Walk Away From Your Mortgage!

[babsbunny]

http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html?partner=rss&emc=rss&src=ig

By ROGER LOWENSTEIN
Published: January 7, 2010
John Courson, president and C.E.O. of the Mortgage Bankers Association, recently told The Wall Street Journal that homeowners who default on their mortgages should think about the “message” they will send to “their family and their kids and their friends.”

[jgraz]

1. I hope this starts a trend.

Along with people challenging their mortgage and getting it declared null and void by the courts.

[HowHasItComeToThis]

12. THEY WILL USE ANY WEAPON THEY HAVE

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7417959

[dixiegrrrrl]

2. Ohhh...peer pressure....ohhhhhh...can't have that, no sirree.

[DesertFlower]

3. i've heard a lot of people

here in arizona have done it.

[dkf]

4. And from your credit cards, car payments and any other loan out there.

What's the difference after all?

[Berry Cool]

5. Here's what to take away from this:

Brent White, a University of Arizona law professor...is surprised that more people haven’t walked. He thinks the desire to avoid shame is a factor, as are overblown fears of harm to credit ratings. Probably, homeowners also labor under a delusion that their homes will quickly return to value. White has argued that the government should stop perpetuating default “scare stories” and, indeed, should encourage borrowers to default when it’s in their economic interest. This would correct a prevailing imbalance: homeowners operate under a “powerful moral constraint” while lenders are busily trying to maximize profits. More important, it might get the system unstuck. If lenders feared an avalanche of strategic defaults, they would have an incentive to renegotiate loan terms. In theory, this could produce a wave of loan modifications — the very goal the Treasury has been pursuing to end the crisis.

Ah, wouldn't it be loverly?

[dugaresa]

6. it may send the right message, think of the Guy Maupassant story "The Necklace"

let us say that someone bought a house in an over priced market and paid $300k for a $75K house.

let us say the market crashes and then the poor folks are stuck paying that higher mortgage, do they allow themselves to be financially ruined because of that or do they walk away and learn a lesson?

the story of "The Necklace" reminds me of folks who just do the right thing and don't question things or aren't honest, perhaps not the best analogy the end result is about the same.

[Goldstein1984]

7. There is no moral or ethical reason to support a corrupt system

designed for the sole purpose of squeezing every last drop of blood from the working class.

As far as the message it sends to our children? That message would clearly be "FREEDOM!"

Ethics???? Have you seen a lot of ethical behavior coming from the economic parasites on Wall Street lately?

[GreenTea]

8. Absolutely!

[bbinacan]

9. When you enter a contract

No matter who you are, the honorable thing to do is complete the agreement.

[LaPera]

10. Get real!

Wake up!

To corporations screwing people in the ass with outright lies, deregulated deceptions & contract distortions all for profit, and then say fuck you, PAY!

As corporations will file bankruptcy and say fuck you at the drop of a hat....taking peoples billion of dollars pensions with them! Again, saying FUCK YOU - WE MAKE THE RULES!!

[DesertFlower]

16. the corporations didn't hold your

hand and force you to sign the contract.

[laughingliberal]

25. Yes and no one forced them to inflate this bubble that came crashing down on the country

We bought in good faith on a conventional loan in 2005. Our house has lost 40% of its value. As for a moral obligation, secured debt is secured by the property. That is the contract we have. Pay the mortgage or surrender the property. End of my 'moral' obligation. Period. It's a bank, not a church.

[girl gone mad]

42. Precisely. And the contract that they wrote says that people can walk..

free and clear after they send in the keys in non-recourse states. In other states, the banks can take the borrowers to court, but it's usually difficult to get much of anything through the system in place. Banks were well aware of the laws when they wrote these contracts. They didn't care because they were slicing and dicing mortgages and selling them as AAA-rated securities to unsuspecting investors. In many cases, banks committed outright fraud to get marginal home buyers into loans.

People who are considering walking away should consult with a lawyer and do what's best for themselves and their family, not what's best for the banks.

[Juche]

48. Did anyone force the financial industry to collapse the economy

Had they not collapsed the economy people wouldn't be nearly as underwater.

The message I'm getting is that the financial industry can make bad and risky decisions that wreck the global economy, then turn around and block regulations designed to prevent them from dragging the global economy into a depression again. Then they can get billions in bailout funds. But anyone who doesn't cater to them and pay them on time each month is cheating and shameful.

