A New York Mortgae Planners View:

Joel: Very true. We should always think about the long-term ramifications of our actions. It seems to me many people are very short-sighted. Thanks for the post!

Great post Joel.  People should consult a real estate agent or ender to provide them with information about the market and interest rates.  Then from there, they may require an attorney to help them determine what they should do in this market. 

Joel,

I'm absolutely conflicted over this subject. My own morals and values say, stay and pay. That being said, I've also seen the money the government is shoveling into banks who aren't exactly working very diligently to provide loan mods either.

Rich

Great post. Stick to your commitments if you can.  Mortgage is a committment. 

The banks made it easy for the homeowners to get into their homes, they should make it easier to stay there too. 

We need to view real estate ownership as the ability and freedom to own the place you live in, not as an investment tool. The fact that you can make a profit if you hold it 20-30 years is an added bonus. Too many people have walked away from homes they could pay for, just because prices dropped. They assume loose banking practices will return in time. That may not be the case. We will recover from this recession and prices will start to rise again. We need to think more long term.

Joel, as to your point #3, in North Texas, real estate has never been about appreciation in value cause we had so much supply and it was almost about consistent decline in values from the day you bought new. Excessive supply due to plentiful land and many new home builders. Now that so many new home builders have gone belly up, things are getting more balanced FINALLY. This current market I agree has tested the character of many homeowners in all parts of the country.

No doubt it's tough these days for most of us. You do what you have to do to survive no matter what the cost.

Patricia/Seacoast NH

I agree with much of what you have to say in your post. It is a buy now pay later society that we have built and it makes it hard to explain to someone why they should stay in their home that will be underwater for the next decade.

I just truly couldn't understand why someone would purposely let their home go. There are real people out in the world who are good people that were laid off from work and have no other alternatives. How can someone strategically stop making payments if they can afford too. You had no problem being issued the money. Why do you think you have a right not to pay it back?

Thanks for the post! Happy Holidays!

The problem is that when homes prices went up, houses were not looked at as a place to live anymore, but a ATM.  Now that the ATM has closed, people are walking away.  This wrong.  In the long run, walking away does more harm then good.

Real estate is one of the best investments we make in our lifetimes, and the investment we use the most.  I can't understand why someone would give that up so easily.  If you can make your payments...make your payments.  We have turned into a "disposable" society.

Amen and Amen to all you have said.  It seems that the moral tide in the this country is rolling the wrong way.  When home sellers approach me about "letting their house go", I try to help them look for options to stay in the home.  Have they considered the cost of moving, and utility and rental deposits?  They will soon discover that renters have a different set of rules than homeowners.  Have they talked with their lender about a loan modificatin agreement?  Chances are, if they would speak with a lender or REALTOR, they would find there are many options available that will allow them to keep their promise to the lender and repay their debt.  The couple featured in the WSJ article is in far better shape than any of the home sellers I have talked to.  Why not stay in your home, use your mortgage interest deduction and wait for the market to turn?  If you have to dip into your savings every now and then, so what?  At least you have savings to dip into. 

Thank you all for you comments.

Paul right on, people are short sighted and we have to be reminded of our long term objectives. That’s kind of hard when the accepted custom opposes long term objectives.

Joyce, Absolutely right! People should contact professionals before they make such decisions. And thanks for the compliment.

Richard, staying true to your morals is a personal war with many battles and each and everyone has to be won. You are absolutely right about the gov helping the banks, which is the longer shot of helping consumers. I would love to see a direct local government assistance program of reducing or abating property tax for a while to help struggling home owners. BTW, loan mods have some terrible issues associated with it, which are lawsuits from investors on those loan mods, and therefore banks have to be careful.

Mary Thanks for the compliment.

Norma, you are correct they made a terrible mistake and they are dearly paying for it.

Millie, So true you abbreviated my entire post in just a few words!

Gary, You make a great point. Real estate like many things is based on supply and demand. That’s precisely why we have appreciation. Of course in depends on locality as well.

Patricia, we have to survive, but occasional dipping into saving is not considered barley making it. Thanks for your comment.

James, the buy now pay later will work only if there is a large down payment large enough not to walk away. You are absolutely correct, and it is our responsibility to explain that to our clients. Thanks!

