It is, however, shameful. Provided the transgressor has a sense of shame. Laura Richardson: call her Sinverguenza.

On June 11th, 2008 at 9:31 am, bloghooligan said:
Re: Michelle Augustine – wouldn’t the bank simply apply the loss of the house she willingly let go into foreclosure to a lien on her new house? And if that bank so desired, couldn’t they force foreclosure on the new house to pay off the debt of the old (which would be way more than the $200k she’s currently in the hole for).

No – Banks are not allowed to do that with mortgages. The mortgage is tied to the specific property. So if the bank takes a loss on that property then it’s the banks loss.

“I can find the same exact house as what I live in right now for half the price,” says Ms. Augustine, 44 years old, who runs a child-care service out of her home. She says she soon will be unable to afford her monthly payments, which will jump to $4,000 from $3,300 in August, and she doesn’t want to continue to own a home that is now worth $200,000 less than what she paid for it two years ago.

Ms. Augustine should be calling her mortgage company to see what type of modifications they have for pre-deliquency borrowers. The bank I work for allows you to lock in a minimum payment rate or fixed rate.

It’s just a business decision,” says Linda Caoili, a Sacramento real-estate agent who is working with Ms. Augustine and others who are considering walking away from their mortgages

Ms. Caoili should be called in front of an ethics board and lose her real estate license and be investigated for fraud.

This smells terrible, indeed. Perhaps reporters could simply ask some general questions of WaMu about its foreclosure workout policies. Like:

* How often are modifications or repayment plans offered to owners of vacant investment properties with no or negative equity that have never been listed or rented? ALL THE TIME
* How often are modifications offered to borrowers with two other properties currently in foreclosure? ALL THE TIME
* How often are modifications arranged in the week before the scheduled trustee’s sale, following nearly a year of no contact?ALL THE TIME
* Does WaMu’s policy on modifications make any reference to requiring a “commitment to homeownership” on the borrower’s part? How, normally, is that established?Cannot state specifially about WAMU – but in the industry, if a bank has the loan, they don’t want to take it to foreclosure – since it’s a money losing proposition. They would rather work with a borrower.
* Does WaMu’s policy on modifications make any reference to establishing that the borrower does not display a “disregard for debt obligations”? How, normally, is that established?Credit is usually pulled. Ratios are calculated to see if the borrower is able to pay the mortgage. If the borrower breaks the modification agreement the home goes back into foreclosure and they are not given a third chance (in most cases)

If, for instance, we had some evidence that stiffing creditors and getting the taxpayers to subsidize her financial imprudence was, like, a pattern of Richardson’s long before the house payments went into default, would that, like, indicate that her mortgage problems may not have much to do with “extenuating circumstances”?In this case I would be very surprised that an underwriter would apporove it – since it was not due to hardship but due to misappropriation of funds on her part. The only way would be to have a high level manager approve it.

I’m interested in hearing what WaMu gets out of this deal.

PLEEEEASE –you conservatives in other states…..

come on over to the Pacific coast…

The weather is great….

We can get this great state back

Ms. Augustine, 44 years old, who runs a child-care service out of her home.

And people trust this woman with their children after this disclosure? And we wonder where some of our kids get their ideas? Wow!

Re: Michelle Augustine – wouldn’t the bank simply apply the loss of the house she willingly let go into foreclosure to a lien on her new house? And if that bank so desired, couldn’t they force foreclosure on the new house to pay off the debt of the old (which would be way more than the $200k she’s currently in the hole for).

Indeed. This is the other half of the mortgage irresponsibility equations: the lenders apprently find it easier to let the deadbeats off the hook for whatever the foreclosure auction brings. Their losses are then covered by the interest and fees paid by their responsible customers, and of course the federal taxpayers. Yet another reason to NOT bail them out (the borrowers OR the lenders).