Why would anyone want to let their home go into foreclosure? Many people however are facing this situation but before they let their current home go into foreclosure they will simply go buy another home. Some view this practice as immoral. Maybe it is and maybe it isn't. I would think each person's reasons for considering this solution are very different and can range from a loss of income or relocation where the homeowner cannot hope to sell his home for what he owes to those who simply refuse to pay a mortgage payment every month on a home where the mortgage amount is drastically higher than the home is worth. Is the current real estate market their fault? Is it immoral to want the best for your family? Is it immoral for a homeowner who will most certainly face foreclosure due to unforeseen circumstances to be penalized for those unplanned events?
There are many reasons why someone would consider buying another home then letting their current home go into foreclosure and I for one do not consider myself a judge and jury of other people's decisions. I simply help people buy homes.
This practice of letting a home go into foreclosure after buying another is not new. Every major downswing in the real estate market has experienced this situation and this practice. It's not against the law to let your home go into foreclosure and the consequences are high...ruined credit and limited buying power, not to mention the stigma attached to foreclosure. Despite the pitfalls some people will choose this path. I help people navigate this complicated process.
If you are considering this as a financial solution please do not take my general advice as the the one and only truth. Consult an attorney and/or a tax specialist to determine how a foreclosure can affect your specific situation. There are many instances where my advice may not fit your circumstances. The internet is a vast and endless resource of information and can answer almost any question. If, after investigating other options you feel this is your only alternative please feel free to contact me, I may be able to help. If you are not within my service area I can refer an agent to help you locate a home.
62 comments:
Kathy,
You mentioned in an earlier post that the lender may go after the HELOC. I assume most people who foreclose right now have HELOC as secondary loans, how do the lenders go after them?
Unbelievable. Take out a new loan while planning to shaft the old lender. People like you will always find a way to make money by leaving your ethics at the door - or are you just encouraging others to? Immoral? Grossly. Illegal - certainly. It's illegal to take out a loan and leave out the part about defaulting on the old one....
What amazes me is how ignorant some people can be. And it's truely amazing that they show no qualms about showing that ignorance to all the world. Nothing in this scenario is illegal and morally the banks should have never given these people loans in the first place but the banks sure didn't care that many of these people could never hope to qualify for the homes they bought much less make the exaggerated payments after the interest rates re adjusted. If you want to get into morality try questioning the banks and lenders. They created this mess and now they are reaping what they sow. So if you want to go on a tangent about morals try opening your eyes before you look the fool.
Incase anonymous number two is as ignorant as he appears the last comment was aimed directly at your stupid and obviously uneducated comment. If you want to rant and rave try doing your homework before you start commenting.
Maybe we should let the Calfornia DRE make the call? I'll forward them the link. :-)
I bet there will more then one person forwarding the link to the CA DRE. Oh and don't call me stupid, I dealt with your kind when I worked Short Pays/MODS for WFB from 1993-1997. Might want to inform your "clients" that employers review Credit Reports and they might not take kindly to a F/C walk after a new home purchase.
To everyone who wishes to leave a comment...Please do, everyones opinion is valid but please don't start name calling. No one is stupid and everyone has reasons for their opinion. So leave all the comments you would like but don't attack other commenters.
Kathy
Hi Kathy,
I find your post to be at best distasteful, and at worst, encouragement for fraud.
The entire premise behind your recommendation is that people should take out a new loan before information becomes available that would make the lender reject that loan.
There are rules against these kinds of shenanigans in nearly every other sphere. A corporation cannot issue a bond and fail to disclose a material loss it knows it is about to experience. A divorce settlement would not be binding if one of the parties was holding back a huge windfall he/she was about to receive.
If you were lending the money, would you view the fact that the borrower was about to default as material? How would you feel if the headline on the union Tribune read, "Kathy Neilsen obtains loan by hiding material facts from lender". Would you think it appropriate for someone to get their real estate license 1 day before being convicted on felony money laundering charges?
You are not stupid, but you should be ashamed. You are at best encouraging irresponsibility, and at worst outright fraud.
You may want to consider whether this kind of marketing will inflame your more honest and upright clients and potential clients. I hope it does.
