March 17, 2010 |
Wynn Bloch has always dutifully paid her bills and socked away money for retirement. But in December she defaulted on the mortgage on her Palm Desert home, even though she could afford the payments. Bloch paid $385,000 for the two-bedroom in 2006, when prices were still surging. Comparable homes are now selling in the low-$200,000s. At 66, the retired psychologist doubted she'd see her investment rebound in her lifetime. Plus, she said she was duped into an expensive loan. The way she sees it, big banks that helped fuel the mess all got bailouts while small fry like her are left holding the bag. No more.
June 14, 2010
The collapse of the housing market has pushed more than 11 million homeowners into the uncomfortable position of owing more to their lender than their house is worth. A third of the mortgages held in California fall into this category, according to housing market analyst CoreLogic. Many of these borrowers are voluntarily defaulting on loans even though they could still afford their payments, calculating that their homes will never regain their value. During debate last week on a bill (HR 5072)
November 22, 2009 |
That some underwater owners -- whose houses are worth less than what they owe -- are walking away from their homes even though they can still afford to make their mortgage payments has been well reported, if not well documented. But just how prevalent are these "strategic defaults"? And what are the social and moral ramifications of jumping ship? The answer to that first question is difficult to measure, if only because people who do make a conscious decision to ditch their mortgages, although they can still pay them, have every reason to disguise themselves as people who can no longer afford their loans.
September 27, 2009
Re: " 'Strategic' defaults on loans increase," Sept. 20: It is very saddening to hear that people who intentionally abandon their mortgages have an almost perfect credit score when it comes to applying for a loan or another mortgage. It just shows how unjust the credit system really is. Most people in the U.S. are often denied a loan or mortgage due to simple things like a DVD that was returned late or a $50 cellphone bill that was overlooked. Yet people who choose to cheat the system are allowed to borrow more money.
March 28, 2013 |
In a push to simplify mortgage modifications, federal regulators announced a streamlined process that doesn't require borrowers to prove a hardship. "This new option gives delinquent borrowers another path to avoid foreclosure," Edward J. DeMarco, acting director of the Federal Housing Finance Agency, said in a statement announcing the modifications Wednesday. The new modifications, however, would not include reducing the loan balance, a move promoted by housing advocates and others but resisted by DeMarco, who says it would end up costing taxpayers money and would encourage defaults.
March 27, 2013 |
In a push to simplify loan modifications, many borrowers who become 90 days or more past due on mortgages backed by Freddie Mac and Fannie Mae will be offered lowered payments without having to prove hardship, the federal regulator of the home-finance giants said. The streamlined modification program, to be put into effect in July, would reduce monthly payments by about 30% on average, officials said in announcing the program Wednesday. Eligible borrowers would receive letters explaining the modification offer and specifying the reduced payment.