The attorney’s position with regard to homeowners staying in their houses, rather than walking away, makes sense as he has structured a defense from the homeowners perspective.

If the lender refuses to consider another option to keep the homeowner afloat, this can create an attitude of defiance on the part of the homeowner. They know there is a good chance the house will be auctioned off. They also know they are out on the street if they walk away from the house. And in the minds of some, they recognize that foreclosure does not stop the financial or even legal challenges they are likely to face from both the lender and others they owe money.

Wall Street and financial institutions are reported in the media to be the root cause for our languishing economy, the market crash, unemployment, and the down turn in the housing market.
No question some lenders were greedy and unconscionable with the loans they approved. Loan applicants that never should have qualified or loans that were paper transactions like in a monopoly game. Now we are looking at record numbers of people facing foreclosure and what do the lending institutions do they re-confirm their negative image with the public. Too often they do not want to work with homowners or investors, as they attempt to get all of their money back, even if it shreds the lives of the very people they setup for failure.

It appears that the attorney in this case sees himself as the white knight in this process fighting for the underdog. He positions homeowners as victims, not as people who did not honor their end of an agreeement. He is willing to ignore the entire transaction process i.e., the mortgagee was presented with a contract, informed of its content and the terms of the loan, and the paperwork was signed by the mortgagee and notarized, confirming the contract agreement.

My recommendation for managing this situation with homeowners in default on their loans would be to form two groups, compassionate H/Os and non-compassionate H/Os.

Compassionate H/Os are individuals facing hardships do to extreme circumstances. (The specifics as to who qualifies can be determined by the lenders). People in this category would be reviewed on a case by case basis and presented with optional loan restructuring strategies.
Non-compassionate H/Os are individuals with changes in their lives, but their misfortunes are linked to poor spending practices or they were in over their heads financially from the outset of the loan. Many of these people have little or no skin in the game and without a second thought are willing to stop payment on their mortgage, play the victim, and attempt to stay in the house until forced out.

I have very little compassion for the undeserving.

Perhaps the attorney is able to justify acts of unaccountability by people who seek to live off the work and earnings of others when it comes to healthcare, food, clothing and transportation.
People that are of this mind-set do not look favorably upon a capitalistic system. Equal access to all things. No incentive or reward for acheivements. Everyone has access to the same goods and services. No penalty for wrongful acts. If these concepts become standard practice they will harm our society.
We live in a time in which pain and suffering are classified as in-humane. No one should have to face obstacles in life.

I will never condone unaccountability or irresponsible behavior.

I would suggest that bank presidents and their board members should convene and formulate practices that show they are receptive to work ing with people that are legitimately good customers. These customers need to be presented with some options that will help them get through a difficult time in a “reasonable” amount of time. Both parties stand to win with this approach.

There are humane solutions to the foreclosure epidemic. I just don’t believe the answer is through obstructionist legal practices as proposed by the attorney.

maybe its everybody’s fault …

However, if fraud was involved at the signing of the mortgage note, the contract is null and void. Of course if YOU have knowingly participated in the fraud, that’s a different matter.

Our laws show that this is true. As you’re probably aware, some mortgages HAVE been canceled because of it (through MUCH expensive litigation, though).

I believe it’s irresponsible to walk away from our mortgages if there was no fraud, and we intended to live in them, no matter how much the price went down.

Things *could* change. As stated in the PDF, interest rates probably will rise, and the ones with 5-8% mortgages will be glad they stayed in their homes, even though they were upside-down.

There may be a silver lining in this…

The only difference between the economic times now compared to the late 70′s and early 80′s is that back then there wasn’t much of a chance of hyperinflation.

When we see hyperinflation happen here in the USA (I think it’s inevitable), not only will the interest rates be sky high, but the money will be so diluted, that the home values will sky rocket and paying off that mortgage will be done so quickly it won’t even matter anymore.

This of course is a worse case scenario, but I think it’s a possibility.

With all this being said, I don’t think homeowners should stress about our economic times and the problems they’re having with their mortgages. Just hang in there, and plan accordingly. If you can’t pay, you can’t pay. If you can, pay. We’ll get through it just as we did before.

And that’s just my two cents (which coincidentally is the current value of the dollar compared to 1913 values when the Federal Reserve took over our currency).

Nice article!

~ Ryan Thompson ~