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Walk away at this point? - Page 3

post #41 of 91
Quote:
Originally Posted by APToddlerMama View Post



I don't care that the law doesn't view breaking a contract in a moral sense.  When you agree to pay money back to someone, even if that someone is a bank, it is unethical to fail to do so when you have the means to do so.  OP--from your second post, it looks like you might just be delaying the inevitable and I am withholding judgement on your situation entirely.  Perhaps you don't have the means to do so.  Seems like a sticky situation that only you can judge.  But, I do want to correct the idea Rani and Fuamami and ShellyD that because it is a bank, you don't have an ethical obligation to pay them back.


Sorry, just had to come back and nitpick this a little bit.

 

The law does not consider this unethical because it is NOT unethical to break a contract. A contract is just that - an agreement that you will do certain things, and the other party will do certain things. Included in the contract are certain things you and other party will be able to do if you do not perform. Repercussions. But really, it is not unethical, or immoral. I used to think like that, too, but now I've seen the light!

 

Think of it this way, say you decided to get a cell phone, and you sign a two year contract so you can get a free Blackberry. Then you notice that you never use the phone, and you realize that it's a big waste of money and that since your phone bill is $80/month, you would be way better off getting out of the contract rather than continuing to pay for two years, even though you have to pony up $200 to get out of the contract. Do you think that's unethical or immoral? The situation the OP is in is no different. She can break her contract, and if the bank chooses to do so, they can sue her.

 

The reason this bothers me so much is that I agree that it was both consumers and bankers who screwed up royally in the housing bubble, but only the bankers have really gotten bailed out. By the taxpayers. That's corruption.

post #42 of 91
Quote:
Originally Posted by Fuamami View Post

Sorry, just had to come back and nitpick this a little bit.

 

The law does not consider this unethical because it is NOT unethical to break a contract. A contract is just that - an agreement that you will do certain things, and the other party will do certain things. Included in the contract are certain things you and other party will be able to do if you do not perform. Repercussions. But really, it is not unethical, or immoral. I used to think like that, too, but now I've seen the light!

 

Think of it this way, say you decided to get a cell phone, and you sign a two year contract so you can get a free Blackberry. Then you notice that you never use the phone, and you realize that it's a big waste of money and that since your phone bill is $80/month, you would be way better off getting out of the contract rather than continuing to pay for two years, even though you have to pony up $200 to get out of the contract. Do you think that's unethical or immoral? The situation the OP is in is no different. She can break her contract, and if the bank chooses to do so, they can sue her.

 

The reason this bothers me so much is that I agree that it was both consumers and bankers who screwed up royally in the housing bubble, but only the bankers have really gotten bailed out. By the taxpayers. That's corruption.



Back to CrunchyClark's statement "patently ridiculous." Sorry.  None of your arguments make any sense, but if they make you feel better about your choices, I guess they're serving their purpose. 

 

Bolded A... It isn't against the law to cheat on my husband, but it would be unethical.  The law isn't about what is and isn't ethical. 

 

Bolded B-- You didn't borrow money for from anyone for your blackberry.   The contract you signed allowed you the "out" by paying the termination fee.  Both you and the cell phone company agreed to the same terms.  When you buy a house, you borrow REAL money that you agree to pay back.  The cell phone reasoning is flawed.  You could use than in a rent comparison with a broken lease clause but it makes no sense how you described. 

 

Bolded C-- Really?  Homeowners didn't get bailed out?  Well plenty bailed themselves out by foreclosing.  And who paid for that?  Me and everyone else whose housing value tanked (and in my case we took an 80k hit) due to lots of unethical behavior on the parts of homeowners and banks.  And of course some unfortunate people who lost their jobs, etc.

 

I have no more to add to this thread though.  It is clear that there are plenty of people who will do whatever suits them and justify their behavior later on to make themselves feel warm and fuzzy.  Sorry, but if it walks like a duck and quacks like a duck, its a duck.  Those who have convinced themselves that walking away is okay despite having the means to pay are disillusioned. 

