"There's no question that in my 40 years of real estate law practice, people are more prone to walk away from property now than ever before," said San Jose real estate lawyer Ron Rossi, who said he probably gets 50 calls a week from underwater homeowners wanting to know if they can sell their home for less than they owe (called a short sale), attempt a loan modification, or default, walk away and face foreclosure.
Even some who aren't feeling the pinch financially are contemplating walking away from their mortgage, said Skip Houston, a mortgage broker in Campbell. He said their reasoning is, "Why should I make my $4,500 house payment? I could let my house go, and rent this exact same house for $2,000."
Fredman said that many people who contact him have "pretty much realized they don't want to keep the house under any circumstances. They just want some help through that process in terms of personal liability issues, tax issues, just sort of basic hand holding, often."
But even for a lawyer, reaching a lender to discuss a walkaway client or a deed in lieu can be tough, Fredman said.
On his desk are keys to the house of some clients who walked out on their mortgage (and home) last fall. Fredman said he wants to return the keys to the lender, but it's been months, and the lender has not yet told him where to mail them. Nor have they foreclosed on the homeowners.
"It may come to the point of having to sue them to get them to take the house back," he said.
OK - just ignore the lady who does not want to pay her mortgage, can not sell her house, but does not want to damage her credit score. She is renting the property just not bringing in enough to cover all the expenses. We will cry for her another time. Lets get to the real story buried in the article - the possibility of lawsuits against lenders making them foreclose on the property.
We have often heard stories about lenders reluctant to foreclose on properties - and this article seems to validate at least a few cases of that happening. There is a new STFU now - Suing To Foreclose on Underwaters. The foreclosure crisis seems to getting worse everyday.