"Walking away" from a house??

DrBoost wrote: Has anyone here done that or know somebody that has? Here in Michigan it seems just up and leaving a nice house because there's no work (in this state, thanks Jenny) is about as common as bouncing a check for some folks. Anyway, I can't find a freaking job in this god-forsakes state and have a strong prospect in Denver. The problem is I just bought this house less than 3 years ago and despite the improvements I've made it's worth less now than it was then so selling it ain't gonna happen. Should I just let the house go? Sure I'll try to sell it but there are an incredible number of houses for sale in my area. Renting prob wont work either. Anyone who can afford rent can afford to buy a house in this market. Assuming the house doesn't sell and I can't rent it what are my options?

People who borrowed over their head do not have my sympathy. I feel really bad that you bought a house but now you don't want to pay for it. Just imagine if people like you were the majority. Where would we be then?

Oh, and on a similar note: a few years ago I bought a brand new Chevy van for work. The problem was that after a year, work dried up and I owed more than the van was worth. What should I have done? You know the answer right Doctor?

speedblind wrote: I'm in a very similar situation - I bought a house in AZ in a new neighborhood a couple years back and recently got a job offer to move across country. The house is in a neighborhood full of foreclosures, either by people that got greedy and bought too much and now can't pay or people that just don't feel like paying, take the easy way out and mail the keys in. I made sure not to accept anything less than what I would need to keep the house in AZ and afford rent on a decent place in my new town. It worked, and now I know I'm safe if the house doesn't sell. If it does, then I'm better off than I'd planned. As for the credit repercussions of walking away, you should really get a real estate lawyer and explore this options. I believe that even a short sale can negatively affect your credit, though that could be a state-to-state thing. Either way, research before you do anything. And, not to get on a high horse, but IMO people mailing keys in/leaving their house is what's gotten us into so much trouble. All of these mortgages are being treated as liabilities because nobody knows who's going to pay their mortgage or not. And it's not simple math of who can afford to or not...now we have people that can make their payment deciding that they don't feel like honoring the agreement they made. That introduces uncertainty and that's what contributes to plummeting stock values (Bear/Stearns, et al) that leads to major institutions that invested heavily in these mortgages having so much trouble. Walking out on a mortgage you can afford, to me, is a question of honor and integrity, not of budget and finances. Believe me, I've thought long and hard about walking away from my house: nobody lives there, it's a constant source of stress, and it will be a LONG time before I can break even. Regardless of the stress and financial strain, though, I signed the mortgage and I agreed to the terms. It sucks, I wish I didn't have to worry about it, but it's my burden to carry. I hope this doesn't come across as altruistic. It's my opinion, though, that we would be in a much more stable economic situation if everybody that could honor their obligations did.

speedblind nailed it. +100

I can relate to your discomfort in this situation, and hear you saying you want to do the right thing. Consider that the vast majority of the people who have foreclosed and walked away from their houses are good people just like you, trying to do the best they can for their family. If the majority of people in this situation thought like speedblind, our economy would do just fine. When large numbers of people walk away and choose to not honor their commitments, we all get screwed.

Good luck.

ManofFewWords wrote:

DrBoost wrote: Has anyone here done that or know somebody that has? Here in Michigan it seems just up and leaving a nice house because there's no work (in this state, thanks Jenny) is about as common as bouncing a check for some folks. Anyway, I can't find a freaking job in this god-forsakes state and have a strong prospect in Denver. The problem is I just bought this house less than 3 years ago and despite the improvements I've made it's worth less now than it was then so selling it ain't gonna happen. Should I just let the house go? Sure I'll try to sell it but there are an incredible number of houses for sale in my area. Renting prob wont work either. Anyone who can afford rent can afford to buy a house in this market. Assuming the house doesn't sell and I can't rent it what are my options?

People who borrowed over their head do not have my sympathy. I feel really bad that you bought a house but now you don't want to pay for it. Just imagine if people like you were the majority. Where would we be then?

