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NPR Celebrates Defaulting ‘Home Owner’

From an approving National Public Radio:

Walking Away From The House She Can Afford

by Tamara Keith

December 25, 2009

Many homeowners who are tens thousands of dollars underwater on their mortgages — meaning they owe more than the value of their homes — have decided it’s just not worth it. Some, like Heather Baker, can even afford their payments, but they’re walking away anyway.

Baker is done with being a homeowner. Last month, she stopped paying her mortgage.

"Who says that my American dream has to be a home with a white picket fence and all of that?" says Baker, sitting at her dining room table.

But that’s not what she was saying three years ago when she bought her four-bedroom home in a distant suburb of Washington, D.C. Baker was about to turn 40 and felt like she needed to own.

"I was like, ‘Wow, you know, I need to have a home. I need to be in a home,’ " Baker says. "My birthday was in September. I purchased the house in August. So I got the house before I turned 40, but it wasn’t a great investment."

She figures the house she bought for $465,000 won’t sell for more than $225,000 now. That lower figure is what a house down the street went for earlier this year in a foreclosure auction. Like a lot of people, Baker bought her house with no money down. The mortgage broker she worked with told her she qualified for the loan based on her credit score alone.

"He was like, ‘Go get whatever house you want. It doesn’t matter.’ And that’s pretty much what I did, unfortunately," Baker says.

Starting to sound familiar? Baker’s experience is a classic case of the mixed-up logic that ruled the housing boom. But there’s a difference: Baker is solidly upper middle class. She has a good income and can actually afford her payments.

"I’m looking at the investment part of it," she says. "Not just, ‘OK, yes, I can afford this house.’ But I just don’t see it as a good investment."

Baker and two daughters plan to live in this house payment-free for the next several months. Then, before her foreclosure is finalized and her lenders kick her out, she’ll move into a rented townhouse that’s almost as big as her house. She’ll pay hundreds less each month and cut her commute in half.

"I hate to sound cold and uncaring and contract-breaking, but I’m really OK with it," Baker says. "I’m actually looking forward to moving." …

The most disturbing thing about all of this is that Ms. Baker seems to be positively proud of her actions.

Of course what does she have to lose? She didn’t have to put one red cent down on a loan for a half million dollar house.

Besides, the bank tricked her into buying the house in the first place.

Keep her story in mind, and that of who knows how many like her, when you read about the problem banks are having lending money.

This article was posted by Steve on Monday, December 28th, 2009. Comments are currently closed.

30 Responses to “NPR Celebrates Defaulting ‘Home Owner’”

  1. proreason says:

    Situational ethics.

  2. jobeth says:

    The new morality.

    I keep thinking of Mad Magazine…”What? Me Worry?”

    What ever happened to the goal of being able to look in the mirror and seeing a good person?
    At being able to be known as a person who’s handshake is his//her bond?

    Rhetorical questions of course.

  3. jobeth says:

    I wonder who she’s going to blame IF we can get some conservative sanity back in government and the economy and housing bounces back and she realizes she lost AGAIN.

    No matter…Barney will probably give her a bigger loan for a bigger “investment”.

  4. crosspatch says:

    If you are more than $50,000 upside-down in a mortgage, walking away makes economic sense. Just walk away, take the hit on your credit. It will go away in 10 years. It can easily take decades to recover the upside-down amount or maybe never. In her case, walking away from $240,000 makes sense. I would recommend anyone else that much upside down in their mortgage walk away, too. She would probably never recover the $240K. A financial adviser worth their salt would giver her that as one of her options.

    There is a lot of “shadow” inventory out there. There are homes that people are in default on that the mortgage companies have not foreclosed on and there are homes the banks own that they have not yet put on the market for sale. They are simply holding on to them. The market is probably not going to recover in our lifetimes.

    • proreason says:

      “The market is probably not going to recover in our lifetimes.”


      And, as designed.

      By Barney Franks, George Soros and the little boy king.

      It’s a wonderful destruction of wealth, isn’t it? Particularly considering that a home typically constitutes a very high percentage of the wealth of a middle class person, and a very low percentage of the wealth of the criminal class and the robber class.

      And add to that the wealth destroyed in the stock market in Sept/Oct 2008, which also left the criminal class untouched and the Soros class untouched.

      And if they get their way, global warming will also impoverish the middle class without touching the criminals and the robber barons. Ditto for Health Care.

      Every action is a ballistic missle at the white middle class.

