Report shows strategic defaults increasing

User Forum Topic
Submitted by Arraya on March 27, 2010 - 5:04pm

http://blogs.reuters.com/rolfe-winkler/2...

How widespread are strategic defaults? Laurie Goodman and her team at Amherst Mortgage Insight yesterday released a report that shows they are indeed on the rise and for reasons we might suspect: negative equity and a more borrower-friendly environment.

The second reason should be kept in mind as we consider President Obama’s soon-to-be-announced plan to encourage principal reduction. If the plan is structured so that it gives incentives to default in order to secure principal forgiveness, well, expect defaults to spike.

Strategic default isn’t necessarily synonymous with mailing your keys to the bank and walking away. It may simply mean a borrower choosing to stop payments to the bank when economic incentives would have him do so. Amherst has come up with a novel metric to measure strategic default — the “default transition rate.” DTR looks at the percentage of borrowers who’ve never been more than one payment behind on their mortgage suddenly missing two payments in a row.

Lo and behold, negative equity leads more folks to strategically default, regardless of their credit score and whether they took out a liar loan:

Submitted by briansd1 on March 31, 2010 - 9:15am.

FormerSanDiegan wrote:

I gave up making sense of it when in a single thread there was a point made that our economy country runs on debt and a point made that debt repayment adds nothing to the economy.

I figure that I am simply too dense to understand.

FSD, look at the context of my responses.

I never said that debt repayment adds nothing to the economy. I was responding to a comment by jpinpb who suggested that if people don't pay their mortgages and spend the money they save, they are helping immediately the economy.

In this situation, it's just coincidental that the more money spent up front, now, the bigger the immediate boost to the economy. It's a short term boost.

I'm not saying that debt payment avoidance should be economic policy either. As you rightly pointed out, in the longer term that would be a problem. Banks would lack capital to lend and people who relied on the money would have to cut back.

Submitted by briansd1 on March 31, 2010 - 9:23am.

SD Realtor wrote:
I am okay with people walking away from homes and loans. If people want to stop paying and feel good about living for free then that is their prerogative. Why stop there though. The same opportunity is available with credit cards as well.

Yes, credit card loans and auto loans will be hit also.

Roubini identified this trend.

Credit card are unsecured. When people stop paying, there's nothing the banks can do.

Banks know that so that's why they are lowering credit lines and canceling unused account to stop borrowers from maxing their cards and walking.

As far as auto loans are concerned, the loan to value was too great and the terms too long. As the cars get older, we'll see a significant number of drivers turn in the keys to their cars.

Submitted by Arraya on March 31, 2010 - 9:23am.

Russell wrote:
briansd1 wrote:
SD Realtor wrote:

You don't get it. I am not berating Bill the deadbeat for walking on his loan. I am berating him for not leaving his home. Same with you or anyone else who is living in a home for free because THEY made the initial mistake. All I ask is that you move out and live somewhere you can afford? What is wrong with that?

What's the point of moving out if the bank won't foreclose?

As long as the bank doesn't foreclose, that house cannot be sold to anyone else at a lower price.

I kind of don't get that either, he is an enabled deadbeat not a saint.I do agree that it's the enabling that is at the core of it...taking human nature into the equation.

Yes, now bill will always expect free rent and it's a slippery slope from there. Next thing you know he will be expecting free food.

We really need our social manipulators to whip us into shape or people will turn into communists.

Submitted by jpinpb on March 31, 2010 - 10:21am.

briansd1 wrote:

I made a correct prediction of the living-for-free trend that we now see. That maybe unsavory behavior, in your estimation, but it’s a fact that is becoming more common. Why not recognize it for that it is? Just like you may not like the bailouts; but they are a fact of life and you're taking advantage of them through your house-flipping business.

As far as I'm concerned, I'm more upset w/the government than the people walking. As soon as the government mentioned bailout, they were setting up this situation. It was a given that anyone upside-down would walk.

Is all of this BS? Sure. Going all the way back to when banks were giving away money on liar loans and to dead people. I had the common sense to not participate in that scenario and it certainly wasn't b/c of lack of pressure.

The reality for most people is that they fell for the bait, bought the house they couldn't afford thinking they were going to flip and make money b/c housing prices were going to go to infinity and beyond. Just like when they became daytraders overnight until the tech bubble crashed.