Zac Nesper
San Diego
SHAME ON YOU
I was once told that money can cause a distortion of ethics. I hope the F.B.I. investigates you and you spend the rest of your natural life in jail
So I'm wondering how you view the banks who quite clearly gave many people money knowing they eventually would not be able to afford their house payment. Especially when they were coerced into taking the loan based on a lender telling them all they have to do is refi when the payment adjusts. They were set up from the very beginning. The banks ensured that not only would they be able to get higher loan balances and higher fees but they knew that in as little as 1 year that same borrower would be knocking at their down again needing to refi. Why is it banks can get away with such blatant greed yet the everyday consumer who foolishly believed what they were told is now held to a higher standard? I won't argue the fact that many people out there took advantage of the easy lending guidelines and many are now getting what they deserve but just as many if not more were victims. They believed what they were told. Some were even lied to or pressured into not asking questions. Some simply never understood what they were getting into. Because they were prey they were taken advantage of and those are the people I can and will help. I'm sorry you feel that everyone is dishonest. The fact is there are many honest hard working people either facing foreclosure or years of high debt, paying a mortgage payment on a home where the amount you owe is far beyond what the home will appraise for, for many years.
When banks give money away so easily, with little to no verification they should expect some people will never be able to repay their obligation. They are now suffering and so are the honest people who were caught up in this whole "get something for nothing" lending mentality
Kathy,
I applaud you and everything you are doing to help people who were grossly mistreated by lenders. From the many negative comments here it's plain to me that these people have little understanding of what actually happened to so many people. Either that or they simply know and associate with corrupt and dishonest people who have used and abused the system for their own gain and expect that every person out there is the same. I'm here to tell you get off your high horses and have a little compassion. There are many devasted families out there who have or will lose their home through no fault of their own. If only one homeowner can regain their respect and self esteem by purchasing another home before they lose the one their lender won't help them save then Hooray for you Kathy.
regarding the post at March 31, 2008 8:22 AM...
No where in your pathetic rant do you give any blame to the reckless irresponsible buyer. Sure, the banks are to blame, mainly for coming up with these loans for "broke, not credit worthy buyers without jobs", but are you telling me that the buyers couldn't do a bit of research on their own? How many times do you sign and initial the closing papers and loan docs? They tell you what the mortgage is gonna be, and they tell you how to calculate the reset rate too. Maybe you should blame the jackass who lied about his income, and relied on his home to quadruple in value the next 5 years in order to make future payments. The buyers are JUST as responsible as the lenders, and while you are blaming people, blame the media for hyping up owning real estate as the only way to make millions.
So they can go back to renting like the rest of the families that got stuck not being able to afford a house. If they had done their HOMEwork they never would have bought a house at such outrages prices. I think you blame the banks to much. We could all max out all our credit cards and blame the banks when we cant pay those back as well. Why not then maybe we can ask the taxpayers for a bailout then as well!
How long have you been a realtor?
How many overpriced houses did you sell?
How many are now in foreclosure or behind in payments?
I see NOTHING wrong with it, its legal at that's that.
We need to bring back "Debtors Prisons" that would end this crap quick.
But is Laize Faire (or however it spelled). Let the market be...
Hi Kathy,
First of all, I applaud you for posting my criticism. Allowing unfiltered responses to show is big of you-no question there.
No one is defending the banks. Certainly people were taken advantage of, and I am in no way defending those actions.
Good people can disagree over how much responsibility the people taking the loans out bear. Certainly those folks stood to benefit if real estate continued appreciating, but I can see both sides of that argument.
My brother is currently about to have his second child, is scraping to get buy, and is 50K underwater on his 300K condo. I advised him not to buy at the time, but the personal impact is not lost on me.
Regardless of how you feel about the actions of those banks, in simple English, two wrongs don't make a right. Just because one bank screwed a client, doesn't give that client the right to screw another bank.
The argument that big business is out to screw everyone, so we shouldn't hesitate to screw them when convenient doesn't hold water with me. We are responsible for our own actions, not those of others. Purchasing a house while preparing to foreclose is dishonest, plain and simple.
Zac Nesper
San Diego
ah, so the bankers are the bad guys, I would venture to say that the realtors know more personal information about buyers than the bankers.
in most cases it took a realtor to sell the the home to the buyer, that is where the fraud started.
Through no fault of their own?? A few people might fall into this category. Those that lost jobs or got sick but the vast majority made the bed they are sleeping in. Most of them bought houses they could not afford, period. 90% of my friends and coworkers did it, some of my family members did it and millions of other Americans did it. They saw dollar signs as price houses went through the roof. They rolled the dice, bought a house using goofy loan, teaser rates and 100% financing because it was the only way they could. using traditional financing they could never had afforded those prices.