Derek, with moral like that we will never face another meltdown of that magnitude. Remember fear and greed created this whole mess. Thanks and happy holidays.

I appreciate your comments, and how great is it that we can discuss debate and collaborate.

Sincerely,

Joel

Paul, your analogy is correct, the only problem they cannot account for the money they withdrew from the ATM if only.. thanks for your comment.

Lina, I agree with you real estate is the best investment since you get to keep tho whole appreciation on an asset thats 70 to 80% leveraged. The only problem is the house you live in, is really a liability and not an asset. It only becomes an asset once you have it fully paid for, or have a plan of paying for it outside of your active employment.

Karen, Amen it is and amen to what to you wrote. let's be spiritual and pay our bills.

Thanks all

Character or lack of it will always  be a key to determining a persons health and wealth.

It's amazing how fast peoples attitude changed about their home when all the equity evaporated. They still need a place to live and as long as they have the ability to make the payment, they should.  Isn't that why they sign a "promissory note"? A promise to pay back the money?

It is a failure to assume personal responsibility when a homeowner walks if they can make their payments.  I wonder how many people who can pay their mortgages have walked?  I know a few.  It's hard to look them in the eye as I'm pretty certain they can see my disappointment and anger at their decision.  It is greed that has over-powered good character....and that's sad.  The anger rises when I think about how the rest of us are now carrying the burden they have shrugged off.

I love the title but I do not think its scenario some people are so upside down it would take 10 years to break even they could rent for 3 years get the credit back on track and buy for less than what they owe and I am sure some one is going to say that is wrong ,,, its a business decision just like what the banks do or corporate america or the real millionaires in this world that know when to walk away is not the same as quitting.

 I am gonna be the lone ranger and say draining your savings for a liability is not the smartest thing,

Making a short term move to have a lower payment without regard to the long term ramifications is ill-advised. I agree. It takes character to do the right thing.  

You're absolutely right Joel, the homeowners, if able to, should live up to their obligations.  I don't think this scenario is as widespread though as some would have us believe.  Walking away from a home can have some very long term detrimental effects to your credit score.  I think most people understand that.  The investors are the ones who are more likely to walk away from a property.  Great post and best of luck to you.

Too true Joel!  Thanks for reminding home owners of their promise to pay their mortgage.  Sure, some people have experienced very difficult times during the last couple of years however, they should not be able to just walk away from their home because it has decreased in value.  How many clients have we all had during this current market who used their home's equity as an ATM during the good times and now whine and complain that they don't want to take less for their home when selling.  YOU ALREADY TOOK THE EQUITY OUT when you took out your second mortgage to buy that BMW!  The BMW is your equity!  They have noone to blame for making this financial decision but themselves.

Quit your whining and pay back the loan that you promised to....

Joel,

Congratulations on being FEATURED!!  Wonderful post.  Many great points.  I think our generation has had it too easy....SO MANY people are walking away when things are "too hard".  Walking away from a mortgage. Walking away from a marriage. Walking away from a decent job.  Anything worth having will take some effort. :)

Joel,

well said!... home owners who lose the equity or more in their properties are mostly misguided ~ not only confused by negative media but also intimidated by banks and government involvement in the housing and financial industries. It is up to us, specialists to approach the consumer differently and show them the options available. I aim to reach them prior to making such decisions...Not an easy task, but an educated consumer is likely to err less!...

Wow, what a difficult decision some people have to make.  It's very commendable to those who stay and pay just because they signed an agreement.  Dishonesty caused the economic crisis just like honesty is what's going to get our country out.

Joe:

What is a challenge is the home owner that has lost his job or has medical issues. I know it can be the best of times as well as the worst of times.

I believe this recession has made many of us think.  I thought that when you purchased a house it was a place you call home and raise your family.  I never thought of real estate as an investment...whatever perks came along with it fine in addition to the bad.  Our beliefs differ from one person to the other but to just walk away from a commitment simply because value has fallen in my book is certainly unacceptable, but to each its own...there's an old saying, YOU GET WHAT YOU GIVE.