 

post #43 of 91


 

Quote:
Originally Posted by Fuamami View Post




Sorry, just had to come back and nitpick this a little bit.

 

The law does not consider this unethical because it is NOT unethical to break a contract. A contract is just that - an agreement that you will do certain things, and the other party will do certain things. Included in the contract are certain things you and other party will be able to do if you do not perform. Repercussions. But really, it is not unethical, or immoral. I used to think like that, too, but now I've seen the light!

 

Think of it this way, say you decided to get a cell phone, and you sign a two year contract so you can get a free Blackberry. Then you notice that you never use the phone, and you realize that it's a big waste of money and that since your phone bill is $80/month, you would be way better off getting out of the contract rather than continuing to pay for two years, even though you have to pony up $200 to get out of the contract. Do you think that's unethical or immoral? The situation the OP is in is no different. She can break her contract, and if the bank chooses to do so, they can sue her.

 

The reason this bothers me so much is that I agree that it was both consumers and bankers who screwed up royally in the housing bubble, but only the bankers have really gotten bailed out. By the taxpayers. That's corruption.


 

This argument doesn't really work.

 

In the cell phone example you are paying the agreed upon penalty to legally terminate the contract. 


In the walking away from a mortgage example you are illegally breaking a contract without paying the agreed upon penalty and basically saying "sue me" which means the injured party needs to wait, pay legal fees and gamble on the court system to receive what is legally theirs.


Having to recently go through this because of someone breaking a legal contract I can say it is a horrible thing to do to someone.  Yes, you can sue but that takes a lot of time, causes a lot of stress and costs a LOT of money.  And people who break contracts ILLEGALLY realize what a pain it is to sue them.  And what a bigger problem it can be to collect on any monies awarded by the courts.

 

post #44 of 91
Thread Starter 

OP here.  We had 2 people breach their contract with us to buy the house for "personal reasons".  We had signed contracts both times.  We had deposits.  Inspections were done & signed off on.  We had our offer accepted on a new house & were packing up.  There was absolutely nothing we could do about it-you can't even keep the "good faith" deposit money.  I can't worry about the morality of a contract with Chase any longer.

 

I am actually "walking away" from my own thread.  This has been the most difficult year of my life, has taken it's toll on our marriage, on our health and we are putting an end to it before it takes it's toll on our children.  I can only pray the house sells fast & the damage done is minimal.  We did all we could...it's out of our hands now.

post #45 of 91


OP, I'm very sorry you are dealing with this situation and that the rest of us highjacked your thread a bit.  I hope you can find a solution that works for your family.

 

Quote:
Originally Posted by ellairiesmom View Post

There was absolutely nothing we could do about it-you can't even keep the "good faith" deposit money.



Unless it was for a cause allowable by the contract any earnest money should have been forfeited to you.

post #46 of 91
Thread Starter 
Quote:

Unless it was for a cause allowable by the contract any earnest money should have been forfeited to you.

Actually, that's a fallacy.  At least in NJ it is...our Real Estate Attorney explained it to me & I can't recall all the details as to the why, but the basic gist was that if we tried to keep a deposit (they were clear breaches of the contract too) we would get served papers pretty quickly ordering us to release the funds from escrow. 

 

Thank you for the kind words though ChristyMarie. :)  I appreciate it.

I don't feel the thread was hijacked or anything crazy...I just think that every single person is just that...a person...with a story of how they got where they are.  There is no "everyone" or "people did this".  No one wants to have to get to this point.  There is so much more going on in this country than people realize & it goes waaaaay back.  We didn't just get into this situation in the past 4 years because a bunch of folks stopped paying their mortgages.  Recessions & unemployment rates like this actually get started decades before the low hits.  There are so many pieces to the puzzle & such questionable behavior on Wall Street & from the government that also goes back.  It's just not black/white or simple.

post #47 of 91



 

Quote:
Originally Posted by ellairiesmom View Post



Actually, that's a fallacy.  At least in NJ it is...our Real Estate Attorney explained it to me & I can't recall all the details as to the why, but the basic gist was that if we tried to keep a deposit (they were clear breaches of the contract too) we would get served papers pretty quickly ordering us to release the funds from escrow. 