Now as far as walking away goes I might not 100% agree with it but it's not immoral nor illegal. The mortgage is a contract between the buyer and the bank. It has rules, Pay or the bank will take the house back. Walking away is just exercising your option to not pay. Then the bank exercises it's contractual option to take the collateral (the house). Like it or not it's all in the contract. Banks and businesses do it all the time. If my option was to stay in an upside down loan for the next 20 years and eat Top Ramen or buy another house I can afford without living on water and crackers I think I would choose that option.
Thanks for the good story. I live in California and know a neighbor who did exactly what you are reporting about. Only in this case, the wife quit claimed her name off the property. Her income was NOT REQUIRED to buy their house.
I have done this before (wife purchases house). My wife has a high FICO, and I make twice the income with almost zero FICO score. Why? I own my own business with NO DEBT, no plastic, lots of savings. FICO scores measure how you pay back DEBT. If you have NO DEBT, you have no FICO. I don't care about a bad credit report, since I am not a debtor ie no loans no plastic. The lender required us to have both names on the mortgage even though only one of us bought it. Credit scoring is a scam to encourage people to go into debt. We are both savers, and Realtors, mortgage lenders and banks HATE SAVERS---because we don't give them our hard earned money.
Once the QUITCLAIM document was filed with the County recorder. The husband placed a notice in the newspaper stating he was solely responsible for the mortgage. In the mean time, the wife found a suitably priced house and bought it using only her credit information. ONLY SHE WAS THE BUYER. The husband gets the bad credit (He does not care since he has NO OTHER DEBT and NO CREDIT), the wife buys a new house. It looks perfectly legal to me. Since SHE was the one buying the house, she did not lie. If she wanted her "deadbeat" husband to move in with her thats her problem. LOL ROFL.
They told me the loan company did not care--they had 20% to put down on the house. ITS ALL ABOUT MONEY - NOT MORALITY!
Banks are part to blame, to be sure. However, this fact does not absolve the purchaser of their responsibilities and share of the blame. Both parties screwed up, and both parties should be punished. The banks are taking the hit and except for the few that will most likely be bailed out, they'll get what they deserve.
But we're talking about people who didn't do their homework before making the biggest purchase of their lives. These people need to learn a few important lessons when it comes to risk and responsibility. If they are allowed a free pass, nothing is learned, and the process will repeat itself.
These folks bought into the lies of people who told them "housing only goes up in price" without thinking about how these agents make their money (hint: it doesn't involve telling people to NOT buy right now). They stood a chance of profiting greatly from their "investment", yet they want no part of the consequences when things don't go their way. If they wound up selling their houses and made a large profit, should that profit be taken away from them because they didn't know what they were doing? No? Then why give the free pass when they take a loss?
You're messing with the risk/reward ratio here, and you're not going to like the consequences. Banks will catch on eventually, they'll hike loan requirements up in response, more lower-end buyers get locked out, market dives further due to fewer buyers, more people default. Defaulting will wind up carrying a harsher penalty, perhaps forcing the defaulter into bankruptcy rather than being limited to the asset backing the mortgage.
You entered an agreement. Would you like it if the bank increased the principal on your mortgage when the value of your house increases? No. You'd be screaming mad. But when the situation is borrower shafting the lender, and then shafting ANOTHER lender for another loan they'll likely walk away from when it becomes an inconvenience to them, we're supposed to look at them and say "hey, they did the right thing"?
No wonder kids are growing up with shallow morals. Look at the role models.
Yes, Hooray for you Kathy. How many people did you personnaly place in unaffordable homes at the peak of the market? You and the others Realtors are just as much to blame as the banks for encouraging people to take out loans for more than they can possibly afford. And the devasted (sic) families out there are not to be pittied. People who spend more than they can afford out of greed and stupidity are not to be pitied... they are to be scorned! Anyone with internet access in the last two to three years knew that home values were inflated and the bubble was surely to pop. Shame on you Kathy. Shame on all the real estate agents that pretended there was no bubble, and are still pretending - by implying that we have not met the bottom of the bubble yet. And I hope you go to jail for all the lives you have personally worked to ruin and the money you are contriving to steal from the lenders with this foolish website.
