there’s no talking you out of it so just walk away after your free rent period. Your wife wants a bigger house, if you recall i hounded you about resisting her urge to buy because you were planning/expecting more kids and would outgrow the place, now you have. I remember writing extensively on the psychological influence of female nesting, those were good times.

Most of us, self included, have been upside down on houses before. I made a down payment in 1991 and was still underwater until about 1998. It didn’t hurt too bad, my payment was managable and I survived because i didn’t sell while I was underwater, I just had too small of a house. The one regret i have about that house is that i sold it, I really wish i had kept it as a rental, even in this market it would have equity and the rent is double what the payment was. You might think about getting the bigger house and keeping the current one, renting it out. It might sting for a few years but in time it will work out and you have the income to support it. R/E is funny like that, this last cycle twisted people’s mind thinking it goes up quickly, prior to this bubble, if you stayed in a house less than 3 years you lost money, keep it 20 years, you make money, those rules still apply today.

[temeculaguy]

djc, i sent you an e-mail.

23109, when you talk yourself into something there’s no talking you out of it so just walk away after your free rent period. Your wife wants a bigger house, if you recall i hounded you about resisting her urge to buy because you were planning/expecting more kids and would outgrow the place, now you have. I remember writing extensively on the psychological influence of female nesting, those were good times.

Most of us, self included, have been upside down on houses before. I made a down payment in 1991 and was still underwater until about 1998. It didn’t hurt too bad, my payment was managable and I survived because i didn’t sell while I was underwater, I just had too small of a house. The one regret i have about that house is that i sold it, I really wish i had kept it as a rental, even in this market it would have equity and the rent is double what the payment was. You might think about getting the bigger house and keeping the current one, renting it out. It might sting for a few years but in time it will work out and you have the income to support it. R/E is funny like that, this last cycle twisted people’s mind thinking it goes up quickly, prior to this bubble, if you stayed in a house less than 3 years you lost money, keep it 20 years, you make money, those rules still apply today.

[temeculaguy]

djc, i sent you an e-mail.

23109, when you talk yourself into something there’s no talking you out of it so just walk away after your free rent period. Your wife wants a bigger house, if you recall i hounded you about resisting her urge to buy because you were planning/expecting more kids and would outgrow the place, now you have. I remember writing extensively on the psychological influence of female nesting, those were good times.

Most of us, self included, have been upside down on houses before. I made a down payment in 1991 and was still underwater until about 1998. It didn’t hurt too bad, my payment was managable and I survived because i didn’t sell while I was underwater, I just had too small of a house. The one regret i have about that house is that i sold it, I really wish i had kept it as a rental, even in this market it would have equity and the rent is double what the payment was. You might think about getting the bigger house and keeping the current one, renting it out. It might sting for a few years but in time it will work out and you have the income to support it. R/E is funny like that, this last cycle twisted people’s mind thinking it goes up quickly, prior to this bubble, if you stayed in a house less than 3 years you lost money, keep it 20 years, you make money, those rules still apply today.

[temeculaguy]

djc, i sent you an e-mail.

23109, when you talk yourself into something there’s no talking you out of it so just walk away after your free rent period. Your wife wants a bigger house, if you recall i hounded you about resisting her urge to buy because you were planning/expecting more kids and would outgrow the place, now you have. I remember writing extensively on the psychological influence of female nesting, those were good times.

Most of us, self included, have been upside down on houses before. I made a down payment in 1991 and was still underwater until about 1998. It didn’t hurt too bad, my payment was managable and I survived because i didn’t sell while I was underwater, I just had too small of a house. The one regret i have about that house is that i sold it, I really wish i had kept it as a rental, even in this market it would have equity and the rent is double what the payment was. You might think about getting the bigger house and keeping the current one, renting it out. It might sting for a few years but in time it will work out and you have the income to support it. R/E is funny like that, this last cycle twisted people’s mind thinking it goes up quickly, prior to this bubble, if you stayed in a house less than 3 years you lost money, keep it 20 years, you make money, those rules still apply today.

[murf2222]

23109, Am I really understanding your situation correctly?

You have a managable payment and knew of the volatile market going in. So whats the problem with honoring your contract? True, you don’t have as much *house-for-the-money* as what your neighbor can buy right now, but so what?

The fact is you make a good salary and can comfortably afford the payment on the contract you willingly signed. SUCK IT UP AND HONOR YOUR COMMITMENT YOU LOSER!