You do know many of these industries made mortgages they knew they shouldn't because they knew they'd be profitable? These banks played with fire. They deserve to get burned. The government isn't going to burn them.

Banks which made wise, responsible decisions will not be as badly hurt by this.

[bbinacan]

18. What is so hard about

reading a mortgage contract? The problem is with the buyer.

[proteus_lives]

38. +1

I don't understand why people are calling on others to be cheats and liars.

[LaPera]

46. The problem is with assholes who offer their moral reasoning bullshit onto others!

moralistic fucking phonies! Lying cocksuckers!

[laughingliberal]

75. And the rules only apply to the little guys. nt

[Incitatus]

60. For some people, reading dozens of pages of fine print and fully understanding what it means is hard

Especially when the lender assures them everything will be okay.

There is a difference between being ignorant and taking advantage of the ignorant. Some people here would like to side with the banks and tell the victims tough shit. That's sad.

[rd_kent]

69. So, you have never jumped on a poster here on DU that was ignorant about a subject?

Its okay for you to take advantage of someone ignorant because the ignorant person came here in the first place?

I think the point trying to made here is that if one os THAT ignorant that they cannot read and comprehend a mortgage contract, then perhaps they shouldnt sign a mortgage contract.

Yes, the banks have some responsibility here, no doubt, but so do the people that signed the contracts.

[Incitatus]

72. I'm not saying the borrowers don't have some responsibility, I'm just saying the majority

of the blame for this mess lies with the bankers.

[DesertFlower]

11. i agree. the corporations and banks

are evil, but many people used their houses as "banks". they took equity out when the value was up and now they can't pay the higher mortgage. should they walk away with a free ride? and then there are the adjustable rate mortgages or interest only loans. they'll claim some smooth talking mortgage broker told them they could afford it. well are these people incapable of doing the math?

i know a few people who bought in 2005. now their houses are worth $150,000 (more or less). the market will probably come back up in a few years.

the only time i can see justification for walking away is having to sell, i.e., job loss, job transfer, illness.

flame away.

[laughingliberal]

22. "Should they get a free ride?"

I don't know. Should the banks and finance companies get a free ride. Would have helped the real economy a lot more to use some of the bail out money to pay down principle on some of the loans where people are upside down. Out in these parts most people are upside down with or without home equity loans. We bought in 2005 with a conventional loan 30 year fixed, verified income, down payment, FICO scores of over 800. Our house has lost 40% of its value. Our state is #1 in negative equity nationwide. We gave the banks money to modify loans. They are doing 'temporary modifications,' getting paid out of our tax dollars to do so, and foreclosing and selling off the houses anyway. It is called double dipping. Paying down principle for homeowners who are upside down and keeping more of them in their homes would have benefited the entire economy. No one is benefiting from a 7 month and growing inventory of homes sitting on the market. It is affecting every sector and every community. Now counties and cities who are already going broke are seeing decreased revenue from property taxes. The value of homes going down=lower property taxes. That means less for schools, fire dept, police, etc...Our governor announced a new round of cuts to education funding today. Giving the money to the banks has done nothing to benefit anyone but the banks.

But the persistence in the American psyche of the idea that someone, somewhere who is less deserving might walk away with something I didn't get is astounding. Give the crooked markets that were responsible for inflating this bubble a trillion or more of the tax money you paid, demand nothing from them, but call foul on some (obviously disreputable) family who might get help to keep their home. And refuse to see that the impact of all the foreclosures will, eventually, affect everyone in some way or other.

[susanr516]

71. +1000 nt

[Frank Booth]

61. But how could they have bought that new Hummer if they didn't take out the equity??

Or how could they have built that new pool??

Isn't every American entitled to a house, a pool, and a Hummer?

[TheDebbieDee]

14. BUT, when you walk away you're completing the agreement

by giving the mortgage company the house!

Vacating the premises and returning access of the house to the mortgage company if you cannot pay for it is also a standard clause in every mortgage contract.

[DesertFlower]

15. what if you've taken a lot of money

out of the house? i know a guy who put about $70,000 down on his $400,000 house. the value went up to close to a million. he started taking equity out -- $100,000 here $80,000 there, etc. some of it was used to open a restaurant with his in-laws. after about 8 months he and the in-laws disagreed on how the business should be run. so he walked away. didn't get bought out. just left it. by this time his mortgage payment was up to $4,700 a month. he stopped paying and the bank foreclosed.

bottom line. he didn't lose any money. he made money with all the equity loans.

