03 December, 2009

The Solution to Your Mortgage Woes: Walk Away

Yup.  That's right.

Sounds insane, but if the Treasury's latest bit of pressure on the banks doesn't work, and they won't modify your mortgage, you might want to consider just telling them to fuck off.

I've been saying this all along to people: The only real obstacles are in your head. There's no reason in the world to keep throwing good money after bad.

And he's right. Banks won't negotiate with borrowers until more people start to do this:
Go ahead. Break the chains. Stop paying on your mortgage if you owe more than the house is worth. And most important: Don't feel guilty about it. Don't think you're doing something morally wrong.

That's the incendiary core message of a new academic paper by Brent T. White, a University of Arizona law school professor, titled "Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis."

White argues that far more of the estimated 15 million American homeowners who are underwater on their mortgages should stiff their lenders and take a hike.

Doing so, he suggests, could save some of them hundreds of thousands of dollars that they "have no reasonable prospect of recouping" in the years ahead. Plus the penalties are nowhere near as painful or long-lasting as they might assume.
Read up on the pros and cons, get some expert advice, and then make the decision that's in your best interests.  You don't owe the fuckers who fucked our economy over a damned thing.  They brought us to our knees: perhaps it's time to return the favor.

But it's really not about right or wrong, moral high ground or low, but leverage.  We need some.  And we'd have it, if only we'd use it.

Just do it wisely.  Make sure you've got legal experts who can help you use the system to your advantage.  And then extract all the advantage you possibly can.  The taste of their own medicine may be bitter for the banks, but that's just too fucking bad, now, isn't it?

1 comment:

Chris Rhetts said...

Dana, I'm sorry but this is the first time I have really disagreed with any of your postings. The first reason for this is fairly evident. When you sign a contract, unless you have been coerced or lied to, it is fundamentally a matter of honor that you live up to that commitment. The second reason has a little more to do with politics. Conservatives today are trying repeatedly to perpetuate the lie that banks were forced by government (google "The Community Reinvestment Act") to make risky loans to people with marginal credit. This is bullshit. The mortgage bubble had nothing to do with government policy and everything to do with ordinary citizens like you and me just trying to cash in on the perception that real estate values would always go up and never go down. Were banks complicit in this fiasco? You bet. But ultimately it was we ourselves, individual citizens, who freely chose to buy more home at a greater long term risk than we should have. "Sticking it to the banks", by walking away from an honorable commitment strikes me as an exceptionally self indulgent way of avoiding personal responsibility.