A Site's New Tack: Walking Away from Mortgage
MELISSA BLOCK, host:
Well, here is a company that's trying to convince some homeowners that losing their home might not be so bad. It's called YouWalkAway.com. The Web site features pictures of happy couples and their babies and these questions: Are you stressed out about your mortgage payments? What if you could live payment-free for up to eight months and walk away without owing a penny? Unshackle yourself today, it says, and use our proven method to walk away.
Eric Weiner wrote an article about this for npr.org and he's with us here now. Eric, foreclosure usually seen as a last resort; here, it's being presented as a choice and a good thing.
ERIC WEINER: Right. And this is a radically different approach to foreclosure. As you say, it's been seen as something that people stress about and are ashamed of, and would do anything to avoid. And this company, as you mentioned, is saying, hey, you should consider foreclosure as a choice, it might actually be good for you and your family.
BLOCK: This a new company, just started up last month?
WEINER: It did. Shortly after the New Year. And it was started by two businessmen and attorneys in Southern California. And they clearly saw an opportunity amid all of the foreclosure debris. There are nearly a million Americans right now who are somewhere in the foreclosure process and many more who may soon be going that path. And this company essentially will walk you through the foreclosure process. They don't buy your home or anything like that, they merely provide you with information. They'll send a letter, for instance, to the bank that's coming after you and say that you shouldn't call these people. They'll give you time with an attorney and with an accountant. And they do all of this for the fee of $995.
BLOCK: I'm on their Web site right now, and if you go to their frequently asked questions section they say this: It sounds too good to be true, how do I know this isn't a scam? How do we know this isn't a scam?
WEINER: Well, that's a good question. It doesn't appear to be a scam in that they're pretending to be anything other than what they are. But what are they doing? They are providing information, information that is readily available out there or you could hire your own accountant, or hire your own attorney. I've talked to a number of consumer watchdog groups, though, and they are concerned about this company.
And what they're concerned about is that it's sending the wrong message, that it is essentially discouraging distressed homeowners from pursuing all other options before going into foreclosure. And also, that they are essentially playing down the aftereffects of foreclosure. On their Web site, they use language to the effect of, this will all be behind you soon and you can make a fresh start. Well, you might be able to, but it might take as long as 10 years. That's how long a foreclosure will remain as a huge black mark on your credit rating.
BLOCK: They do say on their Web site that people can typically buy a house four years after foreclosure, maybe two years with government loan agencies doing the lending. Is that true?
WEINER: I think that's optimistic. From my discussions with consumer watchdog agencies, they say that it will typically be longer than that, somewhere between five and 10 years, and it really varies from state to state. But if you think about it, you don't really what to have something like that on your credit rating. And what this company is trying to do is really pretty remarkable if you think about it. They're trying to change the whole American attitude towards foreclosure.
BLOCK: I would imagine, Eric, that there will be other companies just like this springing up very soon.
WEINER: Well, business is good. They say they get 25,000 hits a day on their Web site. They don't say exactly how many customers they have. They're getting a lot of attention in the media as well.
BLOCK: NPR's Eric Weiner. Thanks so much.