Now these people are upside-down and the government is basically saying we're going to cut you some breaks. Once again, those people are going for it. I don't blame them as much as I blame the government.

So it's not that I condemn people for walking. I go to the source of this, the government.

I understand the financial decisions and contractual obligations. Morally, I'm not praising people for walking, nor living for free. I think of it as collateral undamage. As a consequence of them not paying their mortgage, they have "extra" income to spend. All these people who are not paying, and there's a whole lot of them, are going out to dinners and shopping, etc. Consuming. Which pretty much is a major source that drives our economy.

Submitted by NotCranky on March 31, 2010 - 11:04am.

Arraya wrote:
quote]

Yes, now bill will always expect free rent and it's a slippery slope from there. Next thing you know he will be expecting free food.

We really need our social manipulators to whip us into shape or people will turn into communists.

Funny thing you mention food. My five year old just got a case of the "greedy gimmies" over a bowl of blueberries sitting on the kitchen island. I scolded the hell out of him, with an aim to manipulate, lest he want free rent next.

Submitted by Arraya on March 31, 2010 - 11:17am.

lol

I think Bill has a case of the "greedy gimmies". Maybe this scolding will set him straight.

Submitted by briansd1 on March 31, 2010 - 12:20pm.

jpinpb wrote:

As far as I'm concerned, I'm more upset w/the government than the people walking. As soon as the government mentioned bailout, they were setting up this situation. It was a given that anyone upside-down would walk.

jpinpb wrote:

I think of it as collateral undamage. As a consequence of them not paying their mortgage, they have "extra" income to spend. All these people who are not paying, and there's a whole lot of them, are going out to dinners and shopping, etc. Consuming. Which pretty much is a major source that drives our economy.

I understand your frustration at to why the government hasn't stepped in to rectify the situation promptly or allowed the market to self-correct.

But the mistakes of the past cannot be easily corrected.

I felt the same as you do, but upon further reflection, I've come to the realization that the bailouts were necessary.

What would have happened had the correction been allowed to occur unabated without government bailout?

Some areas are down 50%. If those areas were allowed to drop 80%. What would the walking-away and living-for-free rates be?

I can guarantee you that if Carmel Valley dropped 50% to 60%, the walk away rate would skyrocket.

If banks were allowed to fail, leaving employees, depositors and contractors to fend for themselves, the loans portfolios would have been lost in some electronic neverland. And the length of foreclosure would be stretched out even longer.

How could banks foreclose without employees to do the work and retrieve the collateral documents?

Walking away is an economic decision. And so is living for free. Few walk away until the bank actually forecloses, so living for free is a given. As you say, it's collateral damage.

There isn't much the government can do but to "lessen the pain".

Its heartening to see that government policy is now moving in the direction of dealing with the moral hazards.
http://news.yahoo.com/s/afp/20100330/pl_...

Submitted by FormerSanDiegan on March 31, 2010 - 2:03pm.

briansd1 wrote:
FormerSanDiegan wrote:

I gave up making sense of it when in a single thread there was a point made that our economy country runs on debt and a point made that debt repayment adds nothing to the economy.

I figure that I am simply too dense to understand.

FSD, look at the context of my responses.

I never said that debt repayment adds nothing to the economy. I was responding to a comment by jpinpb who suggested that if people don't pay their mortgages and spend the money they save, they are helping immediately the economy.

In this situation, it's just coincidental that the more money spent up front, now, the bigger the immediate boost to the economy. It's a short term boost.

I'm not saying that debt payment avoidance should be economic policy either. As you rightly pointed out, in the longer term that would be a problem. Banks would lack capital to lend and people who relied on the money would have to cut back.

I guess I misinterpreted your statment that "debt repayment does not contribute to economic activity" as "debt repayment adds nothing to the economy"

I should have interpreted it as "debt repayment adds nothing to economic activity"

So, replace "the economy" with "economic activity" and my point still stands.

In fact there can be short-term negative impacts to people not paying their mortgages. Consider the impact of those who stopped making payments back in 2007 because their subprime mortgage reset. Even though those folks got a free ride for at least 3-6 months, the overall short-term impact to economic activity was negative.

