Home Sellers Defaulting on Purpose
FOX News Channel
Are housing bailout programs creating incentives for people to go into foreclosure on purpose to access bailout funds? The disturbing trend in some areas. Neil Cavuto and Jeremy Brandt discuss.
Well, homeowners not paying their mortgage on purpose – we told you this could happen thanks to the government bailouts.
Now my next guest is starting to see it firsthand. Jeremy Brandt is the CEO of 1-800-CashOffer. What’s going on here Jeremy?
At 1-800-CashOffer we work with home sellers that are in a desperate situation to sell their house quickly – 10,000 a month plus sometimes, and we really noticed a trend over the last couple of months that more and more homeowners are coming to us and saying “I’m willing to go behind in my payments I’m willing to let the house foreclose if it means I can get out of this thing“.
People are much less concerned about their credit and maybe in some cases less concerned about their ethics right now.
So they see maybe a gravy train coming where they’ll be either bailed out or rescued or loans and debts forgiven so get out now?
Yeah – you know, if you look at what the banks are doing right now banks are doing a lot of loan workouts and they’ll only work out a loan with somebody that’s really behind in their payments. If your current on your house payments, the bank isn’t worried that they’re going to have to take that house back and there’s no real incentive for them to lower your interest rate or forgive some of the debt or reprice your loan – but if you’re a three or four or five months behind the banks are looking at an alternative to foreclosure.
Man oh man, let me get this straight all right so these are people who are actually in good shape, they can, they can pay their monthly mortgage but they’re not because they think if they wait a while they too can get in on this rescue gravy train.
You’re absolutely right people that, maybe their house has gone underwater they one hundred percent financed it and the home values declined, they think well if the bank thinks they’re going to have to foreclose on me maybe they’ll give me a better deal than what I’ve got now.
Are you ever tempted when you talk to them Jeremy to say “You’re a jerk”?
Well we don’t say that, but we definitely discourage that type behavior and don’t support it at all.
All right, um.. but you’re obviously seeing a pickup in it so you suspect that it’s not genuine hardship cases it’s it’s people trying to sponge off a system that apparently seems spongeable.
Yeah, well, and it really started earlier this year with kind of the “Just Walk Away” phenomenon where people that had good jobs that could pay their mortgages especially in markets like Southern California and Southern Florida where home values had declined quite a bit mailed their keys into the bank and walked away from their house and said you know I’d really rather take a foreclosure on my record then have to pay this $100,000 extra on my loan that now the house isn’t worth anymore.
I guess the sign of our times. Jeremy Brandt thank you very much.
Guys I’d warned you about this, right? I said as soon as you have a bailout party everyone wants in – even people who shouldn’t be going to that party. Time to calm down.