Real Estate, Vancouver Washington: Are People Walking Away From Their Mortgage? Yes, But Who??

Well, I've said it before (see related posts below) that for the most part homeowners will attempt to stay in their home. Speculators and investors...now, that's a different story. Well it seems that the Los Angeles Times thinks the same thing.

"...media reports and Internet postings are rife with stories about the trend and a supposed sea change in American attitudes toward debt. But there's a major problem with all this talk about the phenomenon of solvent homeowners "walking away": There doesn't appear to be any hard evidence that it's actually happening.
When pressed for the number of borrowers who could afford their mortgage payments, major banks and lender groups could not produce numbers figures.
Nor could the Mortgage Bankers Assn., the leading trade group for housing lenders. Spokesman John Mechem said he believed that walkaways by homeowners who could afford their payments were "becoming more prevalent." But he said that was based on "anecdotes we're hearing from our members and what we're reading in the newspapers."
Further down in the story it says...
"At Fannie Mae, the government-chartered company that owns or guarantees billions of dollars in home mortgages, Senior Vice President Marianne Sullivan conceded that there was growing "folklore" about residential walkaways but said that the phenomenon was more likely connected to investors than people who live in their homes, or "owner-occupants."" (read full story)

Yes, there are homeowners who are waking away. But is it an epidemic? No, I don't think so and it seems some pretty well informed people think that as well.

Banks could and should begin doing a better job of communicating and working with borrowers. A common story we hear is that the borrower gets in trouble (for whatever reason) calls the bank and gets pushed from cubicle monkey to cubicle monkey before finding someone who can make a decision. By that time several months have passed and fees have accumulated and the snowball just gets bigger.

(By the way - Banks if you want some ideas on things you could do better read my post "Borrowers Walk Away From Home, (Foreclosure, Short Sale, Credit Crisis)" you can also call me and for a small consulting fee I'd be happy to help you out.

Related Posts...

Hat Tip: The Mess That Greenspan Made: Is "walking away" a myth?

Got a question for Scott? Feel free to call him directly at 360.216.1762