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Academic says underwater homeowners should throw keys at bank; arson, insurance fraud on rise as defaults increase

bank owned home

” Go ahead. Break the chains. Stop paying on your mortgage if you owe more than the house is worth. And most important: Don’t feel guilty about it. Don’t think you’re doing something morally wrong.” –message of a new academic paper by Brent T. White.

Don’t just walk away too quick. Many (banks, mortgage companies) aren’t even following through with their foreclosure threats, because if they did, they would have to show the “toxic asset”, so people are currently walking away, yet nothing ever happens to the home. For example, it has been reported that in high foreclosure Florida, some people have been in pre-foreclosure for over a year. What they need top do is just quit paying, put that money aside, and get ready to be surprised at how long they will be able to continue living in their houses without paying usurious banking interest payments. That’s one of the reasons that we are just seeing the beginning of this — because it’s even worse than we are being lead to believe by the main stream media and banks.

Predictions show that that they are going keep playing this out as long as they can while they continue to pillage the little man. Nothing serious will happen til at least after Christmas so that they have a chance to get even more of the general populace’s money.

Professor advises underwater homeowners to walk away from mortgages
November 29, 2009 – L.A. Times – excerpt

Brent T. White, a University of Arizona law school professor, says that it’s in the homeowners’ best financial interest to stiff their lenders and that it’s not immoral to do so.

” Go ahead. Break the chains. Stop paying on your mortgage if you owe more than the house is worth. And most important: Don’t feel guilty about it. Don’t think you’re doing something morally wrong. That’s the incendiary core message of a new academic paper by Brent T. White, a University of Arizona law school professor, titled “Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis.” White contends that far more of the estimated 15 million U.S. homeowners who are underwater on their mortgages should stiff their lenders and take a hike. Doing so, he suggests, could save some of them hundreds of thousands of dollars that they “have no reasonable prospect of recouping” in the years ahead. Plus the penalties are nowhere near as painful or long-lasting as they might assume, he says.

“Homeowners should be walking away in droves,” White said. “But they aren’t. And it’s not because the financial costs of foreclosure outweigh the benefits.”

Sure, credit scores get whacked when you walk away, he acknowledges. But as long as you stay current with other creditors, “one can have a good credit rating again — meaning above 660 — within two years after a foreclosure.” Better yet, homeowners can default “strategically”: Buy all the major items they’ll need for the next couple of years — a new car, even a new house — just before they pull the plug on their current mortgage lender.

“Most individuals should be able to plan in advance for a few years of limited credit,” White said, with minimal disruptions to their lifestyles.

The main point, he said, is that too often people’s emotions get in the way of clear financial thinking about mortgages, turning them into what he calls “woodheads” — “individuals who choose not to act in their own self-interest.” Most owners are too worried about feelings of shame and embarrassment after a foreclosure, and ignore the powerful financial reasons for doing so. Buttressing these emotions is a system that White labels “the social control of the housing crisis” — pressures and messages continually sent to consumers by the “social control agents,” namely banks, government and the media. The mantra that these agents — all the way up to President Obama — pound into owners’ heads, White said, is that “voluntarily defaulting on a mortgage is immoral.”

Yet there is an inherent imbalance in the borrower-lender relationship that makes this morality message unfair to consumers, White says: Banks set the rules during the housing boom, handing out home loans with no down payments, no income checks and inflated appraisals. Now that property values have dropped 20% to 50% in many areas, banks have been slow to modify troubled mortgages and reluctant to reduce principal debts.

Only when homeowners cut through the emotional fog and default strategically in large numbers, White argues, will this inequitable situation be seriously addressed.”

Black Forest man arrested in arson at home

November 18, 2009 5:04 PM

A Black Forest man was arrested Tuesday on suspicion of arson, accused of burning down his former home in July rather than allowing it to be taken by the bank after it had gone into foreclosure.
Mark Rance, 48, is being held in the El Paso County jail on $75,000 bond.

The next door neighbor, Kelvin Kaercher, was up late watching television around 4 a.m. on July 22 when he said he heard a couple of muffled explosions and saw flames shooting from the home and garage at 13645 Wildoak Drive. Fire crews fought the blaze for several hours but were unable to save the house. No body was found in the home and investigators tried to contact Rance to determine if he was in the home when the fire started.

Facing foreclosure, landlord allegedly looked to arson


Prosecutors have filed solicitation to commit arson charges against a Woodinville contractor who was allegedly caught on tape offering to pay his tenant $10,000 to burn down a house in foreclosure.

According to police statements, investigators outfitted Michael Anthony Poole’s tenant with a body wire to record the conversation. During the recorded exchange, prosecutors allege, Poole also asked that his tenant stage a break-in at a Monroe video game business owned by Poole.

Poole, prosecutors say, had asked renters at his Woodinville home to burn down the 152nd Avenue Northeast residence several times before one of the tenants contacted authorities.

Speaking with King County Sheriff’s Office investigators, the man said he initially believed Poole was kidding when the landlord suggested he burn down the home. In the weeks that followed, Poole’s requests and offers became more specific.

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