I what point did I say I want to or plan to walk away from my commitment?? I didn't borrow over my head E36 M3 head! I paid a fair price for a house less than 3 years ago. Now the house is worth less than I owe because the economy here tanked. My question is, and always has been what are my options of I have no choice but to leave the state. If you actually read my posts you would understand that I did my research and for that reason DIDN'T get an ARM and DIDN'T borrow over my head. In fact we left head-room because we are intelligent folk who know unforeseen occurrences befall us all. You should try to work on your reading comprehension, it seems to be lacking.

ManofFewWords wrote: Oh, and on a similar note: a few years ago I bought a brand new Chevy van for work. The problem was that after a year, work dried up and I owed more than the van was worth. What should I have done? You know the answer right Doctor?

I would suggest you do the same thing I'm doing. Investigate all of your options and find the best way to pay for that van right now while times are tough AND to find more work so you can continue to pay for the van in the future. The big differences here ManofFewintellegantWords are, you expect your van to be worth less in 3 years and if you found a way to get work 1,000 miles away you can drive said van to Denver.

Saw an article in the NYT about this a bit ago. Some lady in LA bought a condo for $900k. It depreciated to $400k or so. Maybe I have the numbers wrong but anyway, the gist of the story was even though she could afford the payments at $900k or a million whatever it was; The house was now worth half a million less than she paid for it. So she, with a good job walked away, because it would have screwed her retirement and quality of life forever.

thought provoking...

WOW! Some of you have really been down right rude! Didn't you even read the OP's posts? He said he does not want to walk away from his obligations. I too live in MI and know exactly what he is saying. The economy here is horrible, the worst in the whole country! He lost is job and cant find a new one. Here in MI we've got serious employment problems. Everyone has been effected by unemployment in this area. I can't even tell you how many people I know personlly that have lost their jobs and are unable to find work. Maybe the country is in a recession, but MI is headed if not already in a depression.

I really feel for the guy. Sounds like maybe some of you are CLUELESS to what is going on outside of your own worlds.

Dr.Boost-Take care, it will work out and I am sure you just looking for some good info. I hope you find it.

There have been some "walk aways" in my area, and its a solid middle class oeven upper middle class area, at least where the walk aways happenned. One of them has an in ground pool, which became a mosquito farm this summer. Made the news and everything.

Some of you guys are being a little hard on the OP and using the issue to sound off on personal values rather than address the question, and doing so in a hateful way which isn't too cool. The mortgage "crisis" is not the fault of the greedy consumer, BTW. Its more complicated than that. And its not because of ARMS, either. I have two of them, have barely moved in 10 years (interest wise), and will likely go DOWN for the second time here shortly. The are legit ARMS, and then there are the kind of ARMS the industry pushed on people looking at buying, when those people not only weren't qualified financially to buy a house, but intellectually either. Its not the responsibility of the lending industry to educate its consumer base, but loans can be predatory, too.

Pretty frightening that the actions of a small army of mortgage brokers with associates degrees in communications and some bartending experience can have such an impact on the nation's economy. I guess I'm being hateful now, but you can see where I rest some of the blame for the "mortgage crisis", which is really a "mortgage industry crisis" IMO.

It reminds me of the Bush administration. Keep the smart people out of the loop and let the kids fly the plane.

To all the haters:

Actually I live in my own house on the Menomenee River Parkway in Wauwatosa, WI. Paid for in full. Its a very nice house.

Some times it pays to be in the right place at the right time.

I got a supplier in Wauwautosa, I've actually been there.

It's just 2 miles from home and right up my alley. Why did I hesitate? Because if I'm working 50 hours a week (not making enough to pay the bills), when do I scour the 'net looking for jobs that will pay the bills? When will I interview, I don't want to jeapordize that new job by asking for an afternoon off right after I start? BTW, I did apply for that job this afternoon, and was turned down flat, "over-qualified."

Boost-

TAKE THE JOB!!! To answer your first question, any one of the 118 hours left in the week. Don't worry about the new employer's feelings. It's dog-eat-dog, and you've only got to worry about taking care of yourself and your family right now (I know I'm not telling you anything you don't already know.) Most people (i.e. another job that you're applying for) will be more than willing to work around your current work schedule to schedule an interview w/you.