Screw the banks. You know, I had to walk from a house in 2002 because a bank screwed up on paperwork on a refi big-time and I HAD to relocate overseas. They refused to fix the error even with a lawyer involved and so, I erroneously had TWO mortgages that neither bank would fix. I couldn't sell the house. I had to hang my head in shame in front of my neighbors, and walk away from my home that I loved, and worked very hard to obtain - losing all equity and wrecking my credit. They just don't care a shred about us, or about morals. If you're going to play the game, you need to play by their rules - that is clear. This scheme is precisely playing by their rules. Bravo.
The banks coerced them into taking loans?!?! That's a new one! So you are saying banks dragged people in off the street and held a gun to their head and said "Buy this McMansion now, or we will torture your puppy"?
Last I checked, people go to banks when they want to BORROW money. If anything, it was REALTORS like yourself who coerced people into taking loans.
The banks coerced them into taking loans?!?! That's a new one! So you are saying banks dragged people in off the street and held a gun to their head and said "Buy this McMansion now, or we will torture your puppy"?
Last I checked, people go to banks when they want to BORROW money. If anything, it was REALTORS like yourself who coerced people into taking loans.
My friends did exactly what Kathy is suggesting in this website. Thank you Kathy for hosting this website and letting people know they have other options to take.
To all the moral folks who posted objections to this strategy, let me tell you that there is nothing illegal about this approach, my friend consulted an attorney before taking the plunge. This was simply a matter of practical economics. You can't take your so called "moral" principles and feed your family with it. The contract between the lender and the borrower gives the borrower the option to walk away anytime. There is nothing there that says you cannot walk away if such action relieves you from too high mrotgage payments
Irregardless of how the borrowers got into the situation they are in, legality is a question of what the contract states.
Before you say point fingers to anyone and say they are immoral, picture yourself in their sitiuation. The people who take these drastic actions suffer enough from ruined credit. I hope you don't find yourself in a similar situation.
Classic, its funny to see that realators keep stooping so low. ARE YOU KIDDING ME?.. We see right through you. Your income dried up and now you are grasping for new shady ways to get the morons who lied in the first place to lie again. ALL YOU CARE ABOUT IS TRANSAACTIONS. Dont pretend that you are not encouraging people again to do something that will ruin thier financial condition to benefit yourself. Much like the plastic surgeon who put deadly silicon inside of womens bodys for a fee. 2 years later the same doctor gets a larger fee to remove the silicon and put in saleen...JACKPOT! I was born at night but not last night Kathy. You are the core of the problem, not the solution.
I would like to see stats on how man people were actually deceived (loans not translated properly for hispanic, deceptive inspections, etc) and how many people KNEW what they were doing and signing but were just following the American Trend For Greed? Right now, we are a world faced with rampant Global warming, China is polluting the world with it's growth at alarming rates, forests are being cut down in the Amazon so we can create biofuel and maintain our current life styles rather than re-examine them all together.
How many of these people aren't faced with loosing a home but with loosing their home that they upgraded to top of the line kitchens, granite counters, plush bathrooms, stocked their garages with fancy cars, and mounted big screens on their walls? Who has the RIGHT to that kind of a home? How many people just played the market? I would say a huge percentage of the growth in Las Vegas was due to market players. I do not feel for them loosing their homes.
What about the individual who is doing well, has a retirement income but decides to "Play the HOuses" game and looses it all? Whose fault is that?
When is GREED and American's need to CONSUME going to be addressed as a KEY element to this housing market bubble and crash?
Are there THAT many stupid people out there that didn't understand what a variable rate is?! Did they really assume that their worth was SO fantastic that they would get salary raises threefold in time to cover their mortgages once they reset?
What is happening in America right now, the whole GREEN movement along with the housing crash is really all symptoms of a psychological shift in our culture. Americans will go out kicking, looking for someone to blame, even though real fraud took place, looking for someone to bail them out (other taxpayers who stayed OUT Of the Housing Game)...
So what... lie on a loan payment, again. It's no big deal. It's just more advice of the same. But sooner or later, it will all catch up to everyone. This advice is just one more piece of people not being accountable towards their choices and hoping someone else will pick up the tab. IT all doesn't matter as long as AMerica continues to think it can keep endlessly consuming and taking and taking.
Madam,
Congratulations! The housing bust now has a face: Yours!
Loan fraud is only the beginning of your issues. Best of luck, and PLEASE change "careers".