 

 

 

Ok, so that must be a law that varies by state.  Here earnest money is forfeited unless terminated for cause per the contract on residential properties.  Or, sometimes it is written that it is forfeited by a certain date if no action is completed but that is usually commercial contracts.


WTF is the point of earnest money if they don't lose it?  That just makes no sense.  (not asking you, asking the people who made that law)

 

I agree that it is not a black and white issue but that fault certainly lies with a variety of parties.  Not just the banks, not just the mortgage brokers and not just the home buyers but many people within those categories behaved poorly and contributed to this mess.  Oh, and let us not forget the "appraisers" who were churning fees to over-value homes.

post #48 of 91
Thread Starter 

And in our specific case, Home Inspectors who are in the pockets of major Brokers & receive kickbacks to not squash deals with their findings.  We found out 2 years later our specific Inspector was accused of doing this & let go.  He was a part of a major inspection franchise in our area & not just a referral from our agent.  Our 1st 2 years in the home we dumped $20k in for major repairs that were somehow missed during the inspection.  That $20k could have kept us paying the mortgage awhile.
 

 

post #49 of 91

OP-- I hope you understand that the comments in the second half of this thread are not aimed at you.  I did mention in an earlier post that I have no judgement of you or your family and can see you're in a tough spot where only you can make the call on what is right to do.  Best of luck. 

post #50 of 91
Thread Starter 

Thx APToddlerMama!

Maybe I could ask everyone on this thread, & everyone who has popped in to read it, to send positive vibes for a quick final, once & for all sale our way! 

 

I am sending those vibes out to anyone else in a similar situation or worse...

 

I will certainly let ya all know what happens. 

post #51 of 91

Of course OP!  Many good vibes your way!  Are you going with the bonus for the buyer's agent?  This did really help us sell our house.  Good luck

post #52 of 91
Thread Starter 

Thx APToddlerMama!  Yes-we are doing a $1500 bonus for the agent, but doing it as a Gift Card so they don't have to split it with anyone else or their broker.  And then the standard 2.5% commision for the buyer's agent.  Should we go higher on the bonus????  What did you go with it? 

post #53 of 91
Quote:
Originally Posted by ellairiesmom View Post

 

 

Thank you for the kind words though ChristyMarie. :)  I appreciate it.

I don't feel the thread was hijacked or anything crazy...I just think that every single person is just that...a person...with a story of how they got where they are.  There is no "everyone" or "people did this".  No one wants to have to get to this point.  There is so much more going on in this country than people realize & it goes wa aaaay back.  We didn't just get into this situation in the past 4 years because a bunch of folks stopped paying their mortgages.  Recessions & unemployment rates like this actually get started decades before the low hits.  There are so many pieces to the puzzle & such questionable behavior on Wall Street & from the government that also goes back.  It's just not black/white or simple.


I totally agree with this, but it is also continuing to unravel and you (both individual and the collective you) need to consider that it could easily get it gets better.  I would also think long and hard about having a way for both you and your DH and your FIL to exit this agreement gracefully.  Unless your DH is FIL sole heir and executor to his estate this could be a serious  PITA if FIL were to die.  Joint tenency between all three of you might help if other heirs don't understand that you have money in this deal too there could be hard feelings. 
 

 

post #54 of 91

I wouldn't take renting off the table, simply because there are several colleges near you. You don't have to rent to wild and partying 20 year olds. I also live in a college town and there are plenty of non-traditional age graduate students with families who rent homes. Many are living on scholarships/stipends/loans so their money is actually more dependable than a paycheck!

post #55 of 91

I know how hard the judgement is. We ended up doing a short sale last year on a house I LOVED but couldn't keep, and the guilt and the percieved judgement (some perceived, some actual) just ate at me so badly. I wanted to scream every time someone talked about how we were "walking away scott free" when in actuality, we walked away with terrible credit and moved into the dumpiest rental possible, that actually ended up being mold-infested and we lost most of our belongings to the fast-spreading mold in just six months. It sure didn't feel scott free to me!

