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Will walking away turn into an epidemic?
- Thread starter cgtrader
- Start date
Quote from Jayford:
"... Yep, Cal is a non recourse state. That does not mean all loans are non recourse however. Depends on the loan.
I can understand a mortgage being non-recourse if there were 30-50% down (as is common with commercial RE).
But with no money down (or even only 5%) and no recourse in default, what in the world would induce a lender to make such a loan? Sounds crazy.
Perhaps you can shed some light?
Greed ... that's what fueld the whole debacle.Quote from gnome:
I can understand a mortgage being non-recourse if there were 30-50% down (as is common with commercial RE).
But with no money down (or even only 5%) and no recourse in default, what in the world would induce a lender to make such a loan? Sounds crazy.
Perhaps you can shed some light?
I can establish the age of a person by what they write about this issue....
"the internet will bring us all together"....."banks can't process all the problems"......LOL.....
Guess what, Bubba, they can and they will....
They will sell that loan for cents on the dollar......
Example: $400,000 loan forclosed on...house sells for $300,000..bank has a deficiency judgement for $100,000....sell that judgement to a debt collector for $10,000-$25,000....he will pound your ass......and this is not the sweet little lady from the bank, LOL.....this is Vinnie from WalkAway Recovery Inc., LOL
From a practical matter they do have a limit if there is simple nothing to be had....but THEY will determine that fact, not you..
Now before your guys start....I have done this in Houston in the late 80's.....you could buy loan packages from RTC at a bid or an auction process.....you just got a cardboard box with a bunch of files, LOL.....pretty basic.....
Big money, I mean institutional type (college endowments etc) were involved....big packages sold....
But, gee, 1 out of 500 just seems pretty small pickings....
SteveD
"the internet will bring us all together"....."banks can't process all the problems"......LOL.....
Guess what, Bubba, they can and they will....
They will sell that loan for cents on the dollar......
Example: $400,000 loan forclosed on...house sells for $300,000..bank has a deficiency judgement for $100,000....sell that judgement to a debt collector for $10,000-$25,000....he will pound your ass......and this is not the sweet little lady from the bank, LOL.....this is Vinnie from WalkAway Recovery Inc., LOL
From a practical matter they do have a limit if there is simple nothing to be had....but THEY will determine that fact, not you..
Now before your guys start....I have done this in Houston in the late 80's.....you could buy loan packages from RTC at a bid or an auction process.....you just got a cardboard box with a bunch of files, LOL.....pretty basic.....
Big money, I mean institutional type (college endowments etc) were involved....big packages sold....
But, gee, 1 out of 500 just seems pretty small pickings....
SteveD
<i>"Example: $400,000 loan forclosed on...house sells for $300,000..bank has a deficiency judgement for $100,000....sell that judgement to a debt collector for $10,000-$25,000....he will pound your ass......and this is not the sweet little lady from the bank, LOL.....this is Vinnie from WalkAway Recovery Inc., LOL"</i>
The major (only) employer in my town is Widmer Winery. Ever wonder where all that Wild Irish Rose and Cream Sherry comes from?
In any event, they laid off about 40% of the workforce today. One of the guys had been there 36 years, some 20ish years. Not a happy bunch of people, overall.
A couple of the uneployed workers will probably lose their houses, they live paycheck to almost paycheck like many blue-collar workers. If Vinny from WalkAway Recovery was ever stupid enough to personally visit the wrong one(s) of these type people, Vinny's family would never see him again. Ever.
*
Some percentage of walk-away homeowners simply cannot pay the debt, there is no money to recover, not even the IRS can squeeze green from a clump of dirt.
Regardless of the potential consequence, the banks will be stuck with a glut of inventory to sag their books even heavier. Housing market hasn't even almost hit a meaningful bottom. Overall, there is still a long way lower to go.
The major (only) employer in my town is Widmer Winery. Ever wonder where all that Wild Irish Rose and Cream Sherry comes from?
In any event, they laid off about 40% of the workforce today. One of the guys had been there 36 years, some 20ish years. Not a happy bunch of people, overall.
A couple of the uneployed workers will probably lose their houses, they live paycheck to almost paycheck like many blue-collar workers. If Vinny from WalkAway Recovery was ever stupid enough to personally visit the wrong one(s) of these type people, Vinny's family would never see him again. Ever.
*
Some percentage of walk-away homeowners simply cannot pay the debt, there is no money to recover, not even the IRS can squeeze green from a clump of dirt.
Regardless of the potential consequence, the banks will be stuck with a glut of inventory to sag their books even heavier. Housing market hasn't even almost hit a meaningful bottom. Overall, there is still a long way lower to go.
You are one of the young ones.....
The collectors will visit your town....don't be silly....
Interfering with a bank gets you to the FBI and then you got real problems....
They will take your boat, car, truck and dog..
But, listen guys, they are not after the truly stretched....they are after the guy who just didn't WANT to pay because the value went below the loan balance.....not the guys who CAN'T pay...
PS: I would think anyone working over 20 years would have house almost paid off.....low loan...big equity...
SteveD
The collectors will visit your town....don't be silly....
Interfering with a bank gets you to the FBI and then you got real problems....
They will take your boat, car, truck and dog..
But, listen guys, they are not after the truly stretched....they are after the guy who just didn't WANT to pay because the value went below the loan balance.....not the guys who CAN'T pay...
PS: I would think anyone working over 20 years would have house almost paid off.....low loan...big equity...
SteveD
next january maybe banks can give away houses instead of a cash bonus
The Brit's view of how the subprime disaster happened. It's hilarious (and near the truth).
http://www.brasschecktv.com/page/187.html
ETU
http://www.brasschecktv.com/page/187.html
ETU