I think jpinpb made a compelling argument from a microeconomic viewpoint which may not hold up in the macro sense, because the overall economy has feedbacks and other complexities.

Submitted by FormerSanDiegan on March 31, 2010 - 2:11pm.

On another note, I do not fault BillS78 (whether real or a troll) for operating in what he perceives to be his own self-interest.

Submitted by Arraya on March 31, 2010 - 2:21pm.

Actually, I think the context of the discussion was if one was to decide to give back their home to the bank and decided not to move out and live for free rather than going and renting. Within that context, living for free has a beneficial influence on the economy. Rather than leaving the residence before eviction. That is what Brian responded to.

Obviously there are adverse affects to not paying back debt in regards to banking. Though, banks seemed to have missed that simple point.

Submitted by CA renter on March 31, 2010 - 3:27pm.

briansd1 wrote:

I felt the same as you do, but upon further reflection, I've come to the realization that the bailouts were necessary.

What would have happened had the correction been allowed to occur unabated without government bailout?

Some areas are down 50%. If those areas were allowed to drop 80%. What would the walking-away and living-for-free rates be?

I can guarantee you that if Carmel Valley dropped 50% to 60%, the walk away rate would skyrocket.

If banks were allowed to fail, leaving employees, depositors and contractors to fend for themselves, the loans portfolios would have been lost in some electronic neverland. And the length of foreclosure would be stretched out even longer.

How could banks foreclose without employees to do the work and retrieve the collateral documents?

Walking away is an economic decision. And so is living for free. Few walk away until the bank actually forecloses, so living for free is a given. As you say, it's collateral damage.

There isn't much the government can do but to "lessen the pain".

Its heartening to see that government policy is now moving in the direction of dealing with the moral hazards.
http://news.yahoo.com/s/afp/20100330/pl_afp/usgovernmentregulatebankingvolcker_20100330181050?source=patrick.net

What would have happened if not for the bailouts?

1. We'd be much closer to the real bottom, and there would have been less damage to those who did not engage in reckless borrowing or lending -- and more damage to those who did (as it should be).

2. If we could have reached the bottom sooner and with less **long term** collateral damage, the people who were most prudent and responsible would have put a floor under pricing and economic activity, as we all have a price/situation at which we're willing to buy in.

3. If there were no bailouts, the damage would have been felt more immediately, creating more incentive to punish those who set us up for failure (and it WAS intentional/knowingly done). The reckless borrowers and lenders would have been punished. As it stands now, the most reckless are the ones being rewarded, while those who restrained themselves during the bubble are "rewarded" with artificially suppressed, ultra-low rates on savings, and reduced purchasing power to boot as all the idiots are back out there with 3.5% FHA loans and "tax credits" from our broke federal and state governments (who can't find the money for schools, though).

4. Those who believe the crisis has been averted are not looking far enough into the future. We will be paying for this for **decades** because there is NO WAY we can pay for all of this without tremendously burdensome taxes and reduced services, in addition to greatly reduced purchasing power, domestically and globally.

We could have suffered a severe, sharp correction that would have lasted a few years, but it would have given us a great foundation from which we could have built a sustainable economy. The govt/PTB have now eliminated that **much better** option.

Yes, the govt would have needed to step in, IMHO, but it would have been better if they had nationalized the banks (if necessary) and backstopped the FDIC, SIPC, and PBGC. Additionally, I was in favor of work projects to keep people employed and to help restore/improve our energy and transportation infrastructure. Increased funding for R&D in medical and energy technologies would also have been encouraged.

Submitted by jpinpb on March 31, 2010 - 6:42pm.

CAR - I share your sentiments completely.

Submitted by SD Realtor on March 31, 2010 - 7:47pm.

Could not agree with you more CAR.

Submitted by briansd1 on March 31, 2010 - 8:40pm.

CA renter wrote:

Yes, the govt would have needed to step in, IMHO, but it would have been better if they had nationalized the banks (if necessary) and backstopped the FDIC, SIPC, and PBGC. Additionally, I was in favor of work projects to keep people employed and to help restore/improve our energy and transportation infrastructure. Increased funding for R&D in medical and energy technologies would also have been encouraged.

I agree with almost everything you said. And I would have preferred your way also.