Kathy, maybe you are the one who should consult the attorney - are you dumb enough to not be concerned about the status of your own license given your selfishly bizzare post -- also the lenders will no doubt use your post as evidence in their future claims against you for intentional interference with contractual relations -- ENJOY YOUR NEW SALES STRATEGY!
Wow this is such a great post. Come on Kathy! Don't let the Haterz(tm) get you down. How about blogging more often about specific deals so people can understand more thoroughly how really helpful your process is?
Remember folks: itsallgood!
THANK YOU THANK YOU THANK YOU. This is very good information and I applaud you for standing up for what youm believe in. it takes a strong person to be hit with all these inaccurate ranters spouting off about fraud and immorality...give me a break. Keep up the good work. People like you give others hope.
Wow, Congrats on your blog Kathy. Now since your blog is about helping people, I'm willing to have you as my realtor. Can you take away your commission, so you can "really" help people?
So its not "illegal", but it certainly is "immoral" to encorage this kind of behavior. Yes, it's hard to feed your family on morality, but once morality goes, what kind of society to you pass on to your family?
These suggestions are at best fraud, and at worst criminal.
YOU SHOULD BE ANGRY WITH THE BANKS WHO INTENTIONALLY SOLD AND PACKAGED THESE BS LOANS THAT PEOPLE WERE NOT SUPPOSED TO HAVE. WHY BE UPSET WITH THE 1st TIME HOME OWNER WHO TRUSTED THEIR LENDER AS ONE TRUSTS THEIR DOCTOR AFTER ALL THEY ARE PROFESSIONALS WHO WOULD NOT LIE/MISLEAD ONE INTO TAKING A LOAN THEY COULD NOT AFFORD? NOT!!! THEY FRAUDULENTLY CUT THE BS LOANS UP RESOLD IN GREED AND MADE BILLIONS AND RUN TO THE FED WINDOW TO BORROW BILLIONS MORE TO DO IT ALL OVER AGAIN WITH OUR TAX DOLLARS AND YOU HAVE THE NERVE TO BE UPSET WITH THE LITTLE GUY WHO IS TRYING TO KEEP A ROOK OVER HIS/HER FAMILY'S HEAD. WHILE THE FEDS & BANKS SCREW THE ECONOMY AND THE DOLLAR??!! WAKE UP PEOPLE...
THE BANKS ARE THE ONE WITH NO MORALS. IT IS NOT THE JOB OF THE BORROWER TO UNDERWRITE AND FUND A LOAN!!! IT IS THE BORROWERS JOB TO TAKE OUT THE LOAN. IF BANKS WANT TO COMMIT FRAUD (YES THERE ARE SEVERAL LENDING INSTITUTIONS UNDER INVESTIGATION FOR THIS WIDESPREAD FRAUD)AND PEDDLE WORTHLESS LOANS WHY ARE YOU UPSET WITH AVERAGE JOE FOR PLAYING THE MONEY GAME JUST AS THE BANKS DO?
IS IT THAT YOU RATHER GET SCREWED BY RICH PEOPLE AND MULTI BILLION DOLLAR INSTITUTION BECAUSE "WE AS AMERICANS" ARE SO USE TO IT THAT WE RATHER NOT SEE A SIMPLE PERSON AS OURSELVES GETTING EVEN BY PLAYING THE SAME GAME? YOU HAVE TO PLAY THE BANKING GAME BY THEIR RULES = USE 'EVERY LOOPHOLE' TO YOU ADVANTAGE. I APPLAUD KATHY, EVERYONE WHO IS WALING A WAY, EVERYONE WHO BUYS ANOTHER HOME AND DEFAULTS ON THE 1st THIS IS THE RULES BANKS PLAY BY.
I don't understand why anyone claims this is illegal or immoral? Let's take a look:
Is it illegal? As long as the mortgage applicant does not misstate earnings, liabilities, or any other piece of data that is asked in the application, why would the above be illegal? Banks are perfectly capable of placing covenants into their loans to prevent this sort of thing (i.e, default on one loan, all others become due immediately). A bank would be STUPID to give a loan to someone who cant handle their existing obligations. However, if the buyer falsely claims they are going to sell the old house and use proceeds from that to fund the new house, then there is misrepresentation. My guess is, that will never happen because it will be apparent to all, including the bank, that they are upside down on the old mortgage.
