Strategic default
YouWalkAway.com has been around for a few years and Realtors should be aware of their “strategic default” process in the event a consumer approaches them in an effort to short sale or buy another home.
Although as we mentioned, the service has been around for a while, it is gaining a new wave of attention as Fox News ran a special by reporter John Stossel called “Freeloaders” several times over the weekend in which he interviews the founders of YouWalkAway.com and calls them “disgusting” to their faces. To which they explain the legitimacy of their company.
According to the website, “you will immediately know the exact amount of days you have to live in your house payment free. We stay on top of your walk away plan and keep you up to date with weekly progress emails. We also will notify you if the lender is taking longer than expected subsequently giving you more time in your home payment free.”
Stossel then interviewed one of their clients who could afford the payments but values had dropped in his California neighborhood, and when his bank didn’t approve a loan modification, he chose to contact YouWalkAway.com. To be fair, there are likely other clients that have been in situations where strategic default was necessary, it is not uncommon these days and not all defaults are Californians who can afford to pay but choose not to.
What the company offers
Clients pay $995 and receive 30 minutes of legal advice, then the companies file the legal papers to get lenders to stop calling the client. They reject the idea that they are a scam, that they’re not buying defaulted homes, they’re just helping homeowners strategize. The catch? Clients may be enrolled in a “credit repair program.”
Consumerist.com reviews YouWalkAway.com as “Not recommended. Troubled homeowners should refi, get a lower rate or sell, and walk away from ‘you walk away.’” Is that fair or does this appear to simply be a quick way to help homeowners file papers and trategize their impending exit?
Brian Block
March 28, 2011 at 12:40 pm
Just happened to catch John Stossel’s show last night and “Freeloaders” was excellent viewing. Thanks for the reminder about YouWalkAway — I was going to check out their website today after watching yesterday.
I have to agree with Stossel… disgusting.
Steve C.
July 16, 2011 at 11:01 am
I dont think its disgusting at all. What the federal government has done with our tax dollars for a long long time..is disgusting. We're in this mess because of the Feds..not the Banks. Its a financial decision in most cases brought upon people as a result of lending practices. Businesses make bad decisions all the time and restructure their debt, etc. Is that disgusting too ?
Sara Bonert
March 30, 2011 at 12:47 am
I watched “Freeloaders” this weekend and found it very interesting too! I really liked how he presented all the examples used. But also made me sad on a lot levels when the examples showed that people think this freeloading way of life is not just okay, but their RIGHT.
I wish they would have given YouWalkAway just a little more airtime because I liked where Stossel was going with the interview. I think the legality of it could be argued either way (but I’m no lawyer). However the morality is what gets me and for the interviewee to say that it doesn’t affect the greater neighborhood when people make a strategic decision (VERY different than when one has no choice) is just ‘disgusting’.
RayRay
February 10, 2012 at 5:23 pm
Why is it disgusting when individuals do things just like the corporations do? What you do affects you and your family and your livelihood "Pursuit of happiness" according to our founding fathers. Corporate greed along with individual greed proven many times over (that is classed as a sin in any religion) and the years of deregulation (democracy? I don't think so…empowering the powerful:yes)have brought us to something else very close to our reasons for revolting from Great Britain. That is, when government no longer does its job of serving the interests of the people, (all the people) it is not only a right to change or overthrow it but a responsibility to do so. If the government and corporations are not taking these houses back, foreclosed or not, the individuals in the mess ought to do it.
srichey
April 6, 2012 at 9:58 pm
I bought my place in 2004 and have decided to do a “strategic default”. I originally bought the place for the tax benefit etc. I’ve held out thinking the market is going to turn around — It is now 8 years later. Enough is enough.
Not sure why I have to either “refi, “sell” when I absolutely can’t because I am so far underwater. I did everything right and like any smart businessman, i have decided to cut my losses and move on.
John Stossel and Faux News have always been “disgusting”. They had their own agenda wrapping up “YouWalkAway” up in their yellow journalism.
Pingback: The New York Times Has Only Scratched The Surface On BofI Holding… | Bigboardalerts