      Obamy couldn’t have designed it any better to punish the bitter clingers.

    • jobeth says:

      Crosspatch, you addressed the “investment” issue. How about addressing the issue of her signing a contract?

      Are we now a society who encourages people to break a contract just because they made a mistake in signing it in the first place?

      Could we then expect the banks to do the same if our homes suddenly increase in value. “Oops…sorry homeowner…we had no idea that the house we sold you would increase in value so much….oh, by the way…be out next Tuesday…we need to resell it at a higher price.”

      Crosspatch…with respect….Just because we CAN do something doesn’t mean we should. Where’s our values?

    • Steve says:

      If Ms. Baker had had to put 20% or more of $465,000 down, she would not be walking away and leaving the bank — and ultimately — the rest of us on the hook.

    • Rusty Shackleford says:

      Ms Baker bought the house on the premise she would clean up and make a ruddy fortune when she rolled it over for profit. Like any financial risk, they are real and sometimes crippling. However, that does not absolve the buyer of their part of the bargain.

      1) There wasn’t and never is any guarantee that real estate values would continue to rise.
      2) Know what you’re signing, be it a straight interest mortgage or an ARM.
      3) Don’t buy a house with the intention of using it to finance your retirement. Buy it to live in.

      Walking away is fraud. The only “justification” is perhaps bankruptcy, as has been pointed out. If you really can’t afford it, there are methods to show that and use the courts to keep you from being further wrecked financially.

      But buying something and then saying, “Oops, never mind”.

    • Wanderlust says:

      There are many professions which check credit records of potential new hires or current employees, and for good reason. I would not want someone like Ms. Baker working for me, because she evidently has no concept of how poorly her behavior in this instance reflects on her professionally.

      What amazes me most, though, is how the MSM generally are cheerleading people like this and castigating banks in the same breath. If people in the media had any conscience at all, they would be asking what banks are doing to ensure that, regardless of slimy inducements to make bad loans by Fannie or Freddie, people are now only borrowing money where they can demonstrate a low-risk ability to repay the debt – and ensuring that the banks review their loan portfolios so that they can take action on loans that should never have been made in the first place.

      Either banks will get ahead of the coming tidal wave of “shadow inventory” defaults by being proactive about managing risk now, or else they will be sucked under by it over the next 24 months.

  5. bobbys says:

    Well they were yelling that once BO got elected one would not have to worry about making house payments and putting gas in your car..

    Shes getting another place cheaper and cutting her commute in half..

    Not sure what the next Logic leap is in her financial life is but i should not ponder it as it must have something to do with penalizing someone else .

  6. Yarddog1 says:

    For many, goodbyes were said to morality, self-sufficiency, honesty, patriotism, responsibility and class years ago.

    Why – our very “gubmint” has encouranged such mindsets.

    A shining example is “It’s All About Me” Obamao.

  7. Right of the People says:

    It’s like the old argument; “Would you rather live in the ascendancy or the decline of a civilization?”

    We, unfortunately, are living in the decline. This woman obviously has an extreme lack of morals. Walking away from a mortgage because you can’t make the payments is one thing, walking away because you just want to is quite another. This is reprehensible and should be criminal. At the very least this should preclude her from getting any type of loan for a long, long time.

  8. proreason says:

    Everyone responding to this thread, including myself, is obviously a racist.

  9. jobeth says:

    This lady just may get her come-upence in the end.

    From the original story at ‘National Public Radio’ (link at top of Steve’s post) I found the following quote:

    “It’s more than an economic decision. It’s a contract,” says Guy Cecala, publisher of Inside Mortgage Finance. “There are liabilities associated with defaulting on a loan.”

    “He says in most states banks can come after homeowners for the losses caused by the default.”

    It would serve her right, I would have to say. She just may have outsmarted herself with this one. And once the mortgage company sees her story on National Public Radio….well, If I were them, I’d be going after her…and that cavalier attitude of hers.

    • Rusty Shackleford says:

      “She just may have outsmarted herself with this one.”

      Closed-end-loop if ever there was one.

  10. vladtheimp says:

    Need more information – how much money does the estimable Heather Baker earn annually; what percentage of her annual income goes to the mortgage; was she entirely honest in completing her loan application; did she check with Obama to see if there is money in the Obamastash to help her out; where does she work – the federal government, perchance?

    If the woman earned a high enough income to afford a half a million dollar house, she damn well should have known exactly what she was getting into before she signed the contract committing her to pay the bank. But what the hell, she is a poor, victimized minority and we should celebrate the fact that she is screwing the bank, its shareholders, and the rest of us.

