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Homeowners unknowingly paid more in closing costs because their state laws prohibit the lender from coming after them on underwater (negative equity) mortgages.

If you live in one of these 8 states:underwater house

Alaska, Arizona, California, Oregon, Minnesota, Montana, North Dakota and Washington.

Your lender may have charged you more closing costs because of this law.   Please consider this New York Times article:

In fact, borrowers in nonrecourse states pay extra for the right to default without recourse.In a report prepared for the Department of Housing and Urban Development, Susan Woodward, an economist, estimated that home buyers in such states paid an extra $800 in closing costs for each $100,000 they borrowed. These fees are not made explicit to the borrower, but if they were, more people might be willing to default, figuring that they had paid for the right to do so.

How does it feel to know that you may have paid higher closing costs than other homeowners, just because your state literally blocks and prohibits the lender from coming after you for anything other than the house.  In the lenders defense, they knew that if anyone in those 8 states were to default, it would be more costly for them, so they had to charge more.  Does that make it more justifiable to strategically default? Possibly … Read More Here

Jon Maddux

CEO at  www.YouWalkAway.com

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Strategic Default Consequences

January 26, 2010

Strategic Default Consequences

When deciding to make the decision to do a strategic default, it is important to weigh the pros and cons. When a homeowner strategically defaults on their home, they are following the mortgage contract that states that in the event of default or non-payment of a mortgage loan, the home shall serve as [...]

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Strategic Default How To

January 26, 2010

Strategic Default How To

When deciding to make the decision to do a strategic default, it is important to weigh the pros and cons. Click here for strategic default consequences When a homeowner strategically defaults on their home, they are following the mortgage contract that states that in the event of default or non-payment of a mortgage [...]

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It Is Finally Ok To Walk Away From Your Mortgage

January 17, 2010

Thanks to Yahoo Finance, we can all sleep at night knowing it’s ok to walk away from our mortgage. Consider the video below:

With plenty of controversy, at You Walk away.com, we have been saying this exact thing since December 2007.  Not trying to brag, but just trying to share the change in consumer and media [...]

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The Tip of the Foreclosure Iceberg

January 12, 2010

Default…  The Domino Effect
Defaults are like dominoes.  As more people default, it becomes more socially acceptable.  The Wall Street Journal recently reported that:
“Our research showed there is a multiplication effect, where the social pressure not to default is weakened when homeowners live in areas of high frequency of foreclosures or know others who defaulted strategically,” Zingales [...]

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The 12 Months Of Default Song (Christmas Song)

December 13, 2009

12 Months Of Default Song

On the first month of default my true love said to me…we lost all of our equity!

On the 2nd month of default my true love said to me…  There’s 2 past due letters, and we lost all of our equity.

On the 3rd month of default my true love [...]

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Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis

December 2, 2009

Please consider Legal Studies Discussion Paper by University of Arizona College Professor
Despite reports that homeowners are increasingly “walking away” from their mortgages, most homeowners continue to make their payments even when they are significantly underwater. This article suggests that most homeowners choose not to strategically default as a result of two emotional forces: 1) the [...]

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Strategic Default and the Foreclosure Crisis Video

November 30, 2009

Strategic Default in the Foreclosure Crisis @ Yahoo! Video
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More Walk Away From Homes, Mortgages

November 5, 2009

USA Today reported yesterday:    
When Sharon Sakson was laid off recently from her job as a television writer and producer, she burned through her savings to pay the $2,400 monthly mortgage on her home. But she soon decided it didn’t make sense: Her home was worth thousands less than the mortgage she carried on [...]

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