Home : Blogs : LaShawn Norden : Seminole County Real Estate by LaShawn Norden, Lake Mary RE/MAX

Will there really be no consequences?

Earlier this week, I was having a conversation with a past customer (who is also a licensed RE agent). This customer/agent now has one of his "investment" homes listed for sale in the MLS "subject to a third party approval."

Because I wanted to see if there was anything I could do to help him, I called.

As we were talking, he commented that the home was soon to be in foreclosure. Surprisingly, his justification of "walking away" was rather cavalier.

Simply put he said "I'm really not worried about a foreclosure on my credit as there are hundreds of thousands of people who are in my same situation and really, I think the government or credit agencies will be more understanding of this in years to come and before you know it, I'll be back buying homes again!"

I was in awe. As a responsible, mortgage-paying individual, I was quite shocked that someone wouldn't take a foreclosure more seriously. I've always been under the impression that losing a home to foreclosure is something that you should avoid at all costs and that my credit score was directly related to rates I paid for mortgages, credit cards, car loans, insurance and probably a whole lot more.

...So, here's my question...Does his statement have any merit?? Do you think that the government or credit agencies are going to be more "understanding" of those who walk away from their homes...regardless of whether it's their primary residence or an investment property?

Posted by LaShawn Norden on 05/01/2008 09:53 PM

Comments (8)

foreclosure, credit, investor

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8 Comments on Will there really be no consequences?

maybe in the years to come they might be a little understanding but not in the near future. Right now banks have stricker lending practices and they will continue to have them for quite some years. They don't want the credit crunch to happen again like last year. But the longer the foreclosure has been on his record and if he has no other lates, then in the later years there will be some or little understanding.

05/01/2008 10:01 PM

by Zen Ziejewski (Prudential California Realty)

I agree with him. Bottom line it is a huge section of the population that will want home ownership again. Someone will want to work with these folks especially when the market turns again. I would not be so hard on the guy. I don't know how much you went into detail with him but he may just be in a spot he can not get out of and not have a choice.

05/01/2008 10:03 PM

by Team Newington (First Priority Financial)

Yes and no. I think that the fat part of the curve might move down a little bit, but it won't be a free-for-all.

05/01/2008 10:04 PM

by Lane Bailey - The REALTOR for Car People (Diamond Dwellings Realty)

LaShawn....A definite cavalier statement. I feel for the individuals that got themselves into the position that they are in, but when will those individuals accept there responsibility. Some have and alot have not. I really don't know if there is a fix to the whole credit crunch!

C. Lange

05/01/2008 10:16 PM

by Michael Lange, e-Pro, GRI and Cheron Lange (John Hall and Associates)

I think this attitude is part of what got us in the crisis that we are in now.

05/01/2008 10:16 PM

by Tammy Anderson-Owens, Broker/Associate (The "Metro East Home Team" of RE/MAX Preferred)

I don't necessarily agree with that logic but maybe he knows something we don't.

05/01/2008 10:18 PM

by Jim Albano (Prudential Damiano Realty)

I would be mirroring Zen's remark. Credit reporting agencies will simply report the foreclosure; it is up to the lenders to make sense of whether this should be gaged or not. I just do not see Fair Isaac creating a formula that lets the lender know why someone went into foreclosure: did they walk away because there was no value, but they could pay; were they paying, but something prompted foreclosure (I am thinking of the story in the NY Times a while back, where a couple had filed for bankruptcy, but they were paying their mortgage- they could not meet other bills- the lender did not except their payment, failing to tell them how a payment could be made, since they were in bankruptcy procedures and now a missing payment, the lender began the foreclosure process); or lastly they should never have been buying a home in the first place. How do you treat each situation. I may not want to lend to someone who would just walk away, nor to someone who does not have the finances for a home, but someone who was trying to pay I would.

People who have gone through foreclosure may wish to put their side forward on the credit reports.

05/02/2008 05:44 AM

by Frank Schulte-Ladbeck (Frank Schulte-Ladbeck Professional Real Estate Inspections)

LaShawn,

I think his attitude is selfish and irresponsible. If he took on the obligation he ought to have enough integrity to meet his responsibility or to make sure that it was taken care of properly.

Personally, I wouldn't do business with him.

05/03/2008 02:48 PM

by Bob Haywood (McGraw Realtors)

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