Tanta at Calculated Risk does some digging, and wonders why mainstream media missed important facts, like why the cop said (with no proof) that the couple must have had an adjustable rate mortgage, why the husband said he had no clue about the foreclosure yet had filed for a BK three times recently - and so on.

Tanta doesn’t have the answers yet, just questions, plus justifiable outrage at the predetermined spin by mainstream media as to what the story is about. In this case, the spin is the suicide must be due to a predatory lender, even though there is no proof of this and Tanta, after a little research, shows the couple do not appear to have been in anything approaching serious debt, plus he was making good money.

I do not doubt for a moment that Carlene Balderrama was under severe psychological stress. Whatever kept her going through six years of an inability to make her mortgage payments, clearly the reality of the day of foreclosure sale was too much to bear. What I do object to is the transformation of this story into an urban legend about “predatory lenders” and the effects of an RE downturn based on no evidence whatsoever. I object to these reporters’ unwillingness to deal with the facts available to them that surely complicate this currently popular narrative. I object to cops running off at the mouth with unsubstantiated claims and a husband and his co-worker heaping blame for the family’s financial woes on a dead woman who can no longer defend herself, and I surely object to it when it gets used to slander a mortgage servicer who was, apparently, the only party involved who ever took this woman seriously enough to call 911.

While you may sympathize with the predatory lender spin, her primary point is that media often twists a story to fit their predetermined bias, and that that doing so for an apparent suicide is sickening.

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Foreclosures within 10 miles of military facilities in the US are four times higher than than in other areas.

“Think about how much stress comes with a foreclosure, and then imagine you’re walking the same tightrope while being employed in Baghdad,” said Paul Rieckhoff, 33, the head of Iraq and Afghanistan Veterans of America and a former 1st lieutenant with the Army’s 3rd Infantry Division.

Steve Earle - Rich Man’s War

Bobby had an eagle and a flag tattooed on his arm
Red white and blue to the bone when he landed in Kandahar
Left behind a pretty young wife and a baby girl
A stack of overdue bills and went off to save the world
Been a year now and he’s still there
Chasin’ ghosts in the thin dry air
Meanwhile back at home the finance company took his car
Just another poor boy off to fight a rich man’s war

Tip: The Blue Voice

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This was as of the end of 2007. The foreclosure rate is probably even higher now.

“We’re seeing people give up even before they get to the reset because they couldn’t afford the home in the first place”

Some homebuyers were clueless, and really didn’t understand what they were getting into. Others figured prices would keep rising so they could pull out money or sell the house for more. Or maybe they got hustled by high pressure sleazy mortgage brokers.

Some say the government needs to intervene to save homes that are foreclosing, as was done in the depression, with a moratorium on foreclosures. But if that happens, the mortgage market will dry up, seems to me. Why would anyone fund a mortgage in a time when the government was actively negating the validity of existing mortgages? A moratorium would hurt banks (pass me a hanky, you say?) but that in turn will slow their ability to make loans, which will also hurt the economy.

So what happens to the presumed millions facing foreclosure in 2008?

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A bank CEO says, unlike in previous economic downturns, once homeowners go 30 days late on the mortgage they never make another payment. In previous times, they might have kept paying, remaining 30 days late. But no more. They just walk away from the home, and mail those jingling keys back to the bank.

This is something quite new. In the past, people would try to hold on to the house. However, they probably also put 20% or so down and thus had a financial stake in the house.  But many current homeowners in trouble today probably got NINJA loans (No Income, No Job, No  Assets) and might have only put a few thousand dollars down, if that. Some put nothing down.

Thus, the homeowner has little or no money in the house, can live in it for several months as foreclosure happens without paying anything, then walks away. Sure, their credit is damaged for a while, but if their mortgage just reset to a higher level they probably have no real choice anyway.

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