Letters to the Editor

Re: 'Walk-away homeowners are bitter pill for real estate' (Feb. 12)

Dear Editor:

Marcie is right on the rise of this type of loan default! Purely by coincidence at about the same time as Marcie's article was posted, I was already writing about this phenomenon in my most recent post at JimREJournal.blogspot.com.

Here in the Phoenix area, these "walk-away foreclosures" have become VERY common. I am hearing of situations of this type almost daily (and have been for months now) from agents who are in contact with MANY borrowers who simply decide not to pay, but who can and could continue to pay, with little effort, for the foreseeable future.

Most are not owner-occupants, but rather amateur investor/speculator types who put little to nothing down, primarily through low- or no-doc loans. But there are even a fair number of owner-occupants who are often just bored with their house, see that their is a lull in appreciation, and think it's "not fair" and will just walk away.

Easy in, easy out, I guess.

If only these homeowners would not take the "easy" way out, they would likely benefit if they'd be patient and wait out this rough pricing market. I sincerely doubt that in five years they would regret the decision today to simply suck it up, work through their property challenge and still own, by then, a handsomely appreciated asset.

Jim Zirbes
Realtor
Phoenix, Ariz.

Dear Editor:

Inman, where's the article about the walk-away builders, developers and Wall Street MBA securitization specialists? When a Trump, a Levitt, a Lennar or a Technical Olympic walk away from commitments made to customers, employees and suppliers by rolling to a Chapter 11, it's a "titan" of business making a good "business decision."

Wall Street is in the process of receiving the biggest easy-money bailout in history from the Fed with no other consequence than having to drive a 2005 Bentley for an extra year or two. The Merrill Lynch CEO got fired with a severance package that equals the GDP of some small countries.

When a homeowner walks away from a bad decision, it is some kind of failure of the moral fabric of society. These unfortunate homeowners are making a business decision for which there are consequences that they will have to bear for years. Wall Street gets a blemish on the quarterly earnings report and a tsunami of cheap capital with which to rebuild their balance sheets and to reimburse pension funds and municipalities for unsuitable CDO/SIV investments.

A more interesting report would be to tally all the announced Wall Street bonuses and reported earnings from 2002 to 2006 and see how much of all this negative equity was sucked into Wall Street's coffers.

Also see how billions of dollars have been lost out of pension fund and local government treasuries, which the taxpayers will be forced to replace. How many pension funds have been forced into underfunded status?

Thomas Johnson
Houston, Texas

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