Is it immoral? I fail to see here how the buyer misrepresents themselves at all? They are entering a loan on a new house to buy a new house. Nothing immoral about that. They also choose to go out of compliance with the covenant on an older loan and go into default. The contract has specific redress to handle that situation and BOTH PARTIES understood the possible scenarios and what would happen BEFORE entering into the loan. How is this immoral?
The only thing that I can make is that it's immoral to walk away from a debt and I find that puzzling, as both parties enter the contract understanding this risk, banks better than anyone (although, based on recent news, not good enough). If you find this immoral, would you also find bankruptcy immoral? Same concept - overspending and walking away from debt.
I dont think its anyone's fault, we're all big boys. Each party should be responsible enough to know what they are getting themselves into and what the risks are. People who say they are screwed by banks or realtors, they're just admitting that they were too stupid or made a mistake. Deal with it. If I gave you a red pill to swallow, wouldn't you do due diligence? Why not do due diligence on a several 100K loan and really understand it?
I'm thinking about letting my American citizenship go into foreclosure, but before I do I'm shopping around for a new one. I'm looking for a citizenship that does NOT make me a war-criminal nor a serf of Wall St. I'm thinking Canada or France, but hey ..I'll take Argentina if necessary. Although I'd rather not trade one Third World country for another if possible.
Wow! Interesting blog! But see http://en.wikipedia.org/wiki/Tortious_interference
Tortious interference with contract rights can occur where the tortfeasor convinces a party to breach the contract against the plaintiff.
I can pretty much assure you that the lenders are going to start filing for and collecting on deficiency judgments in the very near future.
You basically are setting people up to have their assets attached and their wages garnished just so you can sell them another house.
THIS IS DESPICABLE!
You are a great example of why everybody is hating on Realtors
these days.
I am a Real Estate Broker and hope that the NAR pulls your license.
REALTORS & BORROWERS DO NOT APPROVE LOANS. BANKS PAY PEOPLE (WHO OFTEN HAVE BUSINESS/FINANCIAL DEGREES) A SALARY PLUS COMMISSION TO KNOW WHO DOES/DOES NOT QUALIFY FOR A LOAN. THESE ARE THE SAME FINANCIAL INSTITUTIONS THAT FIRED PEOPLE FOR NOT PEDDLING THE FRAUDULENT BS LOANS THAT PEOPLE ARE BEING FORECLOSED ON. DON'T HATE THE PLAYER, DON'T HATE THE GAME HATE THE MAKERS OF THE RULES OF THE GAME ie BANKS of GREED!!! LET'S HOPE YOU NEVER HAVE TO BE IN ANYONES SHOES WHO GOT PLAYED BY BANKS AND HAVE TO MAKE THESE TYPES OF DECISIONS. DON'T HOLD YOUR BREATH THOUGH WITH THE DIRECTION THE ECONOMY IS GOING. THE ONLY ONES LAUGHING ALL THE WAY TO THE BANKS ARE THE BANKS.
I live in Central California and my husband works with a man who is doing just this. His sister-in-law is a realtor and is helping him purchase a home in the Bay area. He will then make his home here as an income property, forclose and move to the Bay.
Leave Kathy Neilsen alone! Leave her alone, I'm serious! Waaaahhhh!!!! aaahhhhhh!!
To all you morality mongers guess what... people are doing this all over the US. Cops firemen, nurses, trash truck drivers and so on. I mean this as no offense to you Kathy but people do you actually think she thought up this solution? NO its been going on all over the place and for years. Nothing in this blog would convince me to foreclose on my home. I'd do my research and make a decision based on facts from professionals such as lawyers and CPAs etc. But I tell you what after reading all the ignorant ranter comments I would certainly be very careful in who I called to help me find a house and Once i read this blog I'd definitely call Kathy. this decision is very hard and the last thing I would want is a bunch of ignorant finger pointers blaming me for something that was unavoidable. SHAME ON EVERYONE OF YOU WHO CONDEMNED KATHY. You are doiung a great job and I hope you keep it up.
Yeah banks are at fault..because they love having empty houses on their books and love paying the taxes for the empty house.
If you see ol' Johnny stealing does it make it right for you to steal.
It's your decision to get a loan. Is it Ford's fault that people drink and drive? No, because the person made the decision. Is it's the bar's fault people drink and drive? They fed them the alcohol, so it must be their fault. All this "it's the banks fault" is stupid. You know your finances. You know what you can and can't afford. If you go into foreclosure, it's your own fault.