 

Anyway, just wanted to let you know that someone else is here, totally non-judgemental about your situation. Do what you have to do.

 

And also, in response to this:

 

 

Quote:

In the cell phone example you are paying the agreed

upon penalty to legally terminate the contract. 


In the walking away from a mortgage example you are illegally breaking a contract without paying the agreed upon penalty and basically saying "sue me" which means the injured party needs to wait, pay legal fees and gamble on the court system to receive what is legally theirs. 

 

 

The bank also gets the house, which is in the contract. In the event that you do not pay as promise, they take your house. To me, that's the same as a cell phone contract. If you cancel early, you pay the fee.

 

 

post #56 of 91
Quote:
Originally Posted by PenelopeJune View Post

 

The bank also gets the house, which is in the contract. In the event that you do not pay as promise, they take your house. To me, that's the same as a cell phone contract. If you cancel early, you pay the fee.


It is not the same especially in this market when many homes have DECREASED substantially in value.  If someone bought a house for 250K and the house was only worth 150k when that person walked away, the bank will be at a 100k loss. The person walking away from the home will have failed to pay the bank the 100K that they owed them.  Taking the house back is a way for the bank to recover a portion, frequently a small portion of what they are owed.  PenelopeJune--I don't know your situation and if you had to walk away because you didn't have the means to pay, I have zero judgement on that and really feel for you being in that situation.  Please don't provide justification though for those who do have the means to pay.  The cell phone and house scenarios are completely different and one shouldn't even try to compare.

 

OP--again please do not take that as a judgement on you either, because like I said, your situation is sticky and I have no opinion.  As far as the bonus, I can't remember exactly what we did.  I remember discussing anywhere from 1 to 3K, and I think we settled on 1500$ as well.  The gift card idea is fabulous!  Provides that much more incentive since there is no splitting the money up.  Our situation worked out somewhat strangely because our selling agent actually ended up being a dual agent and the buyer's agent for the people who bought our house.  So....she got the bonus but graciously gave us a $500 gift at closing which was to pay for the homeowner's warranty.  So, we ended up really with a 1k bonus.  Good luck!  The bonus definitely got us more showings and created more competition between buying agents. 
 

 

post #57 of 91
Quote:
Originally Posted by APToddlerMama View Post





Back to CrunchyClark's statement "patently ridiculous." Sorry.  None of your arguments make any sense, but if they make you feel better about your choices, I guess they're serving their purpose. 

 

Bolded A... It isn't against the law to cheat on my husband, but it would be unethical.  The law isn't about what is and isn't ethical. 

 

Bolded B-- You didn't borrow money for from anyone for your blackberry.   The contract you signed allowed you the "out" by paying the termination fee.  Both you and the cell phone company agreed to the same terms.  When you buy a house, you borrow REAL money that you agree to pay back.  The cell phone reasoning is flawed.  You could use than in a rent comparison with a broken lease clause but it makes no sense how you described. 

 

Bolded C-- Really?  Homeowners didn't get bailed out?  Well plenty bailed themselves out by foreclosing.  And who paid for that?  Me and everyone else whose housing value tanked (and in my case we took an 80k hit) due to lots of unethical behavior on the parts of homeowners and banks.  And of course some unfortunate people who lost their jobs, etc.

 

I have no more to add to this thread though.  It is clear that there are plenty of people who will do whatever suits them and justify their behavior later on to make themselves feel warm and fuzzy.  Sorry, but if it walks like a duck and quacks like a duck, its a duck.  Those who have convinced themselves that walking away is okay despite having the means to pay are disillusioned. 

 


Whoa! I don't know if you're here anymore, but I just wanted to say that you need to dig A LOT deeper if you think that you "lost" 80K of value in your home because of people walking away from their mortgages. The reason you lost that equity is because you bought/refinanced in a bubble, and now no one is willing to pay the inflated price for your home.

