New Financial Plan: Walk Away from Your Mortgage

I am torn. I don’t know whether I should post this link or hope it dwindles into obscurity (unlikely). The website says it all:

You Walk Away promises to help homeowners walk away from their current mortgage with no debt, no strings, and says ballsy things like this:

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.

My italics. I know we talk a lot about how many mortgages never should have been made in the first place, but that does not mean that walking away and gleefully living “payment free” is the solution. The responsible solution is to refinance, negotiate a lower rate or a deed in lieu of foreclosure, or sell the house. If none of those things work, then the bank may foreclose if it wishes, but the consumer will feel the effects on their credit report and possibly through residual collections. Foreclosure ain’t pretty, folks, no matter what this website would like you to think.

You Walk Away also says “You will be enrolled in our affiliate credit repair plan. They have removed thousands of foreclosures from their clients [sic] credit reports.” Maybe this is true, but I cannot think of a legal way that the “affiliate credit repair plan” could be doing this.

I would love to see the magic letter they send to the lender to stop them from harassing borrowers. (I would also love to take a red pen to their website.)

Edit: Michael Shedlock of Mish’s Global Economic Trend Analysis called up You Walk Away to find out more:

I spoke with John Maddux a “senior advocate” with You Walk Away (YWA) about the business. As one might expect it is booming. For $995 one receives a half hour of legal counsel where individual strategies are mapped out and all the laws pertaining to recourse vs. non-recourse loans as well as judicial procedures are explained to the customer. YWA also files the necessary legal papers to stop mortgage companies from calling and informs you immediately of how many days you will be able to stay in the house for free. Should the lender take longer to process the documents, YWA will keep you informed of any extra time.

With the amount of money at stake, the fee seems reasonable for the services provided.

Maddux informed me that YWA is currently operating in the state of California only, but Nevada and Florida will soon be coming online. Eventually they expect to be nationwide.

(FYI, $995/half hour is probably the highest hourly rate in the world.)