[laughingliberal]

26. I would assume the financial institutions knew the risk when they loaned the money?

Or as a post upthread remarked, no one forced their hand to sign the contract, either.

[Ignis]

32. Risk?! Pshaw.

The market can only go up, up, up! :eyes:

[bbinacan]

20. Good point.

If you're able to pay, you should. If not, foreclosure and don't blame anyone but the buyer.

[Maru Kitteh]

63. flawed

If I invested in your bank, I can't blame the buyer, I have to blame your shitty, short-sighted decisions.


See? Plenty of blame to go around.


He who holds the gold makes the rules, and the gold-holders got fuckin' greedy. They are to blame for their own woes, and many of our loved ones as well.

[Raven]

17. I agree. You made the deal and got the money. Unless there was

fraud or misrepresentation, you should honor the deal...after all, you got the money. If there was fraud, there are ways to deal with that. If everybody walked away from their contractual obligations, we'd be in deep shit and nobody would get a loan...on anything...and, basically, society would fall apart.

[bbinacan]

19. I'm in agreement. n/t

[Mr Generic Other]

23. society is falling apart already.

those who walk away from a mortgage are just more ready or able to accept that reality.
sorry.

[laughingliberal]

29. Here's the deal most people have

The debt is secured by the property. Pay the note or surrender the property. Perfectly legal. Society has fallen apart as more laws got passed allowing corporations to avoid any responsibility to society. Just because you're a working stiff doesn't mean I'm going to be beat over the head and held to a higher ethical and moral standard than the institutions that have drained $5 trillion dollars from our economy in the last decade.

America-welfare for the fat cats, personal responsibility for the poor and working classes. No more!

[Mr Generic Other]

43. absolutely.

end corporate welfare. we need to cut the lifeline to those who would suck our blood.

[tammywammy]

21. Agreed

If you cannot afford it or there was fraud involved that's different.

Hell, I'm in the middle of refinancing my house. I know what the interest rate is going to be. I told her what kind/length of contract I wanted, etc. I don't get it. When I first bought my house it's not like someone was holding a gun to my head forcing me to buy it. :shrug:

[slackmaster]

24. When you stop making mortgage payments, parts of the contract that are not normally exercised...

...take effect.

When you default on your loan you are NOT breaking the contract, because the lender's recourse is clearly spelled out.

[Incitatus]

28. Didn't the banks know many people wouldn't be able to fulfull their end of the contract?

On adjustable rate mortgages, the borrower could make the initial payments, but when the rate increased it was impossible. They didn't care because they knew the were going to sell the mortgages to someone else. It does seem that many people were duped. They weren't financially literate enough to understand all the fine print in the stack of papers they signed and relied on the lender to interpret the contract. It's as much the fault of the lender as the borrower. Even more since they knew exactly what they were doing and the borrowers thought they knew what they were doing.

I have less sympathy for those who refinanced at fixed rates just because the value of their house went up and they wanted the money.

[anonymous171]

33. Banks and bankers aren't moral agents and have no moral rights. nt

[girl gone mad]

36. If it's a non-recourse loan, then walking away is written into the contract.

Do you think these banks didn't know what the contracts they wrote said?

[laughingliberal]

49. Exactly! And when that market was red hot they were A-Ok

with people who were forced to default when their ARM's went up or what not. They had collected payments from homeowners who were little more than placeholders for them. If they defaulted, eh, the house was now worth 50% more than it was 3 years ago. Foreclose, sell at a profit, all good for them. I have no sympathy whatsoever for the banks and finance companies.

[sendero]

39. The agreement..

... is that you will make the payments or the mortgagor gets the property back.

In no way is walking away from a underwater deal "immoral", banks do it ALL THE TIME.

[PurityOfEssence]

45. Well it's nice to hear SOMEONE with a concept of responsibility

It's one's responsibility to have some awareness of what one's doing when agreeing to a contract. If everyone walked away from things that became merely inconvenient, society itself would crash around our ears.

As pluralists or Liberals or Progressives, we should have some fucking sense of honor about living up to our bargains; the concept that we're all in this together shouldn't be as alien as it is to a Libertarian or a Reactionary.

