Detroit councilman walks away from mortgage Candidate for mayor saw value of home tumble as payment

[Dr.Phool]

Source: AP-MSNBC

updated 1 hour, 3 minutes ago

Detroit councilman walks away from mortgage
Candidate for mayor saw value of home tumble as payment set to rise


DETROIT - It was their dream home, a two-story, four-bedroom colonial in one of Detroit's nicest and most stable neighborhoods.

But then, one day in December, City Councilman Kwame Kenyatta and his wife packed up their belongings, locked the doors, mailed in the keys and walked away — adding another vacant house to the thousands in a city hard hit by the nation's mortgage crisis.

"We're already underwater when it comes to what we're paying on the house versus what the house is worth," Kenyatta said.

Around the country, the practice, sometimes referred to as "mortgage walking" or "jingle mail," appears to be growing. But for Kenyatta, the decision could do more than hurt his credit rating.

It could damage his bid for mayor of Detroit this summer, particularly since he has been one of the city's most vocal supporters of measures to improve neighborhoods and clean up blight.

(more)

Read more: http://www.msnbc.msn.com/id/30311735/

[w4rma]

1. Screw the banks. The banks did this to themselves and for some reason their execs are profiting.(nt)

[dkf]

2. That is your money the banks lent out.

If you don't care about getting your life savings back then you should be crowing about the fact that banks are getting screwed.

[w4rma]

16. If I don't have more than the FDIC insured $250K in the bank, I don't care what happens to it.

And, I'm not dumb enough to keep more than $250K in a bank that's going under, anyway.

[dkf]

19. How many top banks do you think the FDIC can afford to go under?

If the tax payers bail out the top banks, they prevent them from going to the FDIC thus saving your butt and mine.

[w4rma]

23. Let them go to the FDIC and let them reorganized under new management. And let them be sold off in

pieces. These "banks" are too big for the nation's good. And they are using the 'bailout' money to give to their already overpaid execs. I bet they wouldn't need bailouts if their salaries and dividends weren't so high.

[dkf]

24. Did you realize the FDIC has a certain amount of funds?

They had to extend their line of credit with the Treasury. If Wachovia had failed that would have been IT. If Citi fails that will be IT.

The FDIC was trying to increase the fees it charges, but the banks can't afford to pay the amount so they had to bring it back down.

How do you think the FDIC runs anyway?

http://www.consumeraffairs.com/news04/2009/03/bank_closings04.html

FDIC Warns It's Running Out of Funds
Flurry of bank failures could burn through FDIC's reserves

March 4, 2009

The safest place for money right now is, at least theoretically, in a bank backed by the Federal Deposit Insurance Corporation, which insures deposits up to $250,000. But hold on, FDIC Chairman Sheila Bair warns the agency’s funds could be quickly used up in a flurry of bank failures.

This week Bair warned that “a large number” of bank failures may occur through 2010 because of “rapidly deteriorating economic conditions.” That makes it necessary, she said, for the FDIC to levy a one-time fee on member banks.

“Without substantial amounts of additional assessment revenue in the near future, current projections indicate that the fund balance will approach zero or even become negative,” Bair said in a letter to the Independent Community Bankers of America.

[w4rma]

27. I know exactly how the FDIC is run. And I know that the TARP funds could be used to it shore up.

They'll need to be reorganized and split up, anyway. It's better to just get it done, rather than giving them infusions of money so that they can keep paying their execs huge bonuses.

[truedelphi]

13. That "for some reason" is very easy to nail down to specifics.

Specifically, the team that Obama has assembled is a really bad choice.

Bernanke, Geithner, Rubin, Sumemrs, Gensler, et al are not on the side of the middle class.

Somewhere in Hyde Park NY, a former President is rolling in his grave.

[w4rma]

18. Obama and the DLCers are failing on the economic front. (nt)

[SheilaT]

3. He also apparently had an adjustable

rate mortgage, since the article mentions that his "manageable" $2,600 per month mortgage was about to increase by $1000.

[WriteDown]

4. Apparently....

the city council pays very well if 2600 was "manageable."

[peace13]

5. Ahhh where does it say if your house loses value you don't have to pay for it?

That is some *ucked up thinking. Now if you don't have a job that is a different matter. If you can't pay is different than you don't want to pay. How about my student loan? I didn't get the good job that I wanted, should I mail off the diploma and tell them tough titty's?

[jb5150]

12. There is a difference between

Won't pay for it...and...Can't pay for it.

[dkofos]

14. It's in the small print.

The same small print that says your credit card company
can give you a GUARANTEED 0% on balance transfers for the
life of the loan, or until they decide to change the interest
to 29.9%.

[Barack_America]

6. Given the state of Detroit's finances, how he handles his personal finances is big issue...

If he's going to be running for Mayor.

The city is in need of a mayor with real financial smarts. Looks like this guy is lacking.

And he's a city councilman, which is also bad news.

[Hugin]

7. Quite the verbose headline there, Dr.P.

:rofl:

Did they try to put the whole darn article in the headline?!?!

[Dr.Phool]

9. It looked like it.

[Christa]

10. I thought it was only me

or the 4/20 treat I am having :party:



:smoke:



:rofl:

[Hugin]

11. By golly! A whole day dedicated to 4:20?!?1/!(uno)!i!?!

What will they be thinking of next! I :lurve: America!

:rofl:

Edit: Fixing punctuation has become a way of life for me.

[imdjh]

8. Something is messed up here

Bought for $225,000, the home nose-dived in value to $100,000, according to Kenyatta. Its manageable $2,600-a-month mortgage soon was about to soar about $1,000.

With a zero down loan at 7% the PI on this house would be $1497/mo so either he had some kind of screwy loan, or it's a 10 year loan. Or the taxes in Detroit are outfuckingrageous, in which case he got what he deserved as a city councilman.

[Fire1]

17. I thought I read the article. Where did it say it was a zero down?

This sounds like a typical 'ARM.' :shrug:

[truedelphi]

28. Isn't it true that even if U have a conventional mortgage, when you miss payment(s)

Then they can increase the interest? After all, the interest is based on your status as a bill payer -when your credit rating changes for the worse, your interest rates rise.

[east texas lib]

15. Nothing like leading by example...

His credibility has taken a slight dive.

[McCamy Taylor]

20. This experience should resonate with voters---makes him more empathetic to their plight

[Abq_Sarah]

25. He walks away from his obligations

Because he's decided he doesn't want to pay anymore and that makes him "empathetic" to people who are busting their asses to pay their mortgages?

He's nothing more than a scumbag.

[Rage for Order]

21. The people of Detroit should check his credit as part of the vetting process

Isn't that what happens to us little people when we apply for a job? We have to sign a document that authorizes the prospective employer to check our credit, education, job history, criminal history, urine or hair, and other things I probably left out. Sounds to me like this individual is no longer fit to be mayor because he is obviously irresponsible and an unacceptable risk. Unfortunately for him, walking away from problems isn't a viable strategy when you're a mayor. It's okay though; he can work on repairing his credit, and maybe in a few years he will be fit to be employed in a position of trust again.

[960]

22. Then he should walk away from wanting to be mayor of a city in serious financial trouble.

[Liberal_in_LA]

26. Yep