Can't Pay Your Mortgage? Trash Your House And Leave

"Vacant homes attract vandals and depress property values," explained Douglas Robinson, spokesman for NeighborWorks America , a nonprofit created by Congress to offer financial and technical support and training for community-based revitalization. "This negatively affects existing owners and reduces local property tax revenues. But very few homeowners walk away, although those who do believe that is their best option. Of course, trying to get a loan modification so that the payments are affordable is their best option." As if it were that easy. Especially for those homeowners, including those with good and bad credit, who have seen the light at the end of our current economic crisis only to decide there isn't a house in it. In fact, one could almost see the Wall Street Journal frown with disapproval upon reading the title of their December 2007 piece, "Now Even Borrowers With Good Credit Pose Risks." But the title no doubt was influenced by the comments of Bank of America CEO Kenneth Lewis in the piece itself. It seems that Lewis, whose company recently bought the housing meltdown's poster boy for bad lending, Countrywide, for $4 billion in stock, nevertheless feels confounded that customers of questionable loans would simply choose to abandon ship, er, house. "There's been a change in social attitudes toward default," Mr. Lewis told the Journal. "We're seeing people who are current on their credit cards but are defaulting on their mortgages. I'm astonished that people would walk away from their homes." While Lewis may scratch his head in disbelief, employees of the bank Wachovia have an explanation that might work for him: Homeowners have crunched the numbers and decided their houses are worth less than their mortgages. According to a recent conference call, many of Wachovia's current losses in California are originating not from subprime buyers fallen on financial hardship, but from homeowners who can pay their cleverly structured loans but are just choosing a different fate. "They've been from people that have otherwise had the capacity to pay," a Wachovia spokesperson said on the call, "but have basically just decided not to because they feel like they've lost equity, value in their properties. It's hard to know right now, but we may have seen somewhat of an acceleration problemas people have reached that conclusion." ... http://rense.com/general80/cant.htm

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