I remember when Mike Gravel gloried in his stiffing credit card companies, regaling the audience that he wished he could have stuck 'em with even more of a loss. There was nary a whiff of disagreement with this sentiment around here, merely the guffawing at the wicked lenders and self-righteous outrage and character assassination for anyone who brought up the unethical nature of this kind of thing.

These actions have direct bearing on our society; losses drive (or are used as excuses to drive) interest rates higher.

The thought of this becoming a scofflaw society is very real for me, and it's quite depressing. Those who grant themselves underclass victimhood rights to do as they damn well please bring dishonor to the rest of us on the left and fuel the right's dismissal of us as shiftless and duplicitous.

One should fulfill one's promises unless it's simply impossible to do so, and when that's the case, one should default with reluctance, not glee or vengeance. As members of a communal world, we need others to accept the concept of not entering into contracts unless they fully understand them and intend to abide by them to the best of their ability. The fact that the lender may be a rotter is the flimsiest of excuses for weaseling out of an agreement when it becomes distasteful. Bailing out due to necessity is one thing, but to do so out of convenience is quite another, and the definition of "necessity" should be fairly stringent. THIS AFFECTS US ALL, NOT JUST THE EVIL LENDERS.

Thanks for being a voice of decency, dammit.

[DesertFlower]

56. i agree. nt

[tranche]

50. The "contract" in these cases is payment or the house.

I think people are saying, "you can have the damn house", and that's after making what I presume are a number of payments already.

[Bluebear]

59. Corporations make the business decision to reneige all the time.

It's only now that individuals and families are making similar business decisions for their own financial future.

[femrap]

13. And that message would be....

'I'm not your sucker, a-hole.'

[slackmaster]

27. I think the real message is more like this...

I made a mistake by paying too much for the house (or assuming that it would continue to appreciate in value, or didn't fully understand the loan agreement, or whatever other bad assumption you made).

I made a business decision to cut my losses and walk away from the house.

[Ignis]

34. "a business decision to cut my losses"

Precisely. The moralistic finger-waggling over "breaking a contract" is out of place here.

[femrap]

44. Those who bought in the 'herd

mentality' of 2005 and 2006 thought they were going to make money. People thought real estate couldn't possibly decline in value.

Did you forget that? Or are you someone who can foresee the future? If so, why aren't you at the OTB?

You sound as if you have never made a mistake...you simply judge those who do.

I don't have a horse in this race...but I do so hate seeing Corporate salesmen screwing the elderly, the poor and the naive.

But you are ever so better than them.

[slackmaster]

66. Anyone who buys a house for any reason other than as a place to live gets no sympathy from me

Those who bought in the 'herd mentality' of 2005 and 2006 thought they were going to make money. People thought real estate couldn't possibly decline in value

:nopity:

That's called greed.

I bought my house for two reasons: To have a better place to live, and not to have a landlord holding a sword of Damocles over my head.

You sound as if you have never made a mistake...you simply judge those who do.

I've made plenty of mistakes. I take responsibility from them and learn from them.

I don't have a horse in this race...but I do so hate seeing Corporate salesmen screwing the elderly, the poor and the naive.

But you are ever so better than them.

You're right. I am better than them.

[Name removed]

68. Deleted message

Message removed by moderator. Click here to review the message board rules.

[anonymous171]

30. When bankers get a bailout it's good policy. When the working man tries to bail on the banks

it's wrong and immoral. Socialism for the rich, capitalism for everyone else.

[jotsy]

57. TYVM, I scrolled so far before finding a comment I could identify with.

The same banks who hold the mortgage market in their greedy paws likely financed corporations moving operations and the need for labor off shore.

There's this old episode of 'Little House' I find myself thinking of a lot lately. Laura and Almanzo had purchased land to farm adjacent to the guy who sold it to them. The seller then proceeded to damn the water way, knowing the inability to farm the land would cause the young couple to default on their loan. Yes, that cheesy melodrama tv show from the 70's, but I don't see what's happening across the American landscape as being a whole lot different. If creditors have intentionally undermined the viability of the indebted, fairness is being recovered, not lost.

[notadmblnd]

31. the message I'm sending is that I made a wise business decision

Just like any banker would in times such as these. It's in my economic interests to default. Don't even attempt to put a guilt trip on me or imply that my family and friends will think less of me, hell they admire me for it and wish they had the guts to do what I'm doing.