Please understand that I say all of this out of empathy, though I can't imagine how stressful it must be with kids. I was out of works for 2 weeks when I moved to Atlanta, and I thought I was going to lose my mind. I got really depressed. I finally found a job at a frame shop making $7/hr, a year later found another job at a better frame shop that paid $10/hr. A couple of years later got promoted to production manager @ $19/hr., then a year or two after that, my wife and I bought our own shop....now making much closer to $7/hr again.

I sincerely wish you the best of luck, man. Go out and get SOMETHING, even if it doesn't pay ALL the bills. Creditors, Banks, etc., will be much more wiling to cut you some slack if you've got gainful employment. I've seen my friends get laid off, get depressed, stop working, and start living off of their savings/retirement plans/selling off all of their stuff. It's really scary to watch. Don't be like them. Hang in there, man.

93gsxturbo wrote: To all the haters: Actually I live in my own house on the Menomenee River Parkway in Wauwatosa, WI. Paid for in full. Its a very nice house. Some times it pays to be in the right place at the right time.

Doesnt change the fact that you are, or at least acted like, an azz.

Seeing you are relatively new here maybe you hadn't noticed that this place is not like other internet forums. This is a community where we all do our best to be respectful of one another. We take the time to read and fully understand what someone is saying before we fly off the handle on a little tirade.

If you read all the posts here you will see many examples where other more level headed posters gave the OP some tough love advice and he in turn respectfully considered that advice and furthered the discussion to gain more information and insight. Your post (and the other hateful one above by another newb) added no value to the conversation and only served to harm your reputation in this rather close knit community.

You have a house, its paid for, good for you. Be thankful you haven't found yourself in a situation like the OP, it could happen. Although everyone is up in arms these days because there certianly have been bad loans and bad borrowers, there are also good responsible people effected by circumstance beyond their control. Dr Boost is one of those people and has come here seeking constructive advice, not the rantings of a pompus lunatic.

There is a saying that you will attract more flies with honey than you will with vinegar. When it comes to persuading to change their mind or their actions, harsh words and quick judgments push people away. So if your objective is persuade people, a little empathy goes a long way. If you are being unkind just vent your own anger, don't be surprised (and more angry) when no seems to be listening.

Boost, I know what much of what you are going through. I grew up in Michigan and lived through hard recessions in the early 70's and the early 80's. The economy was then and sounds like it still is a one trick pony. When people stopped buying high margin domestic cars, the state goes into a tailspin. Until you have lived with 11% or more unemployment, you won't understand how hard is can be. My dad took jobs in North Carolina and Florida to keep his business afloat and keep us fed. It was not easy. I respect him for what he did.

About 5 years ago, I was living in a nice house my wife and I had bought recently. We both got laid off within a few a weeks of each other in the aftermath of the dot com melt down. We figured out how to make it work until we had income again. It was scary. I completely understand the impulse to walk away. You seem to have your head screwed pretty straight and I have faith that you can find your way through this with your credit rating, your dignity and self respect intact.

Datsun1500 wrote: Can the house be rented at all? Even if it rents for less than your payments it could be a good move.

I'm not so sure on that. There's a certain degree of liability in being a landlord. If you're possibly facing foreclosure already, why involve another family in the process?

No matter which way you go, even a short sale, you're going to owe the bank the difference between his loan amount and the selling price (or auction price, if you go that route) of the house. Unless you can continue paying the full mortgage amount until it's all paid off, your credit will take a hit as well.

You know what sucks? Moving to a new place and having an awesome job, but still owing $$$ on a house that you got berkeleyed on...but it's better than living in Detroit. Trust me.

Thanks all (well, almost all) for your responses and information. My plan at this point is to sell off my cars to keep money coming in for a little while and take SOME job. That will afford me the time and slightly reduced stress so I can investigate and discuss this Denver job and see if it pans out. If moving to Denver is what I need to do, I'll rent this house out and head west. I hate to move out of state even though I'd LOVE to live in Denver because I would like my kids to grow up with grandmas and grandpas.

