March 11, 2008

Failed housing gamblers now living rent free in America: "They say, 'If I play my cards right, I can live here free for 12 months, maybe longer'"

Millions of failed flippers put zero down, took out a low-payment loan, and got to live in a home way above their means these past few years.

Now the homes have crashed in value, the loans have reset, and the f*cked borrowers simply stopped making payments.

Meanwhile, they continue to live rent-free in their McMansions, and are extending their stays with calls to their lenders and the government, who of course want them to stay in their homes and bail them out.

Pardon me - I just threw up.

OK, so there's no doubt this is happening all across America today. This is what you get when you ask people to put no skin in the game, and lend them stupid amounts of money with no reprecussions if they don't pay it back.

But in the end, can you blame the homedebtor? They bought a lottery ticket, it didn't pay off, and now they get to walk away (after living rent free of course). Nice game while it lasted.

Mortgage lenders see more borrowers give up

On the front lines in the mortgage foreclosure crisis, lender and loan servicer Dennis Lauria says his deepest losses are from borrowers who owe more than their homes are worth and simply mail in the keys, rather than try to work out a new payment plan.

"I can't get you to pay if you've got no skin in the game," says Lauria, senior vice president of Popular Mortgage Servicing in Cherry Hill, N.J., who says 14% of his customers with subprime loans — high-interest loans given to people with poor credit ratings — are in default.

The numbers help explain why it's so difficult to reverse the trends of rising foreclosures and falling property values. Even some homeowners who can afford to pay their mortgages are defaulting, Lauria says, because their house might have lost 30% of its value, and they figure it will be a long time before it's worth what they paid for it.

"They say, 'If I play my cards right, I can live here free for 12 months, maybe longer' " before the lender can foreclose, Lauria says. "Our challenge isn't contacting the borrower. I can talk to them, but they stick their tongue out at me."


Ed said...

Bbbb bbbb bbbut Keith, weren't you ranting and raving about Mozilo and how he should go to jail for ruining lives? Yeah some lives ruined. A year or more of free rent in a 5000 sq ft McMansion. Dude deserves the death penalty I tell ya.

Come on dude pick a side. Was it the banker's fault or the greedy FB's fault?

Anonymous said...

I kinda like the fact that these dumb homeowners who got in over their heads are actually sticking it to the dumb mortgage compaies who thought they were ripping off the borrower with a BS loan. Finally the little guy who got screwd is screwing the big institution.

Ohio Loan Officer said...

One guy I know has been renting this house the last few years. The landlord went into foreclosure about a year ago, the bank took it back, and has been trying o sell the house fr overa year now. This tenant has not paid rent in well over a year. No one has asked him to???

Anonymous said...



Anonymous said...

I spoke to a bankruptcy attorney the other day. He said that most of the banks are not forgiving the short fall on the loan if it looks like any form of fraud or bad behavior took place. In the end they get the free rent but they also go into bankruptcy. Once that starts life gets a lot harder. Suddenly your McMansion is a 2 up 2 down 40 year town home in the bad section of town because no apartment complex would rent to you. Now its all about private landlords who you can actually afford on your minimum wage salary.

Andrew Hac said...

OK, Snapper Turtle and all other tortoise-like creepers out there,

Listen and listen hard:
A house is a place to sleep in, eat your meal, do your homeworks, make kids, get piped-up, get shitface, smoke a doobie, take a doo-doo, etc...
A house is not an investment, a stock purchase certificate, a trading commodity, a bank, an ATM machine, etc...
Not every turtle is entitled to own a house. Owning a house is a privilege, not a right, not an endowment from God or Uncle Bushie.

Most Americano believe that it is their God-given right to own a house. Heck NO !!! That is incorrect. It is also stupid to heed that belief. If you are poor, ignorant, illiterate, dumb, uneducated, buckteeth, harelip, fat, obese, or just plain WACKO then you do not have the right, the mean or the privilege to own a house. No BUT, IF, HOW, WHEN ,WHY, WHAT, etc...

The game of survival is simple. You are strong then you will survive and prosper. Your descendant will grow strong and will not have rotten teeth or marry his/her cousin as spouse. Joe6Pack is like a gazelle in the African Segenreti plain, his destiny is to be hunted down, chased after, pursued relentlessly, devoured by the lions, the leopards, the hyenas, etc... Joe6Pack does not simply possess any right or privilege to own a house in the land of the Americano AKA the land of the Skunk.

Got it, Turtle ???

Anonymous said...

I feel sorry for none of the borrowers or lenders. Let them kill each others.

Anonymous said...