That would have meant much more "socialism" which TPTB at the time would not stomach. That would have meant nationalizing Citibank, BofA, etc.., firing all the executives, and wiping out the shareholders.

Work projects would have meant expanding government to build highways, trains, or whatever. I'm my opinion it's better than giving out money for free to the unemployed.

The public support for such drastic action would not have come about until massive pain had been felt -- massive foreclosures and walk-ways, house values dropping 80% in some areas overnight.

The value of money market accounts and other non-insured accounts would have been drastically cut.

If people think that Obama is socialist now, they would have been shocked at the socialism we would have seen had the whole financial system completely collapsed. Our whole society would have been reorganized by the government.

Anyway, we are well past that now... when Bush, Paulson and Bernanke began the bailouts, we entered the point of no return. What's done cannot be undone.

Submitted by briansd1 on March 31, 2010 - 8:45pm.

CA renter wrote:

4. Those who believe the crisis has been averted are not looking far enough into the future. We will be paying for this for **decades** because there is NO WAY we can pay for all of this without tremendously burdensome taxes and reduced services, in addition to greatly reduced purchasing power, domestically and globally.

I believe that they will declare victory when growth returns.

The can is kicked down the road and they'll call it the next crisis rather the continuation of the same crisis.

Considering this future that we are facing, do you think that there is some urgency to buy a house now before prices go up and inventory dwindles?

Submitted by CA renter on March 31, 2010 - 11:52pm.

briansd1 wrote:

Considering this future that we are facing, do you think that there is some urgency to buy a house now before prices go up and inventory dwindles?

Personally, I don't think home prices will go up, and I certainly don't think inventorty will dwindle further. Quite the opposite.

While there will be some stiff competition from foreigners with cash (already happening), I think home prices will be stagnant/slowly declining for many, many years. IMHO, it's the rising price of everything else -- that's NOT credit-based -- that will strip us of our purchasing power and quality of life.

Get ready for the global rebalancing (IMHO).

Submitted by BillS78 on April 1, 2010 - 10:54pm.

CA renter wrote:
BillS78 wrote:
SD Realtor wrote:
Yes they are living for free. Just remember you are paying for them. As will everyone else in your family who pays federal taxes. So each deadbeat that lives for free sucks money away from all the social programs that you feel are essential to our country.
No one is paying federal taxes for me, they are paying for the banking and lending industries that make your completely worthless profession possible. You are the real leech in this scenario, the bailout money and HAMP are your livelihood.

Bill,

You've been here for one day, yet you've managed to badmouth one of our valuable, long-time posters. Not cool.

Ca renter you are speaking to the wrong person. SDrealtor started with the insults calling me deadbeat and throwing around his high and mighty morality of what others should do.

He's a hypocrite to criticize anyone's RE decision when he was profiting off a skyrocketing bubble market created by irresponsible monetary policy. I'm sure he had no problem making great commissions on over inflated RE and now he wants to tell us what to do. Forget it.

Submitted by SD Realtor on April 1, 2010 - 11:41pm.

Sorry Bill I didn't force anyone to do anything. While I was running an engineering group I also owned a real estate brokerage. I told every client I had that I wouldn't have bought and they still did. You see, they don't blame others for their own mistakes.

Bill let me ask you a few questions...

Have you ever bought a car? If so then you knew the minute you drove off the lot the car was instantly worth less then the value of when you bought it. So did you stop making payments on that car? Now answer honestly Bill...

Second, when you bought the home, did you feel that the value would always go up Bill? Did you consider that the value may go down?

Third, Bill did someone force you to sign the loan documents? Were you coerced into signing?

Fourth, Bill do you know of any asset or stock or anything else where the value goes perpetually up all the time and forever?

Fifth, Bill did you stop making payments because of a hardship? Did you lose your job? Did you suffer some medical hardship? Were you defrauded by somebody? Did something happen to you that severely reduced your cash flow? Can you explain exactly why you stopped paying?

Sixth, Bill it is okay you stopped paying. However why didn't you simply move out? If you said well the asset is depreciating so I am done with it, why didn't you simply mail in the keys and move out?

So Bill you can call me whatever you want. I can write code, design ASICs, run engineering groups, I can sell real estate, lead teams of investors, and basically do whatever I want. When I make a bad decision financially, I live up to my obligation whether it is selling a property and taking a loss, or selling a stock or doing whatever needs to be done.