You hit the nail on the head with the issue of character.  It used to be that our word was our bond...now, even when our words are etched in ink (aka signatures on a contract) our commitment level seems to vary like a shifting tide.  

i will disagree with many here.  while i am not an apologist for the crazy borrowers who opted for loans that were tantamount to financial suicide, not many of them now are in a position to "dip into savings' to make their note payment.  i can even introduce you to folks who set  the table to default and did so with fraud in  their heart...but that's just a few, not all.

the practices of the lenders in  the last 7 years along with the casino mentality of the "owners" moved housing from the "shelter" classification of assets to  the "investment" class of assets. the lenders were an equal partner in the transaction.  if you are new to  the trade then you may not remember when everyone always had some skin in  the game and proved the facts they represented on their loan app.  even less than a decade ago...stated income loans were made only to those who brought money to  the table.

with so many different scenarios at hand and each with their own fact set i cannot make a blanket statement of stay and pay, or walk away.  true enough, pay long enough  and the note will be retired, but we all know that only a tiny percentage of borrowers stay in a home for the 30 years it takes to retire a mortgage...indeed, if they have an amortizing note that's a rarity. so  the admonition to suck it up  and make the payments sounds nice but it ignores the reality of the situation.

the decision becomes one of what is best going ahead.  do i continue to bail as the waves come over the transom or do i accept  the fact that the ship i am on is going down, accept reality and take prompt action to right my ship going ahead.  unfortunately the very largest majority of owners will make the businessmans' decision and walk.  it doesn't take long to decide that the fully indexed payment of $4500 on a house i can rent for $2200 is a suckers bet when you consider  that  the home that i bought for $680,000 is worth less than $500k now and will never be back to $680k in my likely ownership time  frame, if EVER.  i know folks who have decided that their other obligations like car notes, credit cards, little league fees, tires for the car and such are more important than the home that can never be paid for.   i can only hope that they will take the lessons of this financial drubbing to heart and learn from it.  the numbers i am using are common here in california so if the numbers in your trade area are far less, then it would be a different calculation and perhaps a different result.  in my area we are talking about THOUSANDS  per month in many cases, not hundreds.

we read last week that many folks are triaging their pile of bills as they decide which gets paid today and which gets set aside for a while.  they don't need any of us wagging our fingers at them and telling them they are immoral for looking at  the note payment and crying uncle.

Joel, There is a big difference in leaving your home because the value dropped and because due to circumstances you cannot afford the payments.

No one ever said homeownership would be smooth sailing. Homes are first and foremost a place to live not an investment to be lived on. I can understand not being about to make your payments but I cannot understand choosing not to make payments that you can afford.

If the couple in the WSJ article "borrowed" on their mortgage (an increased paper value) to pay for a wedding, and schooling -- and they had money in the bank, i.e., savings, why didn't they NOT borrow againt the equity of their property, and pay for these things (which had nothing to do with their property)?  A police officer and a real estate agent hopefully are living within their means, and not spending on elaborate weddings.   They bought the home 4 years ago, so MOST of the payment is going to their interest.  By borrowing money against their property, they now have created a tax write off for the wedding and schooling they paid for, where otherwise, these types of expenditures are NOT write-offs.  As far as Zillow's"valuation" of their property . . . HA HA HA HA HA HA . . . Zillow just cracks me up!

In the WSJ article, they mention that they have horses, dogs and over an acre if property!

Please get over yourselves,homeowners, and appreciate what you DO have. I'm sorry if I can't sympathize with their trauma.  A house does not always equal cash flow or appreciation.

Thanks for sharing. It was a great thought-provoker

Right on. If they can afford to pay they should. I was pissed a few weeks agon when I heard a couple bragging that they had not made a mortgage payment in 10 months and their bank was so far behimd they had never been contacted so they were going to continue to stay for free until someone caught them. I think a lot of this is going on. America is getting used to the idea of oh well we can screw up because big brother government will bail us out and we'll only get a slap on the wrist. Who cares.

Sadly the disposable society we live in promotes non-accountability and just getting rid of something and replacing it when it no longer suits you.  I think a lot of our trouble today is a direct result of this attitude.  Character is definitely in question in these decisions.  Good post!

