Strategic Default: Heather BakerI don't fault Ms. Baker for walking away. It's the right financial decision, she had no skin in the game, and the banks got exactly what they deserve. However, can she really afford it? Using traditional guidelines for affordability, Ms. Baker should have yearly earnings of...
$465K * 0.36 = $167K
It's possible she earns this, but I seriously doubt it. Can she truly afford a $465K mortgage? She was nothing more than a house debtor that got caught in the middle of a massive housing bubble.
2009-12-25: Walking Away From The House She Can Afford
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.
...
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.9100 Granite Ct, Waldorf, MD
5 beds, 3.5 baths, 2,302 sq ft
Sale History
07/28/2006: $465,000
11/12/2003: $289,000
11/24/1998: $199,948
2 comments:
Maybe you should call this the Hall of "NO SHAME" since people are totally shameless in SCAMerica today.
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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 read a story about this in the Post. I was shocked to see that the angle presented appeared to be identifying this as a victimization. I wanted to laugh (and cry).
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