Knock, Knock - Short Sale Fundamentals
 
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30
Sep

Knock, Knock

Can you hear anyone knocking at your door? If you do, it might be Freddie Mac asking about your mortgage. If you don’t, well, you must be in pretty good shape. Apparently, Freddie Mac has launched a proactive campaign to convince borrowers to modify the terms of their loans. Yep, they’re actually physically going door to door. They’re seeing who will participate in the government’s mortgage relief program.

Comment: Have you been contacted? Comment and share your experiences.

They’re hoping that meeting in people’s homes will help peopldoor-knockere overcome any difficulties they have regarding the process. And though they’re overwhelmed with the backlog of delinquent applications, they’re desperately trying to keep up.

STRATEGIC DEFAULTS

That’s the latest term being thrown around. Two reports came out yesterday explaining the logic behind intentionally defaulting on your mortgage. Last year 600,000 borrowers defaulted. But who are these people?

What researchers discovered is that borrowers with the highest credit ratings are twice as likely to default as are lower rated borrowers. Does that make any sense? The better your credit, the more likely to default??

Apparently these people decided that the damage to their credit score was better than sticking it out. Once their negative equity equals 50% of their home’s value, a large portion will walk out. However, the numbers are lower than they would be otherwise, due to feelings that a strategic default is immoral.

Comment: Tell me what you think. G ive me a piece of your mind. What would you do in this situation? Take the hit, or walk out? I want to know.

  • http://www.homeownersolutions.comcastbiz.net Mark

    I would purge the mortgage and owe the thieving banks nothing(95% success) or walk away.

  • http://myproperty56.com Jacob

    I have a home worth $250k, I owe $310k. At one point the house appraised at $350. I have a pretty good credit rating, 700ish.

    My perspective is this, what I owe on the house is not relevant to the value. Sure it sucks that I’m 60k upside down, but the bottom line is that I borrowed and spent that money AND I promised to pay it back. There is no way around those basic facts.

    While I appreciate that there is a bail out option if I NEED it, I do feel I should do all in my power to meet the terms of my obligation. I’m not sure if its a “moral issue” but it is for sure an integrity issue, I said I would do something, I should keep my word and do it.

  • Kathy

    Cory ya know it’s hard to say what I would do unless I have walked a mile in someone elses shoes. Fear is a dirty 4 letter word. Morally I would find it very difficult to walk away. Preserving my integrity is important to me in the long run. Also, I’m fairly new at this investing game and I wonder how all this (economy) stuff is going to wash out.

  • http://www.vicegi.net(underconstruction) Veronica

    Each situation is different, you have to consider the idea that many people do not have the possibilities to continue paying their mortgage, preserving integrity does not feed your children. There are many extreme situations where you have to choose to feed your family or pay your bills and that includes your mortgage, there is no easy financial aid for people who are self-employed, there is no unemployment available, being self-employed does not mean guarantee your income, how can you decide if it is morally right to walk away, lose your home or put food on the table?



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