I would feel sorry for you if perhaps you lost your job and could no longer afford the payment, but that is not the case here.

There once was such a thing as *debtors prisons*………perhaps we need them again since words like Morality, ethics and pride don’t resonate with people like you.

Murf2222

[murf2222]

23109, Am I really understanding your situation correctly?

You have a managable payment and knew of the volatile market going in. So whats the problem with honoring your contract? True, you don’t have as much *house-for-the-money* as what your neighbor can buy right now, but so what?

The fact is you make a good salary and can comfortably afford the payment on the contract you willingly signed. SUCK IT UP AND HONOR YOUR COMMITMENT YOU LOSER!

I would feel sorry for you if perhaps you lost your job and could no longer afford the payment, but that is not the case here.

There once was such a thing as *debtors prisons*………perhaps we need them again since words like Morality, ethics and pride don’t resonate with people like you.

Murf2222

[murf2222]

23109, Am I really understanding your situation correctly?

You have a managable payment and knew of the volatile market going in. So whats the problem with honoring your contract? True, you don’t have as much *house-for-the-money* as what your neighbor can buy right now, but so what?

The fact is you make a good salary and can comfortably afford the payment on the contract you willingly signed. SUCK IT UP AND HONOR YOUR COMMITMENT YOU LOSER!

I would feel sorry for you if perhaps you lost your job and could no longer afford the payment, but that is not the case here.

There once was such a thing as *debtors prisons*………perhaps we need them again since words like Morality, ethics and pride don’t resonate with people like you.

Murf2222

[murf2222]

23109, Am I really understanding your situation correctly?

You have a managable payment and knew of the volatile market going in. So whats the problem with honoring your contract? True, you don’t have as much *house-for-the-money* as what your neighbor can buy right now, but so what?

The fact is you make a good salary and can comfortably afford the payment on the contract you willingly signed. SUCK IT UP AND HONOR YOUR COMMITMENT YOU LOSER!

I would feel sorry for you if perhaps you lost your job and could no longer afford the payment, but that is not the case here.

There once was such a thing as *debtors prisons*………perhaps we need them again since words like Morality, ethics and pride don’t resonate with people like you.

Murf2222

[murf2222]

23109, Am I really understanding your situation correctly?

You have a managable payment and knew of the volatile market going in. So whats the problem with honoring your contract? True, you don’t have as much *house-for-the-money* as what your neighbor can buy right now, but so what?

The fact is you make a good salary and can comfortably afford the payment on the contract you willingly signed. SUCK IT UP AND HONOR YOUR COMMITMENT YOU LOSER!

I would feel sorry for you if perhaps you lost your job and could no longer afford the payment, but that is not the case here.

There once was such a thing as *debtors prisons*………perhaps we need them again since words like Morality, ethics and pride don’t resonate with people like you.

Murf2222

[scaredyclassic]

These sorts of nasty comments are uncalled for. He is honoring the contract. The contract apparently allows for walking away. But even if it didn’t, even if he were breaching the contract, well, to say that breaching a contract is indicative of a lack of morality ethics or pride is, well, kind of just wrong.

Indeed, in contracts class at most any law school you might pass through, most professors will touch on the subject of efficient breach and the policy issues involved. Since contracts and exchanges are supposed to maximize utility and happiness, we as a society don’t want people locked into contracts and would prefer that they breach them when the breach results in greater utility all around.

there can be penalties for breach, and that’s certainly part of making sure the breach is efficient, so long as everyone understands and agrees on the penalties if any at the outset. or the contract could allow for breach by either party at any time. Like an employment contract could say, hey, you can quit any time, we can fire you any time. That would be arguably be more efficient in some cases, since the employer could get rid of a deadbeat and the employee could move on to greener pastures.

Maybe the easiest example to see is marriage. We prefer miserable people to get divorced. it’s less eficient for society if wives stay witht heir abusers, or men stay with women who won’t have sex with them. Better to breach the contract so that both parties can maximize their happines. Honoring the contract for its own sake probably doesn’t make us a more moral, ethical or prouder society. Ideally, it would be nice if the parties wanted to honor the contract, but would you yell at some woman who was breaching her marriage contract that she has no pride because she was breaking her marriage contract and dumping the dude who beat and raped her every night? so, grow up…don’t berate a guy for the efficient breach of his contract.