I understand the country is in a recession but a few posters hit the nail on the head. Michigan in a whole different ball of wax. Everything here is based on the auto industry, that's what brought my grandparents here in the first place and that's what supported my and my 4 brothers and sisters. When the car industry tanks like it is, everything from the shopping malls to the airports feel it. Unlike some less savvy of us know, there are no jobs you can just go get to make a few bucks an hour. A laborer job (like roofing, landscaping or brick laying) doesn't pay $15/hr. More like $7 and that's if you can get that job over the 50 other guys who are all younger and more fit than you (maybe I'll sue Hostess Snacks, who knew Twinkies would make me fat??) I did try for that job poopshovel mentioned. It was a service writer position at a dealer ship. I have years of dealership experience as a tech and still hold my certifications. I have quite a bit of customer service experience too. I figured that was a snap. NOT. Didn't get it. That was a rude awakening. Here's a job I thought was just there for the taking if/when I wanted it. Denied!!

Anyway, thanks again for your information and encouragement. One of the original reasons for this post (though not stated very clear) was questioning if "walking away" from a house was exactly what I thought it was, simply reneging on a loan and pretending it never happened. I guess that's exactly what it is. Wow.

mattmacklind wrote: The are legit ARMS, and then there are the kind of ARMS the industry pushed on people looking at buying, when those people not only weren't qualified financially to buy a house, but intellectually either. Its not the responsibility of the lending industry to educate its consumer base, but loans can be predatory, too. Pretty frightening that the actions of a small army of mortgage brokers with associates degrees in communications and some bartending experience can have such an impact on the nation's economy. I guess I'm being hateful now, but you can see where I rest some of the blame for the "mortgage crisis", which is really a "mortgage industry crisis" IMO.

No lender ever PUSHED any type of loan on anyone. By the time they get to us their minds are already made up. These teaser rated ARMS were offered to the public and the people on the edge swarmed to them because all the financial analysts worked their numbers to show them how good a deal it was and how it could never really bite you in the real world.

I can't tell you the number of people I had to talk down from the ledge because Ed Jones or some other number cruncher had convinced them it was a good deal. There were books, seminars and all kinds of newsletters telling them about "The little known mortgage secret they don't want you to know!"

Those ARMS are the equivalent to many of the creative car leases out there now. And the customers are saying "But I want that big Caddy/Merc/Audi/Corvette/etc" so the dealers say "step right up".

93gsxturbo wrote: ...worthless people like the OP...

Mr. 93gsx, Would you be willing to put your name behind that statement or do you wish to hide behind your screen name?

JThw8 did the very right thing by correcting you and I could not agree more.

To the good Dr., Keep up the fight man, it aint easy, but keep up the fight.

Respectfuly, John R. Welsh

93gsxturbo wrote: To all the haters: Actually I live in my own house on the Menomenee River Parkway in Wauwatosa, WI. Paid for in full. Its a very nice house. Some times it pays to be in the right place at the right time.

A good way to avoid having to deal with "haters" is to not be one yourself.

My first name is Arnie, I have been a GRM subscriber since 1999, I have been a member of the GRM message board since they had the old, old board (1999 or so). I dont know why my account says I am new but then again I dont use my post count to measure my E-Dick.

I have a white color job at a foundry, and before that I was a tech writer. Everything I have is bought and paid for (I have one CC I use for gas that gets paid off every month), and I did it all on a small salary by squeezing every penny and doing as much work as I could myself. I have never been one to keep up with the Jones's.

Yes I have had help from family and friends to get them to where I am today, and for that I am very grateful.

Nothing pisses me off worse than irresponsible, entitlement minded people that pawn their problems off on the hard working tax base, and piss and moan about their problems but do very little for a solution.

I cant believe you cant find a job in the $15/hr range. Thats what delivery truck drivers make.

This thread could use a lot more courtesy.

foundry in Wauwatosa?

wait a minute.. you don't do high moly sil. and turbo parts do you?

or do you work for the stainless steel plant?

93gsxturbo wrote: My first name is Arnie, I have been a GRM subscriber since 1999, I have been a member of the GRM message board since they had the old, old board (1999 or so). I dont know why my account says I am new but then again I dont use my post count to measure my E-Dick.