Sad that when you sign a contract AND THEN CAN'T PAY START TO BLAME OTHERS GROW UP .

Anonymous said...

They keep forgetting, credit rating falls to nothing, possible bankruptcy, and a 1099 for the loss on the sale by the bank.

The banks will remember these customers. They will pay eventually in higher rates, bigger downpayments, etc..

Anonymous said...

Most homebuyers probably feel like throwing up too. It can't feel anything but awful, no matter how great the fantasy.

Now most people who are in a financial pickle are getting more honest with themselves and realizing that nagging doubt that it was all too good to be true should always be listened to.

In 1965, as a young mother and student, I was shocked when my husband called me and said he'd bought a car, because one of the biggest car dealers in town told him to come on down and he'd get him a deal.I didn't have the moxie I have now at 64 so when hubby and salesman presented me with two loan papers to sign for an $850 car when our income was $150 a month, I signed. My Dad helped us refinance through a credit union later when he realized what had happen and it was slightly more doable.

In recent years, people have just thought 'banks' and mortgage lenders, which are quasi banks had found a way around the laws of physics and finance; after all, who would know better than the person standing to lose money???????
*EXCEPT* They weren't really banks and they undid some old regulations
so they could skirt around common sense...BUT--did anybody tell the average person? Did anybody tell them they were going to foist off those mortgages as soon as the ink was dry, probably before???

Grandma PKK

Anonymous said...

but it's california, and people want to live there damn it. they will find a way and numbers mean nothing

Anonymous said...

"In the end they get the free rent but they also go into bankruptcy. Once that starts life gets a lot harder. Suddenly your McMansion is a 2 up 2 down 40 year town home in the bad section of town because no apartment complex would rent to you."

That's known as bifurcated housing where those with good credit scores can live in decent apartment complexes but others, in dilapidated dwellings.

Anonymous said...

Hey crook free renters, or as we call them here at HP, life failures. Enjoy your free rent because after that, your rotten credit score will make your lives extremely difficult and expensive, from higher insurance rates to lost job opportunities to landlords spitting on you after checking your lease/credit application for rentals. America will be a very expensive place for people with rotten credit like you. Good luck with those sharks aka Credit Card companies. Make no mistake about it, you'll be paying a huge premium for EVERYTHING, add to that skyrocketing inflation. Enjoy.

Anonymous said...

Dont forget it is not just the 100% losers, but some people put 20 to 30% down payment. It is not just these losers 0 % down who are losing.



Classic. Sleep tight Mozilooo. I hope your new wife named Joe at least gives you a reah around...

Anonymous said...

omg omg omg, get this. I put a couple of basketball tickets for sale because I couldn't go. The tourist who bought them told me that he was renting, for a few days, a brand new luxurious condo unit from flippers. The flippers went to pick him up so they would act like guests while entering the building, since it's prohibited to rent the units like a hotel.

Not only the mortgage fraudsters aren't paying the mortgage and living rent free for 12 months, but they're also renting the other flips in the same condo to tourists, and against board regulations. And the geniuses who actually bought the units to live in and are paying the mortgage accordingly and following board regulations, are subsidizing all these other fraudsters, and putting up with wild drunk tourists who couldn't care less about the premises. Wanna bet these fraudsters are Realtors?

America is the land of crooks, no doubt!

Anonymous said...

This guy should be in jail. Oh, sure he is complaining now - and trying to explain his way out of this mess - but it is the stupid homeowers fault?? I agree - some loans they did were to investors who are taking advantage of the system. Did popular mortgage accept "loans based on fraud", of course they did and I am sure someone there got a great big "atta boy" in the form of cash! Please! I speak from experience - I have a mortgage with them. Which my mortgage broker ripped me off on. My house was in foreclosure and I REPEATEDLY CALLED AND WROTE AND FILLED OUT EVERY FORM THEY COULD THROW AT ME to try and work it out. Eventually I saved enough to bail myself out. I have always told everyone - the bank does not want your house - well I was wrong. If you have equity TEY WANT IT ALL RIGHT. NOW 3 MONTHS LATER - AFTER I CAME UP WITH $25,000+ TO SAVE MY HOME - THEY STILL SAY I AM IN ARREARS OF $7,000! iLLEGAL FOR SURE - WHEN a foreclosure is "re-instated" it clearly states - no further fees are necessary. Some of us are trying to save our homes and not looking for a handout! Also, 14% only are subprime??? What a joke - go to your sherrif sale one day - 90% of the homes being auctioned are POPULAR MORTGAGE SERVICING, INC.