Hi Joel-  I so agree with your perspective and thank you for taking the time to write this.  I feel that many of the people who gave up on home-ownership will be very sorry to be paying a higher interest rate in the future and will not have had the advantage of years of payments on that home.  Instead, many will start over with no equity.  --Sara in San Antonio

Joel,  great post.  I see both sides, but bottom line, if they were renting, they would be throwing away money on rent.  They made a commitment and unless it is because they can't financially afford the property, they shouldn't walk away.  That is only compounding the issues with housing.

Hi Joel -- This indeed is a very complex problem and I don't believe there is a "one size fits all" approach at an individual level.  Consumers are just one piece in a complex jigsaw puzzle.  There are many in this field of real estate as well as corporate america and wall street who profited very unjustly.

Hi Joel~ I guess unless we actually walk in someone else's shoes, we never really know what we would do. But, I personally think it would be extremely difficult to walk away from a financial responsibility, period. 

I agree, that's why they make you sign that promissory note to repay your mortgage.  I don't think it says "walk away if you feel underwater" anywhere in the note.  The same people that fight through it will be the ones that have the big equity on the back end.  I hope these blogs are educating the people.  Stick it out, it's worth it.

Good post Joel. I'll never be able to put a price on my character.

The wife is a real estate agent.  I would guess that her income is off at least 50%.  They could afford the house when they bought it.  Now they cannot.  How many times must they dip into their savings?  Is it better for them to lose the house now or a year from now?  These are the type of questions many people are asking themselves.  

Joel, I agree 110%! Most people who walk away from their homes do not want to be considered "Renters". They immediately want to buy again...many with no money for a down payment and sub 600 credit scores, because they think that they are "entitled". Break one promise to me, probably will not get a second chance. Thanks for sharing.

Russell, correct character will determine health and wealth.

Ed, are you by any chance the former chairman of the RNC? ;) Your right , equity seems to be the determining factor . But we all know that equity is frozen. So lets stick to payments, and obligations.

Kristen, You make a valuable point, it is us who carry the bag for such a careless decision. Real estate values decline or stay lower for longer because of their self inflicted foreclosure. Thanks.

Gene, great point but that’s not our debate. We are debating first and foremost, should they walk or at least deal with the issue by trying to negotiate, short sale as opposed to just walking. And secondly, most likely it is not going to be a liability for much longer. Household population is growing at a pace of 1.4 Million per year, new houses is being added only 1.6 million per year. And about 300,000 old houses  being demolished. With an overbuilding of over 2 mill per year as in the last 2 years, and a under building this year and next and tighter lending environment things will even out and real estate will not be such a liability for ever. That’s where fiscal literacy comes in before you take your savings and steam the public money. Great point though, thanks.

J. Philip, a move for short term lower payment is still OK, but to cut and walk id entirely different. Thanks for your comment.

Jerry, I certainly hope that the problem is not that widespread. However with the constant reminder by the media how many houses are under water, and the bad news coming at you daily, only time will tell how many where out there for them self’s.

RANDEALL, Bam you got it! The BMW is you equity. But wait a minute, is that right did I make such a stupid decision? I cant believe what I have done, once I drive the car off the dealers lot, it is worth 5k less.

Sonja, Thank you never knew what it means to be featured. I guess lots of new friends! And you a great point yourself, we should be called generation w for walking not gen x.

Isabel, right on target, that’s a true sales person, somebody that can offer the client to cut through the clutter of conclusion. I guess we need to do periodic reviews with clients and not just when we can sell them a mortgage or a property.

Shane, wow couldn’t have said it better maybe in the next blog post. Honesty and Character can get us out of this mess. Thanks for the brain food.

Lorraine, we are not blaming a homeowner like this who lost his job or have medical issues. The lender took that risk whey they issued the loan that somebody can loose their job. That is why they usually want a large down payment that people will protect despite a job loss.  True we have to still remember the unfortunate.

Cheryl, Correct most financial thinker will not consider a residence an asset unless it is paid off, or enough money in the side to pay it of at any point in time. If is illiquid it is not an asset, especially if you are making payments on it. Thanks for your comment.

Lola, as I once heard some saying, my word is stronger then a signature, If I tell you I'm not going to pay I wont pay! Thanks.