You on the other hand can tell us all why you should live for free when the rest of us either pay rent or pay a mortgage. You can hand over your keys and move out, but you choose not to. Why you do this, I don't know? More then likely you feel entitled to live for free. You feel like you have given the bank all this money. That it is the banks fault, that it is the real estate industry's fault. Right Bill? It is definitely someone elses fault that you signed the loan docs, so you Bill should get to live for free correct?

I am listening. Just give me a good reason why you should live for free? Why should any of us pay our mortgage? We all have suffered depreciation as well. See, if you wanna walk on your loan walk on your loan, no harm done, mail in the keys and go rent an apartment.

Submitted by scaredyclassic on April 2, 2010 - 12:14am.

but there is no goddamn point to not moving out; theya re letting the houses SIT VACANT in many cases. if there weren't anyone in there, the place would just be abandonned!!!!

what a crock.

nobody's freeloading.

the bank shuld be paying these people like Bill to hang around and keep an eye on the place!!!

Submitted by BillS78 on April 2, 2010 - 1:27am.

You've made some poor assumptions and math is not your friend, but I'll humour you.

flu wrote:
Don't get all worked up this one. I call B.S. on this one. Let's do some analysis

$114k salary.

You got one right

flu wrote:
Supposedly had $57k to put down, ended up putting down $11.7k
I had saved up over $75k by the beginning of 07 without touching my IRA OR 401K. And 3% of $570K is $17,100.

flu wrote:
20 months of non-rent paying, are we to believe that now all the sudden you ahave $200k post-tax to put down?
You missed the part where I said "With all the money I've saved AND MADE IN THE MARKET". I was talking about the stock market and commodities futures markets. I did very well in the last 2 years. I could sell all my long term investments without touching my IRA and 401K and have over $250k in cash after paying long term capital gains taxes.

My biggest monthly expense is direct TV.

Submitted by BillS78 on April 2, 2010 - 1:52am.

cabal wrote:
If you don’t mind further sharing…

- Have you received pestering calls from bill collectors?

- What has happened to your credit score?

- Who is your lender?

- Are you current on property taxes?

- Are you concerned about qualifying for another mortgage?

FYI – I don’t agree with everything SD R says, but his comments are usually well balanced, measured, and insightful. He adds a lot of value to this board.

- I had a lot of calls in the first few months and that was when I thought a NOD would be sent out, then almost nothing for a while, more calls again last summer/fall and then nothing again.

- My FICO has dropped slightly but that's due to canceling some credit cards. I'm still in the high 700's.

- I'm not mentioning my lender, I don't need bitter crazies from here trying to track me down.

- I think so, you'd have to ask my lender. My property taxes are included in the monthly payment. If they weren't being paid it seems like the county would have taken the property by now.

- I'm not at all concerned, just want this taken care of by the end of next year. I'm thinking of taking a year to travel around the world or maybe join a band and go on tour one last time.

Submitted by BillS78 on April 2, 2010 - 2:20am.

Arraya wrote:
Flu caught him. he embellished on how much he has saved. who knows how much else this deviant deadbeat is hiding.
Learn how to read you deviant child molester.

Submitted by BillS78 on April 2, 2010 - 2:20am.

flu wrote:
True, he also does mention "stock investment", but that would be taxable income, and his tax rate would be for $114k base salary + $120k (alleged gain in stock), which would put him into a high tax bracket. Also, no itemized deduction from his mortgage payment and I assume his property tax.

I don't know...Seems embellished. That's why it's the internet. Believe maybe 10% of what you read imho.

Flu you are as retarded as Sarah Palin's baby TRIsomyG.

Long Term Capital Gains - educate yourself so you stop sounding like such a fool.

Submitted by Arraya on April 2, 2010 - 5:42am.

BillS78 wrote:
Arraya wrote:
Flu caught him. he embellished on how much he has saved. who knows how much else this deviant deadbeat is hiding.
Learn how to read you deviant child molester.

That's it. I'm placing you under internet arrest. By the power of Piggington's I demand you return all your ill gotten gains to the NAR and mortgage bankers association because the are the only ones aloud to profit off of stupidity and greed. You are messing with the primal forces of nature, Mr Bill, and you must ATONE!

