Article 43

 

Walk Away From Your Mortgage

middle-class-squeeze.jpghousingbubble.jpg

YOU WALK AWAY promises to teach you how to give up paying your mortgage and let the bank foreclose on your house.

If you are facing or considering foreclosure, you’re not alone.

· Are you stressed out about your mortgage payments?
· Do you have little or no equity in your home?
· Have you had trouble trying to sell your house?
· Is your home sinking under the waves of the real estate crash?
· What if you could live payment free for up to 8 months or more and walk away without owing a penny?

Unshackle yourself today from a losing investment and use our proven method to WALK AWAY.

If you QUALIFY for our plan:

· Your lender WILL NOT be able to call you in attempt to collect! 
· Your lender WILL NOT be able to collect any deficiency or loss they may receive by you walking away!
· You WILL be able to stay in your home for up to 8 months or more without having to pay anything to your lender!
· You CAN have the foreclosure REMOVED from your credit!

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Consumerist
February 28, 2008

You will immediately know the exact amount of days you have to live in your house payment free. We stay on top of your walk away plan and keep you up to date with weekly progress emails. We also will notify you if the lender is taking longer than expected subsequently giving you more time in your home payment free.

It’s like a spoof, except real!

For $995, they’ll give you half an hour of legal advice, and then file the necessary legal papers to get lenders to stop calling you. The site says it’s not a scam, that they’re not buying the house from you or anything like that. They will, however, enroll you in a “credit repair” service. Those kinds of companies are usually scams or have figured out some duplicitous way to trick the credit system.

Blogger Mish Shedlock called the company to ask WHAT THE DEAL WAS:

I spoke with John Maddux a “senior advocate” with You Walk Away (YWA) about the business. As one might expect it is booming. For $995 one receives a half hour of legal counsel where individual strategies are mapped out and all the laws pertaining to recourse vs. non-recourse loans as well as judicial procedures are explained to the customer. YWA also files the necessary legal papers to stop mortgage companies from calling and informs you immediately of how many days you will be able to stay in the house for free. Should the lender take longer to process the documents, YWA will keep you informed of any extra time.

Maddux informed me that YWA is currently operating in the state of California only, but Nevada and Florida will soon be coming online. Eventually they expect to be nationwide.

SOURCE

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Consumerist
February 29, 2008

We’ve talked about this issue a few times here on Consumerist and now the New York Times has gotten into the act with an article about people who’ve chosen use the new service “You Walk Away” to let the bank take over their mortgages after their homes turned out to be bad investments.

It seems that adjustable rate mortgages are changing the way people look at homeownership - and foreclosure:

“I think I could make a case that some borrowers were ‘renting’ (with risk), rather than owning,” Nicolas P. Retsinas, director of the Joint Center for Housing Studies at Harvard University, said in an e-mail message.

For some people, then, foreclosure becomes something akin to eviction—a traumatic event, and a blow to one’s credit record, but not one that involves loss of life savings or of years spent scrimping to buy the home.

“There certainly appears to be more willingness on the part of borrowers to walk away from mortgages,” said John Mechem, spokesman for the Mortgage Bankers Association, who noted that in the past, many would try to save their homes.

In recent months top executives from Bank of America, JPMorgan Chase and Wachovia have all described a new willingness by borrowers to walk away from mortgages.

Carrie Newhouse, a real estate agent who also works as a loss mitigation consultant for mortgage lenders in Minneapolis-St. Paul, said she saw many homeowners who looked at foreclosure as a first option, preferable to dealing with their lender. “I’ve had people say to me, ‘My house isn’t worth what I owe, why should I continue to make payments on it?’ ” Mrs. Newhouse said.

“You bought an adjustable rate mortgage and you’re mad the bank is adjusting the rate,” she said. “And sometimes the bank people who call these consumers aren’t really nice. Not that the bank has the responsibility to be your friend, but a lot are just so uncooperative.”

THE SAME SORTS of loans that drove the real estate boom now change the nature of foreclosure, giving borrowers incentives to walk away, said Todd Sinai, an associate professor of real estate at the Wharton School of Business at the University of Pennsylvania.

“There’s a whole lot of people who would’ve been stuck as renters without these exotic loan products,” Professor Sinai said. “Now it’s like they can do their renting from the bank, and if house values go up, they become the owner. If they go down, you have the choice to give the house back to the bank. You aren’t any worse off than renting, and you got a chance to do extremely well. If it’s heads I win, tails the bank loses, it’s worth the gamble.”

What do you think of this? Will you consider walking away if your house is worth less than you owe on it? The article quotes one expert who thinks as many as 5-6 million people may walk away from homes.

SOURCE

HOME RAGE

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Posted by Elvis on 03/02/08 •
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  1. A Concise, Modern History of U.S. Homeownership

    By Samuel Staley
    Reason Foundation
    May 10, 2009

    CITY JOURNAL senior editor Stephen Malanga has written an excellent, accessible, and concise history of federal efforts to boost homeownership since the 1920s. He does a nice job of showing how the current housing morass is the product of nearly a century of federal meddling by both Democrats and Republicans, each enamored with the holy grail of increasing homeownership.

    One gem from the essay is a history of a New Deal program that tried to clean up a mess created during the 1920s by then Commerce secretary Herbert Hoover when he attempted to increase homeownership through the Own Your Own Home campaign. As homeowners became oversextended, foreclosures increased and skyrocketed after the runs on banks sent banks into bankruptcy at the outset of the Great Depression. The federal solution was to create a new program that would prop up homeownership and subsidize mortgages and loans.

    The HOLC [Home Owners’ Loan Corporation] was a massive new federal agency, employing at its height some 20,000 people—appraisers, loan officers, auditors. By 1936, the agency’s total payroll was $26.2 million, the equivalent of $388 million today. The HOLC eventually received 1.9 million applications for mortgages and approved 1 million. Despite the more favorable terms that the HOLC offered, however, about one-fifth of the new mortgages defaulted, a failure rate that would sink a private-sector bank. Many who failed to pay might have been able to, but chose not to work out any arrangement with the government and essentially challenged the feds to kick them out—which officials were reluctant to do in the face of public opposition. HOLC loan officers classified about 65 percent of the defaults as resulting either from borrowers’ “noncooperation” or “obstinate refusal,” according to an analysis by Columbia University economist C. Lowell Harriss. “This type of noncooperation could sometimes be attributed to a desire to obtain free housing . . . an object that, in view of HOLC’s nature, was not difficult to realize,” Harriss wrote.

    The solution? Let the market determine homeownership rates based on the natural growth of the economy and income.

    SOURCE

    Posted by Burned Out Baby Boomer  on  05/11/09

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