How is pointing to other people's wrongdoing justification for doing something wrong?
It's all about #1 isn't it?
When someone has to rationalize an action they are doing something they shouldn't be doing.
Illegal? Maybe not (but then again, if there were lies in the loan documents it is). Ethical? Definitely not. And to the commentor's who have no problem with this type of activity, well... Let's just say I'm ashamed. And we wonder how corporations have no ethics. It starts with the individual.
Interesting. Why is it so many people feel they have the right to critize others? Who died and made you judge and jury. If someone wants to let their home go to foreclosure why is it anyones business but their own. They choose the action and therefore choose the consequences, its as simple as that. Whats even more interesting is the amount of time and energy these people are putting into others business when they could put the time to much better use. But then the Gladys Cravits crowd are always snooping and ready to offer an unwanted opinion every chance they get. Why don't you people get a life and leave others to theirs.
Anonymous @ 4:07 and all who are uniformed/ignorant to the ways of banking alike. These banks already made their money off the top when they approved the loans and repackaged and sold the loans no loss there. As far as paying taxes for a Repo Property banks actually pay a LESSER tax RATE than we individuals AND the bank gets to write it off darling no loss there either. If these same banks are stuck with the bogus loans they could not sell they can simply get Fannie Mae and Freddie Mac to take these loans at the expense of our TAX DOLLARS no loss there either. So please tell me why should the borrower lose again and again when the bank will always win. Have you not heard of Country Wide and Bear Stearns BAILOUT with our TAX DOLLARS.
Yes FORD would be liable for drunk driving if they INTENTIONALLY got drivers intoxicated and capitalized off of their DUI.
KNOWLEDGE IS POWER STAY INFORMED
1st time on this site, came by way of patrick.net. I can not believe the amount of negative feedback for "Who Knew?: Buying a New House....."
Regardless of what Kathy says, its going to happen, period. The REAL issue is why/if banks are still freely lending money to these people to purchase another home.
Sure, if the banks are still giving out 100% financing loans, then they are stupid to do so and people will take advantage of it. But if the banks go back to the days of fiscal responsibility and require a 20% down, then several great things happen.
1. Home owner's have money in the house and will loose real $$$ if they simply walk away from it.
2. Will prevent people with no true fiscal management, also known as savings, to purchase a house.
Most, people who are walking away from a home won't have the 20% down, thus preventing them from buying another home. Fix the system, fix the problem.
Here here to the previous commenter. If banks want to continue lending money to these people why shouldn't they buy another home. Don't rage on Kathy for playing the game. The banks are allowing this... THE BANKS... the very same who run to the government and ask for bailouts. If banks had another motive other than greed then there wouldn't be an issue.
This is a matter for civil courts, not criminal.
And people who choose to walk away still pay a hefty price.
Even in those jurisdictions that don't allow deficiency judgements on first mortgages (e.g. California), there will still be a foreclosure on the individual's credit report for the next 10 years.
That means very high borrowing rates (secured or not), and has a significant negative impact on future employment prospects as well (don't lose your current job!)
>>Why is it so many people feel they have the right to critize others? Who died and made you judge and jury.
The 1st Amendment!!!
>>Solution
Banks should force everyone to make a major down payment prevents these types of problems, otherwise the scum of the world will take advantage of them.
How does one qualify for another huge home loan when one already has one? Don't lenders CHECK these things beforehand, i.e., look at a credit report to check for outstanding debt? (Oh, sorry, that's what got us into this mess...) Am I missing something here?
Evidence of the moral decline of this nation. It's always someone else's fault. The "unscrupulous banks" are a useful villian, aren't they. It is not the fault of analytically challenged Realtors and the NAR, which told everyone that prices always go up, and that told assessors that they "needed" an assessment of $xxx,000 for a particular deal. And now those same realtors are doing everyone the "service" of telling people their options which include how to stiff a bank. This should be investigated by the legal authorities. In the mafia, they call this racketeering. This "advice" is morally reprehensible and in my opinion, criminal. Don't worry about the lenders - they will take their losses due to bad loans. In fact, many of them will go broke. And guess who will be on the hook? Taxpayers like you and me and Kathy Nielsen too. We will be the ones paying for this conduct through the FDIC, through taxpayer bailouts, and through higher mortgage rates. It is a tax that the intelligent and responsible people of this country will have to bear thanks to the irresponsible advice of people like Kathy Nielsen.
