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» VISIT US ONLINE @ DSNEWS.COM WHAT KEEPS BABY BOOMERS FROM WALKING AWAY? As more and more baby boomers approach the golden years, many find themselves making a choice they never imagined—whether or not to walk away from their mortgages. A client survey by YouWalkAway.com revealed the looming prospect of a fixed income drives many older struggling homeowners to strategically default while they still have something left. The study found that, compared to younger funds in order to maintain an underwater property. Nearly half—48 percent—of respondents said they depleted at least a large portion of their savings before defaulting. However, after walking away, few seem defaulters, baby boomers are more likely to deplete their savings before making the decision to default, leaving them with little to no money during their retirement. According to the survey, younger generations see walking away from an underwater home as a strategic business decision, but boomers appear more concerned about the morality of defaulting on a mortgage contract. When asked how difficult it was to reach a decision, 75 percent of respondents said they struggled over the morality. As a result, many boomers inadvertently remove their "safety net" of 401ks and other professional pick-me-up. Start your day with a Start your day with the most current and critical news on the mortgage default servicing industry from DSNews.com. Sign up for our e-mail newsletter and get the top stories delivered direct to your inbox every day. to regret the decision. Fifty-three percent of those surveyed said they would make the same decision to walk away if they were 20 years younger. An overwhelming 97 percent said they would recommend their decision to a family member facing the same circumstances. One client started a blog on her default experience. In it, she expresses satisfaction with her decision nearly two years later. "We don't think about it much anymore, it's just a house we used to live in, and now we live in another one. It's kind of funny to me now to think of how much I and I know others stress over the 'ethics' of walking away [. . .] So we choose to be thankful for a home we can afford that's full of a family who has really pulled together for the things that count most in life. No regrets." The highest percentage of respondents (34 percent) was 50-59 years old. ICBA ARGUES CFPB RULES NOT APPLICABLE FOR COMMUNITY BANKS pending regulations on high-cost mortgages since they were not responsible for the mortgage crises, the Independent Community Bankers of America (ICBA) stated in a release. In July, the Consumer Financial Protection Community banks should be exempt from Bureau (CFPB) proposed rules for high-cost mortgages, which were determined based on interest rates, points and fees, or prepayment penalties. The proposals for high-cost mortgages Register to receive your Daily Dose at DSNews.com include a ban on prepayment penalties and a general ban on balloon payments. Late fees would be capped, and there would be restrictions on charging fees when consumers ask for a payoff statement. In addition, consumers would be required to receive housing counseling before taking out a high-cost mortgage. In a comment letter to the CFPB, ICBA argues that community bank portfolio loans should be exempt, so they can maintain a position in the mortgage market. to further regulate the mortgage industry to prevent these abuses from occurring in the future and further stabilize the housing market," ICBA wrote in the comment letter. "Nevertheless, the reality is that more stringent and complicated mortgage requirements will further stymie the housing market and community banks' flexibility in providing mortgage loans to their customers." In the letter, ICBA also said the CFPB's "ICBA understands the intent of Congress financial institutions to correct unintentional violations to avoid the expense and burden of litigation for accidental errors. ICBA also argued for balloon payment definition of points and fees is too broad and should be clarified for open-end and closed-end credit. In addition, the group suggests allowing loans if they're held in portfolio until maturity, stating, "Community bank balloon payment mortgage loans are low-risk loans that community banks have used to serve the unique needs of their customers for decades." 49

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