Tuesday, February 26, 2008

You Walk Away?

I have heard a couple of news stories about a web site called YouWalkAway.com.

The aim of the website and the subject matter do not make me feel warm and fuzzy. The subject is walking away from your mortgage and minimizing the damage.

After listening on MPR I had to visit the site. I feel anyone who walks away from an obligation or anyone who encourgages others to do so had better check their moral compass.

I went to the web site and it was not quite as sleasy as I expected. You see the thing is what the web site seems to be offering is information on legal rights of those being foreclosed.

Before the whole foreclosure situation was recoginized by anyone I had a single guy come to me asking for help selling his house. He had lost his job and could not make payments or get a loan.
He said the mortgage company was making harrassing calls and played one on his answering machine for me. He had equity in his house, but no way to access it. We knew there was a six month redemption period and thought it was reasonable we could get the home sold in that time.

He borrowed a little money from a relative and did some minor fixup to the house and we put it on the market. He was offered a job out of town, which for survival, he had to accept. He turned off the utilities in the house and notified the mortgage company he was working on getting the property sold even though he was just living in it on weekends.

The mortage company immediatly filed for an acceleration of the redemption period because of "abandonment" which they proved by showing the utilities had been shut off.

They changed the locks, listed the property and sold it, taking the owners equity.

This is a case where the mortgage company knew the law and their rights and exercised them fully, Maybe even a little more than fully. No one from the mortgage company expressed remorse or bad feeling about what they did.

If this is the attitude taken by the mortgage company, should it be any great suprise that individuals would want to use the law to do the best they can? The Lending industry has set the tone.

I do not think it is right to "just walk away" from an obligation. On the other hand it doesn't surprise me even a little bit that people who are facing foreclosure might take steps to minimize the financial damage.

1 comment:

Anonymous said...

It's a simple business decision; just like the lender decides upon.
It's done everyday, and when the sun rises a month later, the lender could care less. Many times they receive a guarantee payment from Freddie, Ginnie, or FDIC. They don't loose a dime.