Michael, you are painting a picture of unfortunate situation where clients do not have ability of staying. Triaging their bills, or an investment where only minimum payment can cover the bills and not the fully index payment’s. Although the latter is criminally ignorant never the less it is a situation. We are talking about people who have horses and cars and assets in the bank to cover the short term dip. Although the dip might be steep, negotiate, work something don’t just walk. I bet that you agree on that too. Of course there where lenders who accepted to much fraud. But that was their decision and their own risk. But the other side of the coin is not to blame the lender for you misfortune just because they gave you the loan.

 I know many renters to choose to sit out the real estate boom and are just now buying their first home. No body forced anybody into a loan that will adjust recast or balloon. And neither did anybody force somebody to buy an overpriced house in an overbuild community. You make a great attorney though!

Ted, 100% correct! Needn’t to say more!

Christa, right on target thanks for your comment.

Carla, if you refinance and cash out the money is not tax deductable, unless it is 100k or less. Generally only acquisition in debitness is tax deductible and not home equity debit with the exception of 100k. But true, pay for things with money you have and not with money you need to borrow.

Deborah, no body picked up on that point before you! Thanks for checking if the link worked ;)

Steven, you should have pointed out to them that most likely their holding in their 401k declined to them and their company choosing not to pay on their obligation or maybe they haven’t made a payment to their 401k or IRA in the last 15 years either. Thanks much.

Jeani, thank you, I am 100% percent in agreement.

Sara, you make a wonderful point. This whole is going to be plugged from somewhere. Most likely interest rates will spike, or a special tax on or buyers with this history. Great point thanks.

Heather, they choose buying over renting most likely for their independence, well keep the commitment. Thanks

Chris, correct point, but this outside the scoop of a buyer who borrowed and has the means to repay.

Vickie, I call that character, thanks

David, that’s precisely the point if making a business decision to walk or to dtay at least be informed of ethics and moral as well as a pay off in the end. Thanks

Wayne because of people like you we still have a real estate industry.

Matt,  again with the same unfortunate buyer, but the article we discuss states “occasional dipping into their savings” seems hardly that they will loose the house anytime soon. Thanks for your comment.

Bobby, so true, as investors we know the truth don’t we? Thanks for the comment

I appreciate the opportunity to debate you all and thanks for your comments.

Joel Silberstein

www.joelsilberstein

I feel alot like Rich. If you can pay, you should. It is your debt and obligation. I hate that so much money is going into banks and not coming out in helpful ways more.

Love this post!

Happy Holidays.

Patricia/Seacoast NH

In life and business it is about doing the right thing. Do that and the rest will follow.

Joel,

I think your stance is a brave one especially when we hear so much about predatory lending and such as being the reason why many are losing their homes. Many of these stories are factual but a great deal of these people have their own unrealistic expecations and fantasies to blame as well. I have close associations that spend and spend and spend and then go bankrupt and then spend some more. It's not fair to the rest of us and I appreciate that you spoke up.

Great post - character counts. If you have no integrity, you have very little, indeed.  Have a very blessed day!

It is so sad that we live in a society where so many people are morally bankrupt.  I can't even fathom walking away from a mortgage and a home.  We truly find out what we are made of in difficult times.  It seems that the American people would realize that there are SO MANY PEOPLE who are upside down right now.  The problem is that we want instant solutions, and there is no such thing as instant gratification in this situation.  I hear this from a lot of my friends.  They don't know what they are going to do either, but they keep doing what it takes to make their mortgage every month.  Our President needs to step up and tell the American people to have some character during these times.  Hunker down and get the job done. 

There is a percentage of people who won't be able to get around losing their homes, but that is a small percentage.

Very timely post this Thanksgiving holiday - we as Americans have so much to be grateful for; time for us to realize that this, too, shall pass!

Great post, Joel.  Unfortunate title.

"Character" means not only continuing to pay on a mortgage, but also how people handle financial crisis brought on by factors outside their control.   This is especially true for Baby Boomers who have seen their retirement savings slashed by 50 percent or more and their home equity evaporate.  People of this generation are having to make very tough decisions now, among them whether to walk away from their homes or continue to pour their remaining savings down a black hole for several years in hopes that one day they will regain lost value.  In many areas of the country, time is not on their side.

