Illegal or just unethical? Walking away from your mortgage...

[VitruvianDoc]

I was visiting my parents last weekend when during a conversation they mentioned their neighbors are going to walk away from their house. They were white trash when they moved it, caused a lot of issues, and now they told my parents they are walking away. To top it off, they took out a 2nd mortgage and paid off both of their new vehicles and any other debt they had (mentioned this to my parents in a bragging manner).

They did this all since the husbands sister inherited a large house and offered to let them live with her (they have 3 sons).

So... is it illegal at all since they knowingly took a 2nd mortgage with the intent to pay off all other debt and walk away all together? Just angers me.... extremely.

 

[MaddSkillz]

Personally, I don't really care. It may be illegal but right and wrong isn't always easily defined by law.

 

[spd67]

You need to understand that there is a diffrence between criminal law and civil law. Criminaly this is not illegal but civily it is illegal and these people's creditor's can come back if they defalut on the morgage and sue them for the property, and they could also sue them for any assests they may have....like those brand new cars they have....

 

[SPDguns]

White trash? Go figure................

 

[ignerntbend]

We need to know the rest of the story. When the housing bubble broke, a lot of people owed the bank $100,000 on houses that were suddenly worth $75,000. In cases like that, the bank can have the house, in my humble opinion. And of course in a case like this, the house is collateral for the loan. Sound decision if you ask me. Let the bankers bleed for once.

 

[spd67]

We need to know the rest of the story. When the housing bubble broke, a lot of people owed the bank $100,000 on a houses that were suddenly worth $75,000. In cases like that, the bank can have the house, in my humble opinion.

Well I guess I will have to disagree with you...it is more a matter of integrety here. If you agree to pay a certain amount at a certain percentile and enter into an agreement regardless if the value goes down on the item you should pay it. It's like buying a new car as soon as you sign the papers and drive off the lot it depriciates 10,000 dollars. We were once a nation that was as good as a signature and a handshake now nobody can be trusted because of people that break their agreements.

 

[VitruvianDoc]

True I agree with that. I don't know the finer details of that matter, but it was the whole 2nd mortgage aspect that scoffed me.

 

[ignerntbend]

Well I guess I will have to disagree with you...it is more a matter of integrety here. If you agree to pay a certain amount at a certain percentile and enter into an agreement regardless if the value goes down on the item you should pay it. It's like buying a new car as soon as you sign the papers and drive off the lot it depriciates 10,000 dollars. We were once a nation that was as good as a signature and a handshake now nobody can be trusted because of people that break their agreements.

Why wouldn't the bank renegotiate the morgage? Because they're in business. Why should the consumer just bow down to the business interests of the bank? The bank still ownes the house, RIGHT? Integrity would go both ways in a better world

 

[twoguns?]

Sorry but I still disagree, it was the banks and the realtors that talked up the ARM accounts.
Knowing full well that these people couldnt afford these houses they were trying to sell (professionals taking advantage of simple civilians)'
Still my same theory they (the professionals) knew property values were going down ( or should have).
Now walking away, I dont agree with that either, especially if its pre-planned.
Working with the banks ( they cant sell this property at what They have in it) seems to be a reasonable idea.
Yes the days of a handshake as an agreement goes both ways...and neither are holding thier part of the bargain, its more like ..lets dupe the stoopid fockers and make them pay ...foreever
So I guess its which side of this you are on thats tells the tale ..!

 

[Twmaster]

Those peeps are scumbags. Taking out the second was low road.

Now, having said that. I walked away from my home back in Maryland. Not proud of this. The economy tanked. My business was off by 50%, diesel fuel over $5 a gallon. I tried and tried and tried for almost two years to do the 'right' thing. I did everything I could to keep that house. The bank just jerked my azz around and treated me like I was some sort or dung pile. The bank lost my paperwork every 10 weeks or so beginning the dance all over again including the multiple calls daily to rub it in and treat me like scum.

You reach a point where there is no way to continue. I went beyond that point. Much to my detriment.

Those of you that may think I am a scumbag with no integrity, well... Think what you want. It's easy to sit back and take pot-shots from outside the bucket of sewage.

EDIT: And yes. This mess is all my fault. The signature on the loan docs is mine.