We are alredy paying for the bail out of the banks with out tax money and the banks are the ones who created this this mess. Please tell me why are people mad with average Joe for putting himself and his family 1st but people could care less about getting SCREWED by the banks and the Federal Reserve???? It's like people rather honor the institutions who rob their pockts... is this from our European days when we were all peasents to the kings & queens and there were only 2 classes rich/poor. Never fear it seems those days are coming back and you dan REALLY honor the ones who screw you then
As I read through the posts here first I'd like to say to Kathy WOW I'm really impressed you've allowed these negative comments to remain. Obviously you are very confident in your actions. I too see the logic and the reality of the situation. Banks have only one goal in mind PROFITS. Thats probably why they are giving these people loans a second time around. Like another commenter said, it's creating revenue for banks at a time when it is desperately needed and taking a foreclosed home off their hands...so why not allow them to buy another home. If everyone did this the market and banks would be in much better financial shape. With rising foreclosures and so many elimated from the market real estate could stagnate for years as the borrowers remain unable to buy.
I am one of those "buyers" who actually did his research of the loan they were offering me back in 2005. I declined the offer whilst sitting at the lawyers table during closing. I was a pain in the butt for sure...but now I am extremely happy I am renting...dodged that bullet!
Kathy, I respect your decision not to judge, that is the correct thing to do. But I still do not concieve how so many got into trouble and signed these papers without READING them or thinking they could base their current actions on future possibilities? Yes to some degree we must...but in this gambling situation these folks had the opportunity to reviews these loans and they chose to believe the people who told them one thing or another without seriously analyzing what were in the loans.
I did it...I cannot see why others did not except for one reason...greed made them very, very hasty. I wanted that house too...not enough to make me close my eyes.
Greed makes you miss/do/ignore a myriad of things.
Bankers are criminal. They create bubbles and burst them. They get rich giving out loans like candy to kids. This creates artificial price inflation. So we all end up paying more than our homes are worth. Now lenders decide to restrict giving out loans and then home prices plummet. Innocent home buyers are left holding the bag. Sometimes you have to fight fire with fire. Ethics??? Ha ha, that's only for the good little sheep who like to be used and abused by the greedy corps.
hello all i would just like to take a stand for "us" the few who can accomplish this act, as i am currently purchasing my dream home, i did read the paperwork 2 years ago and knew then what i was aggreeing upon, i could afford it and could still, but why sit on a money pit for the next 20 years waiting just to break even, when i could be all nestled up in my dream house? uh exactly, and call it what you want, the bank gets the house, its not like i stole anything, it was the agreement, the "bank" is not a person with feelings or worries, but i sure am, so i think its pretty damn smart, and just to piss yall off more, im even going to rent out my house while its in foreclosure to a friend who knows the situation, why not? it would sit there empty anways and its still mine for now, so all you haterz who would do the same thing but can't, whatever, and im only 22 years old and getting my dream house "what?!"
When there the loans are not available in the future for future generations (ie your kids) you can thank yourself. The USA has had easy access to borrowing money becuase as a society we pay it back. When a society goes amoral then the lending standards will be tightened. All of those that bought an overpriced home in the IE with the hopes the price would rise you gambled and lost. Suck it up and deal with it. If you were too stupid to believe your realtor and/or loan officer its your fault. Maybe Borack will save you since we are all victoms right ??
immoral is the banks being greedy and taking advantage of people. I make 50,000 a year. How can I not afford a house worth 191,000? There is no middle class! I'm recently divorced and paying 1,785.00 a month intrest only! Who would be immorral if I left my home? I've been here 5 years. Thats 90,000 in interest! The bank could get 180,000 easy for the house! Whos losing money?
I am a realtor and also got caught up in the fiasco. Yes, I think that borrowers, realtors, banks, mortgage brokers share responsibility. At the same time, I don't think that you can have a blanket statement about everyone. Everyone has a different story. My story is that I truly did not know that the housing market was going to colapse. I think that most people did not expect what is going on right now. I bought several investment properties because I wanted to better myself and help my family. What do you say about the people who invest thousands of dollars into the stock market? Are they to be scrutinized? Also, let us not forget about the builders that built hundreds of homes that are now upside down. Also, what do you think about the investors who are snatching up all of this discounted property through short sales? I think that lack of knowledge and experience is to blame for alot of this mess. I don't think most people are immoral...
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