It is unfair to stigmatize all those who make the agonizing decision to walk away from their home.  Each situation is unique and subject to a variety of different circumstances.  Maybe the recession and housing market decline hasn't hit your area as hard as locations like Nevada, Arizona, California or Florida, but there is real pain in these areas.  Boomers in particular are having to make hard decisions that they never expected to face at this point in their lives.  I'm familiar with many instances where "walking away" became a matter of financial survival.

So please don't generalize the application of terms like "character" and Integrity."  Sure, your points and those of other commenters are on target in many cases.  But for those who have lost their jobs, had their businesses go belly up, or who are in the process of downsizing their retirement hopes, "sticking it out" may not be a viable option.

In the early 90's I watched my first home a condo dip and loose almost half of it's value.  I stuck it out and made a good profit.  I have been disgusted when I see people walking away that have nice cars, huge TV's and all the other toys I cannot afford for my family. 

However, I am being less judgemental.  Many of these people put everything they had into getting a home, that is now turning into a prison as the neighborhood declines and they cannot sell.  My old neighborhood went from wonderful suburb to someplace I could not let my kids out of the house (I was lucky to sell with equity).  I see the government giving Billions to those that are "too big to fail" and rip up contract law; while those that are "too small to have influence" get screwed.

I grew up with the core value of honoring your word. 

But - are there exceptions to the rule?

What if the person you made your bond with lied to you to induce you into the agreement?

What if they were so large they that they could determine the value of the thing you were purchasing by

the way they lent money to everyone?

What if they were members of the Federal Reserve, owned shares in the regional Federal Reserve banks and were the most powerful lobby in Congress? 

What if the engineered booms and bust on purpose designed to suck the equity away from people who kept their bonds.

What if they were able to do all this via fractional reserve banking?  So in reality they did not have all the money they were lending out in the first place?  It was funny money?  And then they turned off the spigot?

Hi Joel,  If you reverse the circumstances ( the house is actually appreciating - not depreciating ) would the couple walk away ?  Of course not.

Thank you, that was a fine reminder.

Joel, character and honesty is in harmony with doing the right thing. Money however seems to change character. Good post

Ty

Hi Joel,

I am with Al, Michael, and John -

I have seen people of amazing character, integrity and fortitude live in destitution as a result of "sticking to their guns and doing the right thing."  There is no virtuous circle that guarantees "doing the right thing" will be rewarded in the end. Quite the opposite in many cases.  The fact is that we live in a society where you are very much on your own.  If you don't walk away from that house, is food going to magically appear on your table? Is someone going to pick up the tab for your medical bills when you get sick?  In most other Western nations (that are  more civilized than we are)  there are enough safety nets so that what this post is proposing makes some kind of sense. But not here. 

And quite frankly - there are relatively few people out there who have the means that you are talking about. Those stories sell newspapers that the far-right scarf up.  I would go further to suggest that the wagging finger that you are waving is irresponsible.  By doing so you are encouraging people to put themselves in increasing financialy peril - possibly pushing them off a cliff.

Joel-

You have started a round of comments that will never end! Will we ever really understand what has happened to our economy? I agree with John C in that the fractionalization of the toxic mortgage debts has caused an economic virus that has spread throughout the world because the toxic loans were sold to investors globally. almost like timeshares. Now it is too late to recover all those bad investments and the bail-outs are money spent that will just increase the national debt. I don't know if those decisions for securitization of the debts and their sale on Wall Street was the decision of a privileged few board members or done in ignorance of the future consequences. I do think the legislative regulators were asleep at the wheel and let the debt slide through. Intentional or not,we have a situation.

Either way, we the people are going to be accountable to pay it off in one way or another. I can't believe that people aren't squawking more loudly to DC. I feel underrepresented as a middle class citizen and see the demise of the middle class in the US if this economic ship doesn't turn about. And they had better not raise our taxes or it's over for us too! If everyone were to walk away from their underwater house, what would happen? I can't imagine it would be a good thing for the rest of the world.

Thanks for letting us ventilate. I am grateful that I can share this publicly.