 

And when you get your free Blackberry, as in my cell phone example, you are borrowing the money from the cell phone company. You are agreeing to pay the bill for two years and they are spreading the cost of the phone out over that time. Why do you think they check your credit when you sign up for a cell phone contract? Why do you think they have pay-as-you-go plans for people with bad credit? If you do not pay and break your contract with the cell phone company, you are breaking a contract in the exact same way as walking away from your mortgage. If you decide not to pay the $200, the cell phone company then has the option of taking you to collections. If you don't pay your mortgage, your lender also has TONS of options. They can retain a judgement against you for up to 20 years in most states, they can sue you for all your assets, they can garnish your wages, etc. This is the recourse they have, and this is why contract law is not considered a moral issue. We no longer have debtors prison because each party in the contract has recourse. If you cheat on your husband, he can't just ask you to pony up $5000 and that will make him whole again. 

 

Furthermore, this is also why lenders have the responsibility to investigate who they are lending to, and decide whether or not they are a good risk. As you may have noticed, they did a terrible job at that. They created ridiculous mortgage products that made no sense in the long term simply so they could quickly repackage them and sell them on the bond market. If I had billions of dollars to lend, and I did so irresponsibly, I wouldn't try to blame it on people who decided that they had no reason to continue to pay a mortgage for a home worth $100K less than the mortgage was for, who had put no money down. I would think, "Why on earth did I lend them that money?" 

 

FWIW, I did not walk away from my mortgage. My dh and I put around $40k down and another $15K into repairs on a 30yr fixed mortgage, and then eight months later his industry almost completely disappeared from our area. After a year of scrambling every which way we could to make our mortgage, including paying for it with credit cards, we decided to short sell our house. We ended up selling it for almost exactly $200K less than we had bought it for, and it was one of the cheaper homes in the area when we bought.


 

Quote:
Originally Posted by ChristyMarie View Post


 


 

This argument doesn't really work.

 

In the cell phone example you are paying the agreed upon penalty to legally terminate the contract. 


In the walking away from a mortgage example you are illegally breaking a contract without paying the agreed upon penalty and basically saying "sue me" which means the injured party needs to wait, pay legal fees and gamble on the court system to receive what is legally theirs.


Having to recently go through this because of someone breaking a legal contract I can say it is a horrible thing to do to someone.  Yes, you can sue but that takes a lot of time, causes a lot of stress and costs a LOT of money.  And people who break contracts ILLEGALLY realize what a pain it is to sue them.  And what a bigger problem it can be to collect on any monies awarded by the courts.

 


I'm sorry someone broke a contract with you. It is definitely the risk you incur, however, when you decide to enter into a contract with someone. 

 

post #58 of 91
Quote:
Originally Posted by Fuamami View Post

Whoa! I don't know if you're here anymore, but I just wanted to say that you need to dig A LOT deeper if you think that you "lost" 80K of value in your home because of people walking away from their mortgages. The reason you lost that equity is because you bought/refinanced in a bubble, and now no one is willing to pay the inflated price for your home.

 

And when you get your free Blackberry, as in my cell phone example, you are borrowing the money from the cell phone company. You are agreeing to pay the bill for two years and they are spreading the cost of the phone out over that time. Why do you think they check your credit when you sign up for a cell phone contract? Why do you think they have pay-as-you-go plans for people with bad credit? If you do not pay and break your contract with the cell phone company, you are breaking a contract in the exact same way as walking away from your mortgage. If you decide not to pay the $200, the cell phone company then has the option of taking you to collections. If you don't pay your mortgage, your lender also has TONS of options. They can retain a judgement against you for up to 20 years in most states, they can sue you for all your assets, they can garnish your wages, etc. This is the recourse they have, and this is why contract law is not considered a moral issue. We no longer have debtors prison because each party in the contract has recourse. If you cheat on your husband, he can't just ask you to pony up $5000 and that will make him whole again. 

