Readers’ View of Foreclosure Choice: ‘Deadbeat’

The difference between writer Cathy Curtis (“Her Mortgage Check Won’t Be in the Mail,” Oct. 16) and the rest of us who are in the same “upside-down” mortgage situation is a difference in values and moral integrity with regard to obligations.

Curtis seems to feel that since she’s in a situation she’s not happy with (she made it clear that she wasn’t financially desperate), a viable option is to stop making mortgage payments, let the bank foreclose and walk away with the “saved” mortgage payments.

What’s wrong with this picture goes a long way toward explaining why lending institutions can’t make “character loans” the way they used to, and why borrowers of good character have to pay relatively higher interest rates on loans and receive lower interest rates on deposits than in the “good old days.”

Risk management becomes an impossible guessing game when professionals with previously good credit ratings and payment histories suddenly decide they can live with seven years of bad credit on their records because it’s more convenient than honoring debts.

PATRICIA L. WELLS TURNAGE

Oxnard

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No wonder there is a moral crisis in the United States. Our society makes it too easy to walk away from our commitments for even the most trivial reasons.

A lender can help a home buyer evaluate the pros and cons of buying a home, but cannot guarantee future value. The assumption that lenders can easily absorb these types of losses ignores the fact that the lenders’ increased costs get passed back to all of us and affect the availability of credit.

LOUIS H. NEVINS

President

California League of

Savings Institutions

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The article by Cathy Curtis is representative of the appalling absence of individual responsibility that undermines today’s real estate market, not to mention society as a whole.

Without a trace of shame, Curtis details her scheme to walk away from her mortgage because “living far from friends, night life and good bookstores is a drag.” This is outrageous.

Although her biggest concern is to get away with this fraud while minimizing the “awful repercussions” to her credit rating, Curtis might do well to contemplate the larger impact of her abdication.

THOMAS L. DELANEY JR.

Solana Beach

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Poor Cathy Curtis! Imagine the incredible hardship of maintaining a big back yard and the unspeakable horror of having to drive a few extra miles to find a “good bookstore.” Instead, why not rip off the lender?

I wonder if Curtis realizes she’s also ripping off every socially responsible borrower who pays higher mortgage interest rates to offset lender losses caused by deadbeats such as herself?

BRUCE A. NELSON

Mission Viejo

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On Cathy Curtis’ decision to renege on her mortgage debt:

Real estate has had a constant increase in Southern California for 50 years, yet she considers it a “feeble hope” that it will resume its appreciation after the present downturn ends.

Will she truly enjoy a “quality life” living in her house for six months and banking the payments she owes to her lender? Actually, she can probably stretch that by at least two more months by forcing the lender to evict after the foreclosure sale. That is what a deadbeat would do.

JACK EIDER

Pico Rivera

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Cathy Curtis wrote that the “bottom line” to negotiate a short sale with the lender is an “unavoidable hardship” on the part of the homeowner. This is not always the case.

Short-sale contracts that are correctly submitted to the right person, yet have little or no hardship, still have a chance of acceptance. The key is to negotiate and to give the lender what the lender wants: a performing loan and a promise the property will not be destroyed.

This means, in the simplest terms, immediately give the lender a short-sale offer that is acceptable and promise to carefully baby-sit the place until the new borrower takes over. In the process, point out to the lender their alternative: the expenses of foreclosing, plus losing 6-12 months payments and then risking costly vandalism while a broker tries to market an empty, unappealing house for a commission at the same reduced price that the short sale would have had anyway.

The article also mentioned that a deed-in-lieu of foreclosure “is not a viable option.” Yet, in reality, deeds in lieu remain a very viable alternative to many homeowners.

JEFF JENSEN

Huntington Beach

The writer is the author of “How to Fight Foreclosure and Win With Honor.”

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You have no valid reason in stopping your mortgage payments simply because your house is not worth what it once was (or is a drag).

Foreclosure is an option for serious hardships and not for deadbeats such as yourself.

JOEL KOEHLER

Laguna Niguel

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What is forgotten is that when one signs a contract or shakes a hand, they give their word that they will do something in exchange for something else. The bank came up with its part. What possible justification can she have for not coming up with hers?

JOHN VAN HORN

Los Angeles

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Even though my wife and I put 20% down on our own home and have prepaid on the principal, we’ll be fortunate to sell without owing more. It’s even more frustrating trying to compete in a market that is made even more competitive by homes that people have walked away from and which are aggressively priced by banks for quick sales.

PATRICK R. KANE

Port Hueneme

Curtis’ articles reinforces my belief that foreclosure laws are unfair to those who have a sense of commitment to their word. She made a bad personal and business investment and is unwilling to accept the consequences.

She somehow feels justified in using the fact that foreclosure laws that have been put in place to protect people make it too costly to pursue people like herself who should be pursued.

TERRY SCHAACK*

Beverly Hills*

Curtis’ statement, “But I figure that the quality of my life has to be more important than the temporary status of my credit line” would more accurately state her attitude if she had said, “But I figure that the quality of my life has to be more important than my integrity and ethics.”

BUREN L. BLACKWELDER

Thousand Oaks

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What the article failed to mention was that the Federal Home Loan Mortgage Corp. (FHLMC) and the Federal National Mortgage Assn. (FNMA) have increased their mortgage insurance requirements for homeowners on fixed-rate mortgages having a term greater than 20 years, and all adjustable-rate mortgages having a term greater than 20 years, and all adjustable-rate mortgages on loans with a loan to value greater than 80%.

That translates into higher housing costs for you and me. That’s how they have chosen to handle the risks associated with these loans.

BETSY BAYER

Los Angeles

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What’s missing in this article is the additional problems Curtis will cause her neighbors because of this decision. When a lender forecloses on a property they are under pressure to dispose of the house as soon as possible. This has a chilling effect on the values in the neighborhood and continues the downward pressure on home prices.

Additionally, a lender may not be located close to this property and its physical appearance will suffer as most lenders are hard pressed to show the same pride of ownership in maintaining the property as a homeowner.

CRAIG G. BLUNDEN

President

Provident Savings Bank

Riverside