- May 25, 2002
- Professional Status
- Certified Residential Appraiser
I let you read the rest of the article. It is funny and a little dirtyDespite objections from consumer advocates, in the last two weeks California judge Jed Clampbet has sent 142 delinquent homeowners to state prison for up to three years each, for failing to honor their home mortgage obligations.
Most of the former homeowners were shocked to find they could be suddenly locked up for employing the common “walkaway” strategy, where homedebtors whose no-money-down adjustable-rate teaser mortgages are about to reset to full actual interest rates simply stop making payments but continue living in their homes rent-free for up to eight months before being evicted, then try to skip town leaving the bank holding the bag.
Under the anti-fraud provisions of the 1969 California Real Estate Loan Statute, section 7, chapter 13, such behavior is indeed criminal and can be prosecuted. Until recently the law had not been actively enforced, but due to the tidal wave of foreclosures the district attorney is now cracking down hard on mortgage scofflaws.