Is Foreclosure for You?

Caveat Emptor.
All of the problems that have arisen for the borrower in this scenario are natural byproducts of risk. By making an investment (purchase of the home), the borrower takes on risk. This isn't even econ 101, but a basic and fundamental truth any money-handling member of society should consider.
As for a lack of help from a bank, why is it their problem. Let's not forget that they took on risk by providing the loan in the first place. The basic structure of a mortgage is outlined in great detail in the loan documents. I would bet dollars to donuts that the documents don't contain any language about the lender being "willing to take a deed in lieu" or to accept lower payments to accomodate a sob story. A mortgage is a business agreement, and while a borrower might hope to get a break from their lender, they are in no way (read: NO WAY) entitled to it. The banks are losing money on these loans, money that was meant to go somewhere else, like their employees' 401Ks, medical benefits for their employees or, most importantly, to their shareholders or investors. Let's look at this scenario from the other side, as a shareholder of a bank involved in sub-prime lending, I entered into a business agreement with the bank when I invested. When I did so, I was hoping to make a certain return on my investment. This return will now be significantly lower than I had hoped. Should I be bailed out? I'm sure the vast majority of responses would be "no". However, I took on risk, just like the purchaser of the condo in this article. Why is my situation different?

Please let more foreclosures happen. I feel the need to make more money. I can smell the bottom. In a couple years we'll all be flipping again. Can't wait!

She should have taken a second job to get her thru, while looking for a new job in hew salary range. Or taken on a roommate. Was she not paying attention while going thru the closing documents with her loan officer? Every house I have bouth, it is clearly spelled out who is paying for the property taxes and insurance. My first loan had it included, my second and third did not, but I was told.

archangel333, so what? This is america, and so long as everyone is following the rules (shame on those guilty of predatory lending tactics), why should the banks make an effort to "turn off the interest machines"? I'd like to point out that the "interest machine" as you so euphamistically refer to the the interest rates due under the loan agreement were turned on when the borrower accepted money. No one held a gun to anyone's head, they simply gave them money in return for certain requirements. It's the borrower that didn't live up to their end of the bargain, here. I cannot dispute that unsavory individuals exist and openly look for ways to exploit the under educated. Given the facts stated in this article, this certainly could have been the case. However, it is ultimately the end consumer's responsibility to understand and price that possibility.

The whole deal with the foreclosure situation is due to the "NEED FOR GREED", with absolutely zero compassion on those who find themselves in unfortunate circumstances that lessen their ability to pay their mortgage. Whether they just simply fall behind on one payment or need to negotiate with their lenders, the banking institutions are totaly indifferent to the homeowner and refuse to turnoff the interest machines that they started in order to help anyone out. PERIOD!

Well, god bless you, for never making a bad decision, and I guess from your lack of empathey never had to struggle in life..... Good for you,,, Do you spit on homeless people too? as you walk by with your Big Mac in your mouth>>>>>>>>>>

I am in a similar situation in the Philadelphia area. I bought new construction in June 2005 based on a job relocation. The job did not turn out to be at all what was presented to me and I decided to move back to where I came from. Subsequently, I put the home on the market in Spring 2007 when it was about 2 years old. I have spent my life savings making mortgage payments on this unoccupied home while living in my new condo in another state. I never thought that since vacating the PA home in June it would sit without an offer until now. It is a beautiful home in excellent condition in the "Pharmaceutical Corridor" where there are jobs. What is going on here? I am baffled and begin to wonder if my continuing to pay on this home is a mistake. I have already paid well over $100,000 between the 20% down payment, upgrades and mortgage payments over 2 years. I am beginning to think that lowering the price more may not result in selling the house. What would you do if you were me?

I feel bad for a lot of these people. They don't even realize how much they don't know. They SOOOoooo want the dream of owning their own home they'll do anything. Between my wife and I we were making around $160/yr this year when I moved to a new city. Between us we had well above 100k avail to us as down payment and 750+ credit each. We talk to bankers and real estate agents and they kept pointing us at $450k plus homes, and we kept telling them we want $150k-200k (we knew that would creep up). We finally bought a house that was a BARGAIN at $196k with seller paying all closing. We did that so that if one of us lost a job we'd be fine on 1 income. While times were solid early in the year I paid off my car so we have no car payments. Guess what ??? The company that hired me and payed my relocation eliminated my department, all of us, gone. Two weeks later my wife was let go also (6month pregnant with our first I might add .... very dubious) any how, going with a house well within our means, having our cars payed off and having very little outside debt has allowed us to go for almost 6 months still looking for job and the wolf doesn't have our address yet much less come knocking. We're still looking for good solid jobs in our fields and it all starts with being educated and making smart choices. As many here have posted, let's be honest, the banker, the broker, the real estate agent all face the same bills and pressure we all do to perform and make money. That's not to say that every one of them is out to fleece, but at the same time they are going to act in their own interest and it has to be buyer beware and take responsibility for your choices. You look at this situation and it's a sub prime mortage, $40k ???? in closing ? (sketchy), variable rate ? To wit, it becomes clear to me that this poor women clearly needed guidance she wasn't getting, and the only answer to that is education, education, education. Then if someone makes unwise decisions, as bad as you may feel for them, they need to answer to those choices.