Submitted by flu on April 2, 2010 - 7:27am.

BillS78 wrote:
flu wrote:
True, he also does mention "stock investment", but that would be taxable income, and his tax rate would be for $114k base salary + $120k (alleged gain in stock), which would put him into a high tax bracket. Also, no itemized deduction from his mortgage payment and I assume his property tax.

I don't know...Seems embellished. That's why it's the internet. Believe maybe 10% of what you read imho.

Flu you are as retarded as Sarah Palin's baby TRIsomyG.

Long Term Capital Gains - educate yourself so you stop sounding like such a fool.

Yeah, right....Hmmm.

Speaking of retard, I'm not the one not paying my bills and being so cavalier about it, my deadbeat friend. I think I'll start calling you DeadbeatBill as your handle.

Submitted by BillS78 on April 2, 2010 - 9:03pm.

SD Realtor wrote:
Sorry Bill I didn't force anyone to do anything. While I was running an engineering group I also owned a real estate brokerage. I told every client I had that I wouldn't have bought and they still did. You see, they don't blame others for their own mistakes.
And I haven't forced the bank to refrain from filing a NOD. Listen up SD Jackass, I never blamed anyone but myself for my purchase.

You choose to profit from clients' deciding to buy, I choose to profit from my lender's decision not to foreclose. You're a bitter little hypocrite that wants to hold others to higher standards than you are willing to hold yourself to. Why didn't you stop being a realtor if you couldn't properly represent your clients?

SD Realtor wrote:
Bill let me ask you a few questions...

Have you ever bought a car?

I've purchased two in my lifetime, both were used and I paid cash both times. Whats this survey for again?

SD Realtor wrote:
Second, when you bought the home, did you feel that the value would always go up Bill? Did you consider that the value may go down?
Are you selling magazine subscriptions with this survey? The future value wasn't critical to me because I could and still can afford it, I just chose not to continue making payments. Bet that really upsets you.

SD Realtor wrote:
Third, Bill did someone force you to sign the loan documents? Were you coerced into signing?
Nope, and I never forced the bank to let me live here for free. Did someone force you to be a realtor or were you just born an a-hole?

SD Realtor wrote:
Fourth, Bill do you know of any asset or stock or anything else where the value goes perpetually up all the time and forever?
Why, are you taking over for Madoff?

SD Realtor wrote:
Fifth, Bill did you stop making payments because of a hardship? Did you lose your job? Did you suffer some medical hardship? Were you defrauded by somebody? Did something happen to you that severely reduced your cash flow? Can you explain exactly why you stopped paying?
Because I felt like it and it is well within my rights under the purchase agreement. My number one priority as the CEO of myself is to maximize my shareholders' wealth. Didn't you get the memo? Corporations are people now, and we're all individual corporations.

Why did you continue to work as a realtor if you couldn't properly represent your clients? Was it because even though you spew you ridiculous B.S. around here you're more than willing to profit from your clients' purchases? Good job hypocrite. Or will you say it's not your job to convince them not to buy just like it's not my job to mail in my keys?

SD Realtor wrote:
Sixth, Bill it is okay you stopped paying.
Oh, thanks for your blessing. It means less than nothing to me.
SD Realtor wrote:
However why didn't you simply move out? If you said well the asset is depreciating so I am done with it, why didn't you simply mail in the keys and move out?
I didn't feel like it. Why does it upset you so much, are you really that insecure?

SD Realtor wrote:
Why should any of us pay our mortgage? We all have suffered depreciation as well.
You don't have the balls to default on your mortgage, you're just a little bitch.
SD Realtor wrote:
See, if you wanna walk on your loan walk on your loan, no harm done, mail in the keys and go rent an apartment.
That's okay, I prefer to live here for free and continue to make people like you cry.

I figured that posting my experience here would bother some but I didn't realize people like you and Swine Flu would be such little bitches about it. This is getting boring, have fun telling other people how to live their lives.

Submitted by cabal on April 2, 2010 - 10:47pm.

BillS78 wrote:
cabal wrote:
If you don’t mind further sharing…

- Have you received pestering calls from bill collectors?

- What has happened to your credit score?

- Who is your lender?

