Understanding Strategic Mortgage Default

Chaz Lamm — Wed, 03 Mar 2010 09:25:16 +0000

Paying way too much each month on an underwater mortgage? What are your alternatives to remaining chained to a loan that makes no financial sense.

Government bailouts were designed to help the banks, not the individuals. The system cannot handle millions of foreclosures at once without the frail man behind the financial curtain being exposed.

When banks sold us on the notion that a house was an investment instead of an expense, the path to ruin was blazed.

I do become enraged when I see talking heads putting people down for not keeping up with their mortgages – especially when they have no idea of the individual homeowner’s situation.

People lose sleep at night, fight with their spouses, and look for a divorce lawyer when they can’t pay their bills. How is this sinful?

Unless you intended to cheat the bank, there is nothing sinful or shameful in not being able to pay. Circumstances change through no fault of your own.

People lose jobs, get sick, become disabled, or die. Family members may not be able to pick up the slack.

Preachers and politicians will quote the Bible to convince you to pay, even if you have to put your family’s finances at risk. What they fail to mention is that the Bible also said to forgive debts every 7 years (reason 7 years was chosen in the first bankruptcy code).

Does it make any sense to continue paying on a property that is worth hundreds of thousands of dollars less than it could be sold for?

If you pay an exorbinant loan amount when you could rent the same house for less, you are taking food out of the mouths of your children. You are keeping your family poor while making your banker rich.

Banks charge interest on money they lend to you. A mortgage is a simple loan, a contract. They take a risk and have specified remedies.

In some states, the bank can sell the foreclosed house and sue you for the money they lost by lending to you – called a deficiency judgment. Banks will sometimes obtain a deficiency judgment even if they agreed to a short sale.

If your state allows deficiency judgments, you may have to turn to Chapter 13 bankruptcy to have your mortgage reset at current market value, or Chapter 7 and discharge that obligation altogether.

You never hear that a company is immoral when it dumps a non-performing property. Banks know that business is business, but they don’t want you to act in your own best financial interest.

When it comes to the bankers themselves, they do not feel so obligated.

According to the Washington Post, the Mortgage Bankers Association sold its Washington, D.C. headquarters for $41 million, about half what it paid three years ago. Was their short sale immoral? Someone in their membership may have taken a huge hit. I have not seen any apologies.

Do what is in your best interest. Falling in love with a house does not make it a sound investment.

Slavery was once moral. If in your best interest, use a strategic mortgage default to keep your family out of economic slavery.

Looking to find the best strategies for Stategic Mortgage Default, then visit Burn Down the Freaking Mission.

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Subprime Mortgage Lenders And How They Can Help You.

Thomas Goldman — Sun, 31 Jan 2010 21:35:28 +0000

Subprime Mortgage Lenders are ones which will lend to people who are refused by standard loan criteria. The typical reason for a borrower being refused by standard criteria is poor credit rating (which applies to about 25% of the population of America), but can also be about other factors such as different types of loan structuring.

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Most of these lenders were in some way affiliated to the big loan companies and all but a few have ceased to exist recently. They were not making it known that they were sub-prime, but would allow borrowing by people who were refused by standard loan agreements, and because of this could charge higher interest or fees or both. Other types of loans can also be sub-prime, including credit cards and auto loans.
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Investors were often not well informed that the investments they were putting funds into were really sub-prime and thus were a lot more risky than usual. One example is the third quarter of 2007 where sub-prime home loans accounted for 43% of the foreclosures started while only being 6.8% of the number of outstanding home loans. The fact that the real risks to investors were so hidden is one of the significant factors in the economic problems of 2008.
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Typical borrower profiles which might exclude them from prime mortgages are such things as two or more late payments in the last 12 months, non-payment of a loan sometime in the past, bankruptcy in the last 5 years, poor credit score or merely insufficient credit history data.

It is common for large retail businesses to sell a lot of their goods to customers who use sub-prime credit in one way or another.

Some businesses were found to deliberately lend in a way that the loan structure made it very likely that the borrower would not be able to pay back the loan. This approach resulted in nave borrowers taking out loans and then not being able to repay them.

Subprime mortgage lenders are currently rare but they can still be found if one really wants to look.

Want to find out more about mortgages, then visit Thomas Goldman’s site with the best info on Subprime Mortgage Lenders and other relevant topics.

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Understanding Strategic Mortgage Default

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Subprime Mortgage Lenders And How They Can Help You.