And what have you done
Another year over
And a new one just begun
Ans so this is Christmas
I hope you have fun
The near and the dear one
The old and the young
A very merry Christmas
And a happy New Year
Let’s hope it’s a good one
Without any fear
And so this is Christmas
For weak and for strong
For rich and the poor ones
The world is so wrong
And so happy Christmas
For black and for white
For yellow and red ones
Let’s stop all the fight
A very merry Christmas
And a happy New Year
Let’s hope it’s a good one
Without any fear
Happy Xmas — John Lennon
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Asking Price: $499,950
Income Requirement: $124,987
Downpayment Needed: $99,990
Purchase Price: $546,000
Purchase Date: 7/19/2005
Address: 1703 Terra Bella, Irvine, CA 92602
First Mortgage $435,750
Second Mortgage $109,150
Downpayment $0
Beds: 2
Baths: 2
Sq. Ft.: 1,341
$/Sq. Ft.: $373
Lot Size: –
Type: Condominium
Style: Other
Year Built: 2002
Stories: Two Levels
Area: Northpark
County: Orange
MLS#: P609749
Status: Active
On Redfin: 28 days
From Redfin, “Beautiful Tuscan Village architech with desireable front entrance with small balcony. 2 bedroom 2 1/2 baths with a living area of 1341 Sq. Ft. in an incredibly well kept gated community with guard. Association Pool and spa with very low association fee. Ceramic tile and carpet flooring throughout. In very good condition with breakfast counter/bar and very spacious floor plan. Master bedroom with dressing area and walk in closet. Central A/C and Heating. And so much more!”
desireable? architech?
incredibly well kept? Is it really?
Shouldn’t the asking price be $499,999.99 and 9/10?
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Since this is another 100% financing deal, the lender will eat this one. Assuming a 6% commission, they will lose $76,047.
These sellers will probably not pay the bank back the $76,047, and they will just walk away. They probably could afford to repay the debt as it isn’t that large, but in many instances, the debt is overwhelming. Those are the circumstances I would like to discuss today.
There is a “strictly business” aspect to the decision that most often points to walking away, and there is a moral aspect that never points to walking away. This is a complex dilemma, and it is easy to moralize when one is not in the dire financial straits a massive home debt can bring about. However, people often find it far too easy to just walk away and justify their immorality.
IMO, walking away and declaring bankruptcy probably go together. There is probably not much distinction between the two as it impacts one’s credit score (perhaps some, I don’t know, but they are both bad.) Bankruptcy law was put in place to give people a fresh start when life’s circumstances create a debt that could not be repaid in any reasonable amount of time (7-10 years.) We can debate whether or not these circumstances were self created, and we can debate the morality of bankruptcy law, but these laws are on the books because debtor’s prisons were not serving the greater good (we can debate that too if you want.) Therefore, it can be argued that society has determined it is desirable — and thereby moral — to wipe the slate clean and give people a second chance. Lenders knew what the bankruptcy laws were when they chose to make the loan. If they chose to extend the credit, do they bear any moral responsibility to the outcome?
IMO, when faced with a debt that cannot reasonably be paid off in 7-10 years (which will be very common in the aftermath of the housing crash,) it is the right financial decision to walk away from the debts. It is in society’s best interest to have a productive citizen whose income is going toward restrained (due to lack of credit) consumer spending rather than unrelenting debt service. Is this moral? You tell me.