- Are you current on property taxes?

- Are you concerned about qualifying for another mortgage?

FYI – I don’t agree with everything SD R says, but his comments are usually well balanced, measured, and insightful. He adds a lot of value to this board.

- I had a lot of calls in the first few months and that was when I thought a NOD would be sent out, then almost nothing for a while, more calls again last summer/fall and then nothing again.

- My FICO has dropped slightly but that's due to canceling some credit cards. I'm still in the high 700's.

- I'm not mentioning my lender, I don't need bitter crazies from here trying to track me down.

- I think so, you'd have to ask my lender. My property taxes are included in the monthly payment. If they weren't being paid it seems like the county would have taken the property by now.

- I'm not at all concerned, just want this taken care of by the end of next year. I'm thinking of taking a year to travel around the world or maybe join a band and go on tour one last time.

I’m stunned you credit score hasn’t been compromised because it means you are being reported to the credit agencies as current? If you have a recent credit report, I would be interested in seeing how your lender is reporting your payment. For people undergoing 3 month loan mod trials, I’ve read the reduced payments are reported as 90+ days late, resulting in a 100+ point debit to their credit score.

Submitted by Arraya on April 3, 2010 - 6:22am.

It all depends on what else is going on in their credit. The weaker all the other factors are, the bigger dip. If you implement credit strengthening moves before hand as well as following best practices after, you can keep your score from falling too far.

My friend who went through a foreclosure and I did a little case study on his credit during the process. Pre-foreclosure he was at about 730. It dipped to 648, probably about 9 months after he stopped paying and 1 month after he moved out(Which we figured should be the low point). When he checked again less than a year later, it was back up to the pre-foreclosure range.

Submitted by patientrenter on April 3, 2010 - 6:13am.

BillS78 wrote:
......

SD Realtor wrote:
Fifth, Bill did you stop making payments because of a hardship? Did you lose your job? Did you suffer some medical hardship? Were you defrauded by somebody? Did something happen to you that severely reduced your cash flow? Can you explain exactly why you stopped paying?
Because I felt like it and it is well within my rights under the purchase agreement. My number one priority as the CEO of myself is to maximize my shareholders' wealth. Didn't you get the memo? Corporations are people now, and we're all individual corporations.

I figured that posting my experience here would bother some but I didn't realize people like you and Swine Flu would be such little bitches about it. This is getting boring, have fun telling other people how to live their lives.

It is good to hear what's actually happening out there. For those like myself and SDR (and a few others) who don't really like the idea of having less careful and less responsible people getting rewards for their behavior, paid for by people like us, it is very trying to see their actions and their attitude.

When next we hear that poor unfortunate homeowners need to be bailed out with another trillion dollars of our money, we will be that much less sympathetic. Of course, we will be outvoted, but we will be less sympathetic, maybe even completely unsympathetic.

Submitted by jpinpb on April 3, 2010 - 7:29am.

cabal wrote:
I’m stunned you credit score hasn’t been compromised ...

An acquaintance of mine did not pay on her condo is something like 8-10 months, did not get a NOD, did a short sale and after a few months her credit score is back in the upper 600s.

patientrenter wrote:
When next we hear that poor unfortunate homeowners need to be bailed out with another trillion dollars of our money, we will be that much less sympathetic. Of course, we will be outvoted, but we will be less sympathetic, maybe even completely unsympathetic.

Call me a cold-hearted bitch, but I was never sympathetic. I survived the last real estate downturn cycle in the '90's. I experienced it first hand, except I did not get any help from the government and was very stressed. I had to bail myself out w/2 jobs and renting rooms out. I chose not to walk b/c of my down, though a financial counselor told me to walk even back then. My credit still sucked b/c payments were late.

I qualified to buy that home - and back then loan apps were scrutinized. Did not expect the economy to turn and work to suddenly stop. Life happens. Anyone having a hard time for whatever reasons and can't do the mortgage payments in these times can always go back to renting. Renting is not a crime or a sin. Credit can eventually be restored. No sympathy from me ever. Suck it up. I did and live to tell about it.

Probably that experience made me a little wiser and kept me from buying during this last bubble. All these people being "helped" will not only suffer from moral hazard, but will only be deprived of knowledge and will have expectations in the future of getting assistance.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.