Joel: Good post about character. But if owners weren't using their homes as an ATM there wouldn't be 1/3 of the problem there is now.  Equity = nice vacation. Equity = new BMW.  Equity = whatever I wanna do!  Cha-ching and now they are in the hole.  That's irresponsible & immature if you ask me, so why are you thinking they will have character too?

It is a character issue more than a financial issue if they can make the payments but have chosen not to. 

Well said!

Bottom line, If they asked to borrow the money and agreed to pay it back they should pay it back if at all possible. A person is only as good as there word.

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Welcome back from a great thanksgiving weekend I hope you all Had a chance to reflect on what we give thanks and perhaps it was for the hidden opportunities in the current real estate market as well.

Vanessa, I am with you if you u can pay you absolutely should. With that aside we can debate the money going to the banks separately.

Patricia Thanks for your comment again and I do hope that the happiness will continue long after the holidays as well!

Scott, so true and it so simple but we tend to forget it. Thanks

Anita, Thanks for you compliment, I really do feel that the consumer is more guilty then they are portrayed. I had a friend/Client ask me can I not just make a deal with the bank on my Home Equity line? Me- but you have the money, Friend- yes but why wouldn’t I keep it.

John and Susan, what you wrote is so true. You cannot make a good deal with a person who lacks character no contract will protect you ever.

Emily, What a great comment, we do owe our banks, government a thanks for the freedom we still have and although it can be better it will only be so when we start taking our obligation seriously and start taking charge of our own life. Thanks

Al, you make a great point. But like many before you stressed that as well if you can pay. If it makes no sense to continue to pay then work out a deal with the bank don’t just walk!!!! There will always be exceptions but that make the rule is dangerous. Thanks

Gene, Thanks for your comment, you where according to your comment a living and breathing testimony that despite a sagging real estate market with a little character actually made profit. Although you had to sale due to the quality of you neighborhood declining.  Thanks for you comment.

John, Thanks for you comment but I have to take issue with you.

There are no exception to the rules, there are however times when the rule does not apply.

For example, where the other party changed their word mid deal.

But in the instance when the other party induced you into the agreement and you didn’t read the agreement, but was just interested in the inducement I don’t think that this is where you can just back out of the agreement. But I am still wondering where did banks induce people to get a mortgage? Low rates?  Teaser mortgages? Did anybody force you to take them? Are we that dumb that we need options taken away from us so we can thrive?

Yes they lent money to everyone but based on consumers word that they earn the money and are capable of paying back. The reason they where lenient was because money was available to them due to some comprehensive trenching methods of layering risk so investors where enticed.

With regards to engineering booms and busts, I don’t think lenders have the capabilities of doing that, and besides if they did would they? Large lenders to get to the brink of bankruptcy was their plan? Having the FDIC look over you to raise your reserve ratio was that their plan  too? It makes a great conspiracy theory but that’s about it. Theory!

Bill, Thanks for your comment, and I don’t think that the couple would walk if the house appreciates. That’s my point, it will appreciate give it time.

Susan, Thanks .

Ty, Thanks you and you are absolutely correct money changes hands, thereby changing character too.

Ruthmarie, we are definitely not talking about people who have issue paying and have a choice to make food or shelter. Even with these people walking is not an option but picking up the phone and trying to make a deal is. I don’t thing you read the link to the newspaper I posted which is clearly about a wealthy couple who are not near a cliff and actually do have savings to dip “occasionally” in until the real estate market catches up.  Appreciate you passion to this matter but as far as waging you finger into my face saying that I am irresponsible for discussing an issue that will help you and me and the economy as a whole, and not simple walking away when you have the means to hold on until it gets better is simple extra effort and over reacting but I do appreciate raw passion when I see it Thanks.

Deborah, thanks for your very intelligent comment. I cannot add anything to what you wrote with exception of elaboration which I might do  in a future post. Thanks again.

Lyn, Great Point as Robert kiyosaki says there are no good or bad investments. There is however good or bad investors.

Darrel, Thanks for your comment and thanks for making it clear what it is we are talking about here, if they can!

Scott thanks!

Alan correct! They agreed, they can, so hold on and pay and don’t walk away!

This has been a hard lesson, hard pill for the world to follow and correction is an X#!$. Most of us need to change our priorities, perspectives, and goals...and time will get us to the other side as long as we keep pushing through.