    Free health care on the way, baby!

  11. CapeCodOrca says:

    She may be pulling in close to six figures as a Network Engineer in the DC metro Area. Here’s her Linked In Page:


    Heather Baker’s Experience
    Video Hub Technician
    (Public Company; VZ; Telecommunications industry)
    January 2008 — Present (2 years )

  12. BigOil says:

    I can predict – with roughly 97% certainty – whom this ethicallly challenged individual voted for in the last presidential election.

  13. U NO HOO says:

    “Are we now a society who encourages people to break a contract just because they made a mistake in signing it in the first place?”

    Hey, marriage is a contract and we don’t care if people break those contracts.

    And hey again, is Ms. Baker married, ever been married, a single slutty mother, or what?

    Maybe her children are on-the-job accidents and without the public option “abortion is in” language, well, she has two children, daughters, maybe apprentices in her trade.

    Just saying…

    • jobeth says:

      The only thing I would differ with you on, is marriage, while a contract can be gotten out of with MUTUAL consent of both parties. I know, sometimes its only one suing for divorce but both parties are taken into consideration.

      In this case only one party walks out with all the cookies

      hey…as one who has gotten the short end of a divorce stick…I also know it isn’t always fair Just not the same thing.

      Just took a gander at her resume’ page. Seems she is on the “National Honor Society in Computer Sciences” .

      Ummm…possibly the only honor she understands.

  14. vladtheimp says:

    CapeCodOrca – If that indeed is the same Heather Baker, one wonders if Verizon has any policy about its employees conduct. Also note that she seems to have enough cash to pursue an MBA/MS in her spare time – or is this another perk of affirmative action hires?

    University of Maryland University College

    MBA/MS in Management , Information Technology , 2009 — 2011 (expected)

    Pursuing dual degree – MBA/MS in Management focus in Information Systems and Services

  15. BillK says:

    It’s only a limited amount of time before employers are forbidden from using credit checks as a precondition of employment for just this reason.

    Further, banks will be told that they’d better issue credit cards to people like this, or the Government will “get involved.”

    Look for both any day now.

    Meanwhile, how long before people start doing this with autos?

    After all, almost 100% of people with auto loans are upside down on them, given every new car drops in value by at least 20% the second they’re driven off the lot, and they’ll never rise in value, so why not?

    For all those concerned with contracts, the President has shown one can summarily ignore and/or invalidate them (say, employment or salary contracts), so why shouldn’t the people follow his lead?

    • Steve says:

      “Meanwhile, how long before people start doing this with autos?

      After all, almost 100% of people with auto loans are upside down on them, given every new car drops in value by at least 20% the second they’re driven off the lot, and they’ll never rise in value, so why not?”

      Great point!

  16. Knuckle Dragger says:

    It’s been a long time since I took Contract Law, but I seem to remember something called an anticipatory breach. If someone reveals their intention to breach a contract, it is already considered breached. The bank should be able to throw her out of the house right now.

  17. Liberals Demise says:

    She has the money but damn it all, it’s not the American Dream she wanted after all. Sooooo………..the banks are full of dat obama monies!!

  18. yadayada says:

    her breach is illegal and the banks can persue if they wish. don’t know how they will fair in d.c against a minority single mother in the obeyme world we have created.
    plus, her resume says she has worked for the d.c. gubmint, so I’m guessing she may even have a contact or 2 that soften any backlash when she applies for a new motgage in the next couple years. nice low price, nice low apr, if the real estate market rebounds a little.
    oooooo!!! now the white picket fence is looking attractive again.

  19. rockslide says:

    There are people that are so in a hole that it is best for the banks to take the house and get them out of the way.

    But in this case…if I were the legal counsel for her mortgage company I would say it would be worth the $500,000 it would cost to sue her for breach of contract. I would specifically ask for the judge to order her to abide by the real estate mortgage contract and that until said time as she can sell the house and pay off the mortgage she is to be ordered to pay her contracted mortgage payment.

    A judge cannot order a person without financial means to pay more than their income allows. However, there is legal precedent that would allow a judge to order this woman to contine making her payments on the contracted mortgage until either said mortgage debt is retired and/or her income falls below what the reasonable costs of the mortgage are.

    They need to make EXTREME examples of these people who bought houses expecting to make a killing and walking away when they dont get their way…that is not the way our legal system works

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