Irresponsible People Ditching Their Mortgages

| January 30, 2008


For those of you who did not see the story on mortgages in last weekend’s 60 Minutes, they revealed America’s first glimpse at a trend that is a serious threat to our economy; people intentionally defaulting on their mortgages.

This except is from Minyanville’s professor Kevin Depew’s Five Things You Need To Know: (my comments inserted)

Last night, CBS’ “60 Minutes” took a look at the “subprime loan crisis.” The following exchange between “60 Minutes” correspondent Steve Kroft and homeowner Stephanie Valdez is a highlight worth examining a bit closer; it’s significant both from an economic and, more importantly, a socionomic point of view.

STEPHANIE VALDEZ: Why pay a $3,200 payment on a 1200-square-foot home? It makes no sense.

[Bruce says: You signed up for it you greedy yuppie! So your flip did not work out, you are going to ramp up the damage by not living up to your obligations?]

STEVE KROFT: That’s what you agreed to do when you bought the house.

STEPHANIE VALDEZ: Fine. If the value is going up. But we’re not going anywhere. The price or the value is going down. It makes no sense because we will never be able to refinance and get a lower payment. There’s no way.

[Bruce says: So you only want to pay for your house if it’s value is going up, where was that in the mortgage papers?]

STEVE KROFT: You’re saying, essentially, that you’re going to stop making payments on it? You’re just gonna let it go into foreclosure?

STEPHANIE VALDEZ: You know, that’s the only advice we’ve gotten so far is walk away from the home. We don’t want to do that to our credit. Why can’t our mortgage company work with us?

[Bruce says: I hope your parents are not around to see you acting this way, I would trust that you were raised to a higher standard than this!]

I was amazed when I saw this, this is the full fruition of the “me” generation once again saying “screw everyone else, I am going to take care of me“.

What these selfish child-people fail to understand that the only reason most of what we enjoy exists is because there is an element of trust inherent in business transactions. There have always been deadbeats and scumbags around, but there is a real threat that many thousands of people who took out stupid loans are going to walk away en-masse. The implications of this would be an aggravated break down in the credit markets for everyone, including honest people.

If seeing these adult-brats proclaim their selfish irresponsibility on national TV was not bad enough, it seems that some clever folks have set up a business specifically targeted to helping people walk away from their obligations.

They call themselves “You Walk Away“:


If you are facing or considering foreclosure, you’re not alone.

Are you stressed out about your mortgage payments?
Do you have little or no equity in your home?
Have you had trouble trying to sell your house?
Is your home sinking under the waves of the real estate crash?
What if you could live payment free for up to 8 months or more and walk away without owing a penny?
Unshackle yourself today from a losing investment and use our proven method to Walk Away.

If you QUALIFY for our plan:

Your lender WILL NOT be able to call you in attempt to collect!
Your lender WILL NOT be able to collect any deficiency or loss they may receive by you walking away!
You WILL be able to stay in your home for up to 8 months or more without having to pay anything to your lender!
You CAN have the foreclosure REMOVED from your credit!

It’s important to act now before it’s too late!

Let us help you.

Mish Shedlock comments on the details of this service:

I spoke with John Maddux a “senior advocate” with You Walk Away (YWA) about the business. As one might expect it is booming. For $995 one receives a half hour of legal counsel where individual strategies are mapped out and all the laws pertaining to recourse vs. non-recourse loans as well as judicial procedures are explained to the customer. YWA also files the necessary legal papers to stop mortgage companies from calling and informs you immediately of how many days you will be able to stay in the house for free. Should the lender take longer to process the documents, YWA will keep you informed of any extra time.

With the amount of money at stake, the fee seems reasonable for the services provided.

Maddux informed me that YWA is currently operating in the state of California only, but Nevada and Florida will soon be coming online. Eventually they expect to be nationwide.

The financial trouble that is the normal outcome from the imprudent housing, credit and asset bubbles is going to be compounded if everyone who owes more today than what their “investment” is worth intentionally default on their mortgages. It could wreck for a generation access to credit to purchase houses, and prolong the necessary downturn.

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Category: Credit Backlash, Economics, Main, Recession Watch

About the Author ()

Bruce Henderson is a former Marine who focuses custom data mining and visualization technologies on the economy and other disasters.

Comments (5)

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  1. Kaobear says:

    The shame of the whole thing of course is that this will only get worse than it already is.

    You have hundreds, maybe thousands of people doing it now. A few years from now, if something is not done, you have millions of people pretending that they are five and are bored with a toy and let it lie there.

    A shame, an outrage and a disgrace to those of us, (this part being about me), that are still trying to get their first home.

  2. Bruce Henderson says:

    I know how you feel, a whole wide swath of folks would like to own their first home, or move up to a larger size to accommodate children, but are frozen in place while this slow-motion act plays out.

    While you would probably rather move on something, chances are good that you will be rewarded for waiting and saving.

  3. Kaobear says:

    I hate to agree, but there is no other option right now but to wait and see where everything lands, and of course we hope that it isn’t in the bowels of the market.

  4. dianag209 says:

    I would just like to say to anyone who believes they have the right to judge stephanie may want to get to know her first as a person!!!! she is not a yuppie she is just another person in this world trying to deal with forclosure.. so the guy who called her a yuppy truth be told do you know her??? don’t think so!!!! your just another person who judges a book by their cover!!!! real nice… stephanie ignore all the closed minded people in this world they are not worth the waste of your time…

  5. Bruce Henderson says:

    I understand what you are saying, and I am that person. Truth be told I don’t need to know her to understand that she committed to something she could not follow through on. From her words in the media and her actions she seems to have less care about her commitments that what a responsible person should.

    I apologize to all you Yuppies out there if I painted with too broad a brush. I guess I need a better term for folks who have somehow lost sight of responsibility.