[scaredyclassic]

These sorts of nasty comments are uncalled for. He is honoring the contract. The contract apparently allows for walking away. But even if it didn’t, even if he were breaching the contract, well, to say that breaching a contract is indicative of a lack of morality ethics or pride is, well, kind of just wrong.

Indeed, in contracts class at most any law school you might pass through, most professors will touch on the subject of efficient breach and the policy issues involved. Since contracts and exchanges are supposed to maximize utility and happiness, we as a society don’t want people locked into contracts and would prefer that they breach them when the breach results in greater utility all around.

there can be penalties for breach, and that’s certainly part of making sure the breach is efficient, so long as everyone understands and agrees on the penalties if any at the outset. or the contract could allow for breach by either party at any time. Like an employment contract could say, hey, you can quit any time, we can fire you any time. That would be arguably be more efficient in some cases, since the employer could get rid of a deadbeat and the employee could move on to greener pastures.

Maybe the easiest example to see is marriage. We prefer miserable people to get divorced. it’s less eficient for society if wives stay witht heir abusers, or men stay with women who won’t have sex with them. Better to breach the contract so that both parties can maximize their happines. Honoring the contract for its own sake probably doesn’t make us a more moral, ethical or prouder society. Ideally, it would be nice if the parties wanted to honor the contract, but would you yell at some woman who was breaching her marriage contract that she has no pride because she was breaking her marriage contract and dumping the dude who beat and raped her every night? so, grow up…don’t berate a guy for the efficient breach of his contract.

[scaredyclassic]

These sorts of nasty comments are uncalled for. He is honoring the contract. The contract apparently allows for walking away. But even if it didn’t, even if he were breaching the contract, well, to say that breaching a contract is indicative of a lack of morality ethics or pride is, well, kind of just wrong.

Indeed, in contracts class at most any law school you might pass through, most professors will touch on the subject of efficient breach and the policy issues involved. Since contracts and exchanges are supposed to maximize utility and happiness, we as a society don’t want people locked into contracts and would prefer that they breach them when the breach results in greater utility all around.

there can be penalties for breach, and that’s certainly part of making sure the breach is efficient, so long as everyone understands and agrees on the penalties if any at the outset. or the contract could allow for breach by either party at any time. Like an employment contract could say, hey, you can quit any time, we can fire you any time. That would be arguably be more efficient in some cases, since the employer could get rid of a deadbeat and the employee could move on to greener pastures.

Maybe the easiest example to see is marriage. We prefer miserable people to get divorced. it’s less eficient for society if wives stay witht heir abusers, or men stay with women who won’t have sex with them. Better to breach the contract so that both parties can maximize their happines. Honoring the contract for its own sake probably doesn’t make us a more moral, ethical or prouder society. Ideally, it would be nice if the parties wanted to honor the contract, but would you yell at some woman who was breaching her marriage contract that she has no pride because she was breaking her marriage contract and dumping the dude who beat and raped her every night? so, grow up…don’t berate a guy for the efficient breach of his contract.

[scaredyclassic]

These sorts of nasty comments are uncalled for. He is honoring the contract. The contract apparently allows for walking away. But even if it didn’t, even if he were breaching the contract, well, to say that breaching a contract is indicative of a lack of morality ethics or pride is, well, kind of just wrong.

Indeed, in contracts class at most any law school you might pass through, most professors will touch on the subject of efficient breach and the policy issues involved. Since contracts and exchanges are supposed to maximize utility and happiness, we as a society don’t want people locked into contracts and would prefer that they breach them when the breach results in greater utility all around.

there can be penalties for breach, and that’s certainly part of making sure the breach is efficient, so long as everyone understands and agrees on the penalties if any at the outset. or the contract could allow for breach by either party at any time. Like an employment contract could say, hey, you can quit any time, we can fire you any time. That would be arguably be more efficient in some cases, since the employer could get rid of a deadbeat and the employee could move on to greener pastures.

Maybe the easiest example to see is marriage. We prefer miserable people to get divorced. it’s less eficient for society if wives stay witht heir abusers, or men stay with women who won’t have sex with them. Better to breach the contract so that both parties can maximize their happines. Honoring the contract for its own sake probably doesn’t make us a more moral, ethical or prouder society. Ideally, it would be nice if the parties wanted to honor the contract, but would you yell at some woman who was breaching her marriage contract that she has no pride because she was breaking her marriage contract and dumping the dude who beat and raped her every night? so, grow up…don’t berate a guy for the efficient breach of his contract.

[Author]

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