 

Furthermore, this is also why lenders have the responsibility to investigate who they are lending to, and decide whether or not they are a good risk. As you may have noticed, they did a terrible job at that. They created ridiculous mortgage products that made no sense in the long term simply so they could quickly repackage them and sell them on the bond market. If I had billions of dollars to lend, and I did so irresponsibly, I wouldn't try to blame it on people who decided that they had no reason to continue to pay a mortgage for a home worth $100K less than the mortgage was for, who had put no money down. I would think, "Why on earth did I lend them that money?" 

 

FWIW, I did not walk away from my mortgage. My dh and I put around $40k down and another $15K into repairs on a 30yr fixed mortgage, and then eight months later his industry almost completely disappeared from our area. After a year of scrambling every which way we could to make our mortgage, including paying for it with credit cards, we decided to short sell our house. We ended up selling it for almost exactly $200K less than we had bought it for, and it was one of the cheaper homes in the area when we bought.


I'm sorry someone broke a contract with you. It is definitely the risk you incur, however, when you decide to enter into a contract with someone. 

 


Totally simplistic to say whoa whoa money was lost because we bought in a bubble.  Are you familiar with why there was a "bubble" and why it burst?  I'm not going to go through the same explanations a second time on the reasons we're in a housing crisis in this country, but yes, banks should be taking a lot of blame, as should people who had the means who chose to walk away.  A short sale is really not different than walking away if a person has the means to continuing paying and hasn't suffered a job loss or some other emergency situation.  You still aren't paying the money back.  Money you promised to pay.  And the cell phone...you don't borrow any money.  I don't know what you're talking about.  Also, unlike a mortgage contract, your blackberry contract allows you an "out".  Very few mortgage contracts do the same.  Your original points that I and others commented on the first time weren't comparing apples to apples and also didn't make sense.  I don't really understand why you're giving it another try at arguing the same points that didn't make sense the first time.  Except that now that I write that, I remember again... people will justify whatever they have to in order to make themselves feel decent about a situation.  I'm out of here.  I'm not going to go for round three of the same arguments that are totally not valid and serve only to allow people to make an unethical decision and walk away without guilt. 
 

 

post #59 of 91

Sorry, I didn't mean to offend you and it sounds like you are. But I am also fairly insulted by your assertion that the only reason for my beliefs is that I'm trying to justify my actions. We had practically no income for almost a year, making our mortgage just wasn't feasible. And then, when we realized it would take at least 10 years to get to the point when we were no longer underwater, we made the only realistic choice to short sell our house. Sure, we made some mistakes, took some risks, same as many other Americans, including you, it sounds like. But by the time people were walking away from their houses en masse, the damage was already done.

 

And I don't quite understand what you're saying about how a mortgage doesn't allow an "out". Have you ever read your actual note? It should spell out pretty clearly what the bank will do if you choose to stop paying. I mean, this is the reason mortgages have been historically considered stable investments, for both the lender and the borrower. Unlike a car or a cell phone, the house will still be there if the borrower stops paying, and you can just take possession of it and sell it again.

post #60 of 91
Thread Starter 


 

Quote:
Originally Posted by mnnice View Post




I totally agree with this, but it is also continuing to unravel and you (both individual and the collective you) need to consider that it could easily get it gets better.  I would also think long and hard about having a way for both you and your DH and your FIL to exit this agreement gracefully.  Unless your DH is FIL sole heir and executor to his estate this could be a serious  PITA if FIL were to die.  Joint tenency between all three of you might help if other heirs don't understand that you have money in this deal too there could be hard feelings. 
 

 


I thought I had mentioned this in my op but it looks like I didn't...ooops!  DH is an only child, his mother deceased.  There isn't anyone else.  DH is his sole bene. 

 

We asked our lawyer to come up with something that would "protect" FIL the best we could & she suggested a triple net lease.  My FIL is of the mindset that we don't need it, but we feel better about having it so he doesn't have to worry about being responsible for anything related to the house. 

 

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