Then all the more reason to say shame on you. If you've been around as long as you say then you should know better.

This is not your typical internet forum when flaming is acceptible and standard. Treat people with respect.

And noone cares about your e-dick, wether you have one, or are one.

93gsxturbo wrote: My first name is Arnie, I have been a GRM subscriber since 1999, I have been a member of the GRM message board since they had the old, old board (1999 or so). I dont know why my account says I am new but then again I dont use my post count to measure my E-Dick. I have a white color job at a foundry, and before that I was a tech writer. Everything I have is bought and paid for (I have one CC I use for gas that gets paid off every month), and I did it all on a small salary by squeezing every penny and doing as much work as I could myself. I have never been one to keep up with the Jones's. Yes I have had help from family and friends to get them to where I am today, and for that I am very grateful. Nothing pisses me off worse than irresponsible, entitlement minded people that pawn their problems off on the hard working tax base, and piss and moan about their problems but do very little for a solution. I cant believe you cant find a job in the $15/hr range. Thats what delivery truck drivers make.

I too have been a subscriber since about 99 and on this board for that time too. That doesn't give me the right to be rude to others though as you feel it does. I also don't feel the need to brag about what I have despite the fact that everything I have, I have worked for and have had no hand-outs like yourself. In fact, I have spend great amounts of time and a not insignificant amounts of money helping my mom and disabled father out in life when they needed it. In fact I too was a tech writer and have had many technical jobs and am 100% self taught.
Like you I get irritated when people have that attitude "I need help because I didn't know I had to pay that credit card back!?!?" mentality either but unlike yourself, I understand that hard times happen to good people and don't judge others without even reading what they actually said. You sit on your high throne and judge me because I should just go get a $15/hour job. Yeah, I should. But did you not read that there aren't enough jobs out there to go around. When I apply for a job for a laborer don't you think they know darn well that I'm outta there as soon as something else comes along? Yeah, that's why it's tough to get work here.

Nothing pisses me off more than some insolent prick making immature jabs at others while they know nothing about that situation (you have proved that twice now) or the person you are berating. To call me worthless and make personal attacks shows what kind of person you are. There were plenty of folks here that may have thought I was wanting to walk away from my house like you were but they kept it respectful and showed some maturity and respect. Obviously you didn't read the OP so here's the Cliff's Notes: Michigan has a terrible economy, worse than the rest of the country. I have heard of many, and even know a few folks that told me they had to "walk away" from their house. I didn't understand exactly what that meant. I asked for clarification from folks here and also for other ideas. My situation is that I lost my job almost 4 weeks ago. I have spent on average 30 hours a week looking for work and have as of yet not found any. Unlike other privileged folks I can't turn to mommy and daddy to help out. I see that if I don't find work soon things will get pretty tight and my biggest payment is my mortgage. Just to clarify for those that can't read very well, I DID NOT over-extend myself when I got this house. My house is worth less than I owe (A situation that almost 50% of Michigan residents are in and therefor, I can't refinance. Still with me? Good. I have a possible job out in Denver but would be unable to sell my house. There is my dilemma. What to do? Other thoughtful people have given me much good information and even well-wishes. Imagine that!! Someone finds out that a fellow human is in dire straits and has nice things to say. Isn't that what mommy and daddy taught you or did they just give you money so you'd go away??

Edited to show some of the maturity this board is known for. Sorry I stooped.

I dont work in Wauwatosa. I live in my (paid for) mansion in Wauwatosa. That I paid for myself, without financial help from the 'rents (who one is a public school teacher and the other is a volunteer at "Old World Wisconsin" so its not like they are raking in the cash either).

Now Dr, its not like the mitten is just gonna go away, so you might as well stick in it for the long haul.

I always thought Wisconsin looked a bit more like a hand, Michigan kinda looks like a lump with a lil tumor hanging off the side of my great state!

93gsx, you were extremely rude in your original post.

Dr Boost, don't play the game.

Ease up unless you both want to be part of Margie's patio. As she has said in the past, just walk away.