Walking away, letting the bank foreclose - ramification?????'s

[DisneyBamaFan]

...I struggle with the decisions my friends have made. Their actions help to make the housing situation worse and ultimately because I do "what is right" I am taking on and paying for some of their decision and that bugs me...

Actually, the NY Times article suggests that this action, if carried out by enough home owners, could actually be beneficial to everyone if it forces banks into becoming a little more reasonable in their lending practices. It could allow a much more relaxed flow of capital, which could help the housing markets rebound (which would help everyone). In effect, it could force banks into the behavior that all of the banking packages were meant to do, but failed at completely.

In essence, let the markets correct themselves by letting the consumers walk away (again, perfectly legal), forcing the banks to change tactics to compete in the new marketplace. Something to consider...

 

[SaraJayne]

Actually, they are acting like responsible adults. They are making financial decisions. The banks knew the risks when they made the loan. The individuals know the repercussions of default. No one is breaking the law...

Walking away from a legal contract just because you "feel like it" is in no way, shape or form acting like a responsible adult.

 

[Art 1]

Walking away from a legal contract just because you "feel like it" is in no way, shape or form acting like a responsible adult.

You and I know that, and so do the banks. Sadly the banks were forced into giving loans to the types who will just walk away.

 

[DisneyBamaFan]

Walking away from a legal contract just because you "feel like it" is in no way, shape or form acting like a responsible adult.

Sorry - that is completely untrue. One of my responsibilities that I have to my family is to ensure their financial security. I have walked away from a few contracts in so doing.

If a mortgage is going to damage the financial future or security of a family, the responsible thing to do is to work with the bank to find a reasonable solution. If the bank is inflexible, it could be very foolish and irresponsible to stay.

Remember, the bank loaned the money with the house as collateral. A decision to walk away is really a decision to give the bank the collateral in payment instead of money. It is all in the contract. You would not be defaulting as much as you would be using an agreed upon alternative form of payment.

As an example - if a bank allowed you to either pay them in cash or jellybeans, and you found that you could get the jellybeans cheaper than the cash required to repay the loan, you would be foolish to continue paying in cash - even if that were the bank's preference. If the bank really didn't want the jellybeans, they should never have written that into the contract...

 

[SaraJayne]

Sorry - that is completely untrue. One of my responsibilities that I have to my family is to ensure their financial security. I have walked away from a few contracts in so doing.

If a mortgage is going to damage the financial future or security of a family, the responsible thing to do is to work with the bank to find a reasonable solution. If the bank is inflexible, it could be very foolish and irresponsible to stay.

Remember, the bank loaned the money with the house as collateral. A decision to walk away is really a decision to give the bank the collateral in payment instead of money. It is all in the contract. You would not be defaulting as much as you would be using an agreed upon alternative form of payment.

As an example - if a bank allowed you to either pay them in cash or jellybeans, and you found that you could get the jellybeans cheaper than the cash required to repay the loan, you would be foolish to continue paying in cash - even if that were the bank's preference. If the bank really didn't want the jellybeans, they should never have written that into the contract...

I guess we'll have to agree to disagree. I will never believe that walking away from a financial obligation just because you feel like it is being responsible...and I'm referring to people who have the means to pay and just don't want to.

I'm also not one to buy into the belief that all banks are evil and out to get you.

YMOV

 

[SaraJayne]

Sorry - that is completely untrue. One of my responsibilities that I have to my family is to ensure their financial security. I have walked away from a few contracts in so doing.

If a mortgage is going to damage the financial future or security of a family, the responsible thing to do is to work with the bank to find a reasonable solution. If the bank is inflexible, it could be very foolish and irresponsible to stay.

Remember, the bank loaned the money with the house as collateral. A decision to walk away is really a decision to give the bank the collateral in payment instead of money. It is all in the contract. You would not be defaulting as much as you would be using an agreed upon alternative form of payment.

As an example - if a bank allowed you to either pay them in cash or jellybeans, and you found that you could get the jellybeans cheaper than the cash required to repay the loan, you would be foolish to continue paying in cash - even if that were the bank's preference. If the bank really didn't want the jellybeans, they should never have written that into the contract...

And this type of thinking/mindset is exactly why banks are where they are today.

 

[DisneyBamaFan]

And this type of thinking/mindset is exactly why banks are where they are today.

LOL - you are entitled to your own opinions, but not your own facts. I could explain the process by which banks and insurance companies were allowed to begin to speculate with depositor and policy holder funds, but I would be wasting my time. Suffice to say that debtors walking away from bad investments was not the cause...

 

[DisneyBamaFan]

I guess we'll have to agree to disagree.

I'm cool with that...