[Fire1]

41. Yep. It's called cutting your losses. I've made that decision

with my rental property.

[dysfunctional press]

35. i have a lot of equity in my house...even after the housing market collapse...

and we have room for a whole 'nother family, if one of our friends is forced to walk away from their very underwater house.

we most likely won't be going anywhere for awhile yet.

[thotzRthingz]

37. ...from the OP's cited article:

Time was, Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work. But the housing collapse left 10.7 million families owing more than their homes are worth. So some of them are making a calculated decision to hang onto their money and let their homes go. Is this irresponsible?

It absolutely is NOT "irresponsible"!

This corporate BIG WIG is upset that some AMERICANS are choosing to exercise GOOD BUSINESS SENSE (while mortgage companies have NOT done so for many years now)? Seems like John Courson is feeling more than a bit chastised & embarrassed... eh? :nopity:

[laughingliberal]

40. I believe the scariest scenario for corporate America...

is a country full of people who 1) have nothing left to lose, and 2) have figured out there is no 'moral' obligation to fulfill your 'responsibilities to a bunch of crooks who got all the laws changed to benefit them and screw you.

Once people get over those feelings of shame about being a deadbeat or irresponsible and realize the system has been gamed against us, they got nothin to beat us about the head with. I realize not everyone is in a position to walk away from everything, families to raise and so on. But many of us are in a position to do so. And the more who do it, the closer we are to starving this beast.

Remember the bankruptcy laws they got passed in their favor in 2005? Designed to keep irresponsible debtors from being able to just walk away? Funny, most people declaring bankruptcy under the new laws still qualified for Chapter 7. Kind of belied their spin about hordes of people who went out and happily ran up debt and just skipped off. Now, and I love how they set this trap for themselves, their shenanigans have tanked the economy. People filing bankruptcy today are, generally, out of work or have lost income and are not forced into Chapter 13. I can't tell you how much I enjoy that fact. Finally, painted themselves right into the corner they thought they escaped with their mean-ass bankruptcy law in 2005.

[LaPera]

47. Do corporations feel "shame" when they file bankruptcy because of their own incompetency?

Or because of their unreasonable greed, do you think they feel "shame"?

Or take the workers tax dollars bailouts to enrich themselves....Do they feel "shame" and a "moral obligation" to honor their end of the deal?

[laughingliberal]

54. My guess is they do not. lol

I am ROFL at the ginned up righteous indignation this industry spokesperson displays in the article about people who walk away after a clear financial calculation on their part. Like we haven't learned how to make those kind of cold financial calculations from the likes of them. I think turning their own game around on them is the best idea since sliced bread. I had our mortgage company calling constantly over our payments and I would try, diligently, to explain our business was down, etc...asked them not to call 4 or 5 times a day. Mind you, this started before we had ever gone 30 days past due. It was driving me over the edge. We were working our asses off trying to stay above water and still sinking. Finally, I just snapped on the phone. I said, "We are doing everything we can to hang on to this house that is not worth what we owe on it and we will continue to do what we can. But, frankly, it doesn't mean that much to me. If I have to listen to this kind of crap from some snot nosed collector working for one of a handful of crooked financial institutions who brought the whole economy down on our heads you can have the damned house back. Just tell me where I can drop the effing keys off!" It was hilarious to hear the immediate change of attitude. "Oh, no, now nobody wants that." "In that case," I said, "I don't want to hear one more word from your company. I did not finance with you people and am not happy that someone sold my mortgage to you. One more call, one more snotty response when I call to make a payment and you can have this damned house and I hope you enjoy it." Never heard another word. Finally deciding you don't have to take it from them? Priceless!

[tranche]

51. There is no MORAL obligation to a contract.

That is why said contract exists.

[quaker bill]

64. Only if you do not value your word

However, people in desperate circumstances must do what they need to do.

[slackmaster]

67. In a mortgage contract, you give your word to do one of two things:

1. Make the payments on time, and keep the house, or

2. Relinquish ownership of the house.

Which one you do comes down to a business decision.

[TicketyBoo]

52. Those of you who think it's wrong

to walk away from a mortgage, well, don't do it.

But when things were going great guns, I had mortgage brokers calling me AT LEAST twice a week trying to hook me into refinancing to take out equity. I can see how people would have been tempted to do that. I consider mortgage brokers con artists.

