Major Players Continue To ‘Walk Away’ From Poor Mortgages
I don’t know what I would do in the case of being seriously upside down in a mortgage. I have no idea what our house is really worth today in the present market. When we bought it we paid less than it appraised for. It was appraised again when we got a home equity loan and it had appreciated a good bit before we did some of the renovations. As long as I can continue to pay the mortgage I wouldn’t consider walking away as my house was never intended to be just an investment….it is my home and we have poured a lot of ourselves into it.
What’s your opinion? Would you consider walking away from your mortgage if you were seriously underwater? I don’t really see it as a moral failing but as a business decision just like the corporations make.
As underwater homeowners around the country despair over whether to keep paying their mortgages or just walk away, investors in the largest residential real estate deal in U.S. history have just walked away from 11,232 properties in one fell swoop.
On Monday a group led by Tishman Speyer Properties gave up the 56-building, 11,232-unit Peter Cooper Village and Stuyvesant Town apartment complex in Manhattan, turning the properties over to its creditors after defaulting on some $4.4 billion in debt. The group decided to “transfer control and operation of the property…to the lenders,” it told the Wall Street Journal. The $5.4 billion acquisition in 2006 was the single biggest residential property purchase in U.S. history.
It’s now worth an estimated $1.8 billion, putting the properties’ owners “underwater.”
Four years later, the joint venture by Tishman and BlackRock Inc. is part of what is undoubtedly the biggest walk-away in mortgage history.
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But distressed homeowners are often guilted into paying their mortgages, White argues.
Former Treasury Secretary Hank Paulson once said: “And let me emphasize, any homeowner who can afford his mortgage payment but chooses to walk away from an underwater property is simply a speculator – and one who is not honoring his obligations.”
January 27th, 2010 at 7:11 am
The way I think about it Sage is that the people I know who own a home (perhpas I should say who own a mortgage) own it because the home (house) is their home … If they had to walk away from it they would be broken hearted (as so many are) and I would too.I admire people who have downsized (not because inability to pay mortgages so much, as for the fact that getting older and downsizing: having less to clean and take care of, makes sense). I admire how well they adapt to having to say goodbye to a home they have lived in for so many years. I would (will) be heartbroken when I have to say goodbye to this house even when sometimes because the neighborhood is declining I want to wrap it up and say good bye to it… but I just love my space within the house too much to say goodbye to it just now.
My husband has a friend whose hours at work got cut down to almost nothing. He was paying $2,000.00 a month mortgage and with the cubback at work he was earning just about enough to pay for his mortgage. Through some Obama Administration program, he reapplied for a new loan (refinance) and now he pays $1,400. a month mortgage. He lost the five years he had already paid into his house as this refinancing thing is a 30 years refinance loan. I suppose that losing five years of payments into a home mortgage loan is better than the losing the home and the five years. Either way the economy sucks and Obama plans to make more cuts, i hear, on his state of the union address tonight.
January 27th, 2010 at 8:28 am
I downsized 4 yrs ago from a home I lived in 27 yrs and an area I had lived in for 34 yrs. I had to get rid of a lot of stuff from years of renovation and 2 estates I had been storing in sheds, basement and workshop. In some ways getting rid of stuff was a preliminary to moving as I started well before I put the house on the market and a lot went to the neighbors. After sending one neighbor home with a pickup load of old doors and hardware, his wife called me and asked me not to give him anymore stuff as he was starting to store it in her shed.
When I got the offer after the first showing, I had 6 weeks to get out and close. So I didn’t have a lot of time to think about it. On moving day I had a cry in the back yard and went on. Once I was settled here, I realized one important thing. What matters wasn’t in that house, it came with me.
At times I miss my gardens, but not the mowing and maintenance the house required.