Strategic defaulting couple generating negative comments from readers

[Liberal_in_LA]

click on link, then scroll to comments at the bottom of the article... People are hopping mad at this couple.

Strategic defaults on homes on the rise
Carolyn Said, Chronicle Staff Writer

Jose and Anna Tolentino moved into their Novato condo in August 2005, two days before Jose, a Navy reservist, shipped out to Kuwait.

"I was happy to have my wife in such a nice place while I was away," he said.

But now, with the condo worth about half the $425,000 they paid, his attitude has changed.

"I don't want to keep on paying when the house will never go back up to its value," he said. "It's better to cut our losses, get out of there and go rent."

The number of people similarly choosing to cut their losses on their homes continues to rise. Studies estimate about one-quarter of all defaults are voluntary "walkaways," also known as strategic defaults and jingle mail (for the sound the abandoned keys make in a mailbox).

The phenomenon reflects shifting attitudes toward debt and commitment. In an era where high-profile investors have walked away from multibillion-dollar real estate projects and more than 2 million Americans have gone through foreclosure, defaulting has begun to lose its stigma.

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'Want to start a family'
"We could make our payment every month by doing a little bit of overtime," said Jose Tolentino. "But we want to start a family. We could rent for half what we're paying and afford to have kids."

The Tolentinos continue to live in the condo, but they stopped paying their mortgage in August, and it is slated for foreclosure this month.


Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/03/08/MNAO1C7TT1.DTL#ixzz0hba3f8TA

[MadHound]

1. I don't blame these people for being mad,

The couple, and millions more like them, bought in an overheated market, thinking that the price would continue to go up and up, many with liar's loans or other such stupidity. Now that they can't afford the payment, or their "investment" has crashed, they're going to bail out, and in the process their actions will continue to harm the community they leave behind. I have no sympathy for people like that.

[Liberal_in_LA]

2. They CAN afford the payment, that's what's making people double mad. Also - they are living

rent free in the unit, like a bunch of grifters.

[Lance_Boyle]

3. now, now - let's be fair about this

There are only two of them. They are living rent free like the COUPLE of grifters they are. ;-)

[Javaman]

9. And the corps that falsely inflated values of homes aren't grifters?

They want to start a family.

The banks want their money.

They were honest about their income.

The banks played roulette with the system.

They were able to make there payments.

The banks get bailed out.

So we defend the banks, why?

We as a nation aren't taught how to manage our money and in the current landscape of banks taking the middle class for a ride on their bullshit loans, I say bravo to this couple for using they same tactics the banks used on so many other people.

[Gman]

4. The banks created this situation for the country

it is biting the banks in the ass. Don't get mad at people like this for walking away from something the banks created to screw people over.

[Vincardog]

6. BINGO. The Banks were all good with this when they were profiting off the loans. The Regulators

were all happy as long as the banks were selling the loans on down the line and they were not going to have to be accounted for. The hedge funds were Happy as hell to bundle the worthless mortgages into "AAA" bonds and pass the losses along. NOW the only ones who get the blame are the buyers?
They are just acting on the 'free market' principals that the Bankers and Hedge fund operators have been telling us for years would do the job of BAD Gubmit regulations.

Everyone posting about the greedy lazy defaulters needs to take a big step back.

[MadHound]

7. No, it takes two to tango. This mess was created when greed met stupidity

Buying a house is the biggest investment most people make in their lives, yet few act like it. Rather than doing the work of researching the market, reading the contract, working out their personal budget, too many people simply threw away reason when some lender said "no money down, and a payment of only X dollars (until your ARM resets). BUY, BUY, BUY in this overheated market, nothing can go wrong, values will continue to rise forever!

Sorry, but while the bankers are responsible for a great deal of this mess, so are the fools who mindlessly bought into it. I've seen all too many around here who did so, and I have no sympathy for them. I bought my current (and hopefully last) house a bit over six years ago. I researched the historical property values for the area in order to make sure I wasn't buying on a bubble. I went over the contract with a fine tooth comb. I had pros inspect the house. And when the lending agent at the bank said that I could get a great initial interest rate with an ARM, I said no, I knew what sort of evil those things were. This is what every single person buying a house needs to do, but instead a lot of folks treated buying a house like they were simply buying a flat screen, ooo, bright shiny object, I want!

There are people who have done all the right things, and yet were still burned by this crash, and my heart and sympathy goes out to them. But far too many people simply didn't look before they leaped, and for those folks I have no sympathy at all.

[dkf]

11. Some people did their budgeting can afford it but don't want to pay

I don't understand why anyone would want to loan to people who think like this.

[WhiteTara]

8. no, the banks have AIG insurance

so they get paid and paid again.

[GodlessBiker]

5. They get no grief from me. This is a business decision. Nothing personal, you understand.

[Ikonoklast]

14. Exactly correct. Businesses do it every minute of every day.

No stigma attached.

And if those people can get the system to work in their favor, more power to them.

When a bank screws you over, it's 'just business'. When an individual screws over a bank, he's a 'criminal'.

Wrong.

[Raineyb]

10. Corporations do this type of thing all the time. No one seems to give them shit over it.

Why should the couple bleed money overpaying for a condo that's worth half as much.

Makes me glad I didn't buy a house back when I had a job. I'd be royally screwed right now. (Well more than I currently am at any rate.)

[Fumesucker]

12. Exactly, this is how business is done in America..

And almost no one complains until it is some middle class schmuck that does it instead of a big corporation, then the rest of the schmucks are up in arms.

[NashVegas]

13. The Local Real Estate Prices Are Relevant

And this story is set in the Bay Area.

The real outrage should be directed towards the entire real estate industry: developers, agents, bankers, and everyone else who rode the coattails of those who promoted $250k, $300k, $500k, $800k homes as the norm when 70% of the population makes under $50k.