[DesertFlower]

55. i got those calls too.

i was tempted to put a recording on my answering machine saying "i don't want a home equity loan or a refinance".

[quaker bill]

65. I got these calls too

but recalled the sage advice that anything that seems too good to be true, probably is.

People in these circumstances just need to do whatever is in the best interest of their family, regardless of how they got there.

[StatGirl]

70. Con artists indeed

A relative of mine, who is an attorney specializing in financial issues, used to get calls from people trying to persuade her to take out an equity loan. Once she used the phrase "basis points" in explaining to one of them why she wasn't interested. The person said "You know what basis points are?" and ended the conversation.

[TicketyBoo]

77. When we refinanced,

our local bank gave us a loan for a single $275 loan origination fee with NO points.

Our credit is impeccable, of course, or we would not have been given such attractive terms.

Loan brokers got several thousand dollars in fees for roping people in, and there was absolutely no incentive for them to care whether or not a borrower was able to pay the loan payments. This was setting up dominoes, and it's just a wonder that it took so long for those dominoes to start falling.

Then the biggie banks get bailed out and the poor folks who were suckered — yes, suckered — into these loans are left holding the bag (as in, "Here's your bag, what's your hurry?" as they're hastened out of their foreclosed-upon home) and not much else.

[LaPera]

53. Walking away, is a business decision, just as corporations who file bankruptcy

and walk away from their contracts, a business decision to stay financially afloat...yet these assholes want to make it about morality and these fucking clowns watch TV and believe this corporate bullshit and try to force their pontificating "morality" crap onto others...it's fucking business, now go read your fucking scripture you fucking lying oh so holy hypocrites!

I'm sick of their one-sided, pointing fingers, bullshit!!

Pay the lying deregulated banks each month until you finally go under, instead of feeding your family...is that their fucking "morality"?

[JCMach1]

58. Seriously, in this moral environment, why not outsource your own losses?

That's what most of the banks have done...

[NutmegYankee]

73. +1!

[lib2DaBone]

62. If corporations lie, cheat and steal it's called... 'good business practice'

Yet if I speak out against their crappy minimum wage abuse or 33% on credit cards, I'm told to STFU and sit down.

Then, the religious right will have the balls to lecture me on "good citizenship"?

Oh man, my blood pressure can't take this..


:argh:

[NutmegYankee]

74. +1

[TwilightGardener]

76. On a personal level, I don't see it as a moral issue. On a community level, it

starts to become one--neighborhoods, the local tax base, actually do become affected by such actions if enough people foreclose. And then you really do have to question the impact on your future financial circumstances. Comparing the actions of Little Peon Homeowner to banks and businesses isn't really a good idea ("let's just call it a business decision, banks do it all the time!"). They also have teams of accountants, lawyers, and legislators protecting them and allowing them to cut their losses without punishment. Little Peon Homeowner has no one looking after him and protecting him from the consequences of "cutting losses". He just gets ruined credit, which can have a far-reaching impact on his life.

[laughingliberal]

78. There are more than enough involuntary foreclosures these days to impact the communities

I don't think the percentage of those who walk away will change the situation much. Or, in other words, I don't think the number it involves will save the community if they choose not to. But these are the reasons why bailing the homeowners out instead of the banks might have been smarter. Roosevelt did it and a lot of people got to keep their homes on terms they could afford and, in the end, the government made a profit on it. Instead, we handed the money to the finance companies and they pretended to consider modifying the loans (trial modifications), and foreclosed in the end, anyway. Double dipped, as it were. Took the money for participating in the program and still got the property. Pretty slick, huh?

The damage done to the credit rating is something people must weigh in making their decision. If they are set up to hunker down a few years without much credit it could be the smartest way to go. If the mortgage they are paying is much higher than rents in the area (and in a lot of areas that is now the case), the additional money every month may well allow them to pay cash for items they would now be purchasing with credit.

Not sure how things have gone the past few months but friends I have who took bankruptcy (which, I know, is not the same as walking on a mortgage) said they had more credit extended to them within weeks of discharging the debt than they'd ever had before. One couple said they were practically waiting for them on the courthouse steps to give them credit. I was shocked but then it made sense. They have no debt and they can't declare bankruptcy for 10 years, now.