  Leland_palmer Member Username: Leland_palmer Post Number: 574 Registered: 08-2004 |
David Josar / The Detroit News http://detnews.com/apps/pbcs.d ll/article?AID=/20090317/METRO /903170366 Kwame Kenyatta, a city councilman and newly announced mayoral candidate, and his wife have handed the bank the keys to their North Rosedale Park house and walked away from the mortgage. Kenyatta spent part of Monday cleaning the empty house, which Monifa Kenyatta bought for $225,000 in late 2004, and which has begun to fall into disrepair. Monday morning, a downspout had fallen off and mail and advertising circulars piled by the home's front door. By afternoon, after Kenyatta was contacted by The Detroit News, the spout was fixed and the two-story brick home was free of clutter. Kenyatta and his wife walked away from a monthly tax, insurance and mortgage payment of $2,600, one year before the interest would jump to 11.625 percent from 6.625 percent and the payment would hit $3,600. Kenyatta said that even though his monthly payment has remained the same for years, he felt it made no sense to remain in a house whose value had plummeted to $100,000. | ||
Rid0617 Member Username: Rid0617 Post Number: 415 Registered: 03-2008 |
Did they not read the contract and notice the interest would jump to over 11% | ||
Zrx_doug Member Username: Zrx_doug Post Number: 865 Registered: 03-2008 |
All of a sudden I'm feeling less thrilled with Mr. Kenyatta's ability to handle the city's decision-making.. Crap. | ||
Dannyv Member Username: Dannyv Post Number: 611 Registered: 08-2007 |
If this is how he conducts his personal business, why would anyone trust him with the keys to the City? | ||
Lmichigan Member Username: Lmichigan Post Number: 4294 Registered: 10-2003 |
O wonder which opposition research team delivered this story to the News? lol Obviously, it looks like someone realized that Kenyatta could f%ck up the race, for them. I mean, the man's been in the race for what? Two days, and gets this hit piece against him that quickly? Anyway, definitely not a good look for Kenyatta. Though, you never know in politics. He might actually get sympathy from those in the city going through the same process. I'm sure he could spin this making himself the victim of Corporate America and russle up some ACORN support. This is his support base, after all. (Message edited by lmichigan on March 17, 2009) | ||
Chitaku Member Username: Chitaku Post Number: 2141 Registered: 03-2006 |
what a jack-ass | ||
Mauser765 Member Username: Mauser765 Post Number: 3056 Registered: 01-2004 |
he needs to take off that damn hat too. | ||
Gildas Member Username: Gildas Post Number: 413 Registered: 12-2004 |
No more respect for the man. His salary on the council is enough to pay the mortgage, he choose to walk away from a legal contract he signed. | ||
Lodgedodger Member Username: Lodgedodger Post Number: 1688 Registered: 05-2008 |
Agreed, Gildas. | ||
Defendbrooklyn Member Username: Defendbrooklyn Post Number: 983 Registered: 11-2005 |
Way to help out and inspire Kenny...Semi-knowing this city and its politics, he has the twisted potential to become a hero... With this type of decision making and foresight he is a perfect fit to keep Detroit thriving. | ||
Novine Member Username: Novine Post Number: 1251 Registered: 07-2007 |
I didn't know that all of the previous commenters are privy to Mr. Kenyatta's personal circumstances to a degree that they have any ability to pass judgment on his financial circumstances. Neither you or I have any idea what's happened in his personal life that might have led to he and his wife reaching this decision. As for those who thinks this brings into question his decision-making abilities, I would say that someone who has the sense to walk away from a financial untenable situation has more sense than many other people in this world. As for the attitude that he has some obligation to fulfill the mortgage, he has zero obligation to destroy himself financially to make that mortgage payment. It's not as if those who made him the loan have been left with nothing. They will take possession of the home. If they over-valued the home and can't recover the full value of the loan they made to Mr. Kenyatta, that's the risk that they took when they made the loan. | ||
Gravitymachine Member Username: Gravitymachine Post Number: 1758 Registered: 05-2005 |
well, that was a quick mayoral campaign | ||
Mwilbert Member Username: Mwilbert Post Number: 514 Registered: 11-2007 |
I agree with Novine. Walking away from a mortgage where you are down 50% is probably almost always the right move. However, I don't think Michigan is a non-recourse state, so theoretically the lender could come after him for a deficiency judgment. I don't think they do that very much, but if this case gets a lot of publicity, I suppose they might want to make an example of this case. (Message edited by mwilbert on March 17, 2009) | ||
Sumas Member Username: Sumas Post Number: 813 Registered: 01-2008 |
The mayoral bid makes sense now, he needs new diggs. | ||
Thefishwrap Member Username: Thefishwrap Post Number: 21 Registered: 11-2008 |
^^^ plus a higher salary apparently. | ||
Rjlj Member Username: Rjlj Post Number: 838 Registered: 11-2003 |
By walking away, he is contributing to the problem and driving the value of his neighbor's homes down. And this from soemone who is supposed to be a fighter for the city. But we all know today, it is never one's fault, always blame someone else or make your problem someone elses problem. | ||
Gnome Member Username: Gnome Post Number: 2508 Registered: 08-2007 |
 Posted this on his other thread ... but in looking at his house, I now see why the City never fines Moroun for blight violations. | ||
Lodgedodger Member Username: Lodgedodger Post Number: 1689 Registered: 05-2008 |
>>If they over-valued the home and can't recover the full value of the loan they made to Mr. Kenyatta, that's the risk that they took when they made the loan.<< No, that's the risk a homeowner takes when purchasing a home. An agreement (promise) was entered into. Both parties agreed on the price and financing. It is a risk we all take. Walking away is reneging on a promise. I know there are always extenuating circumstances. However, if more were concerned about keeping their promises, we might not be in such financial problems today. Yes, I'm judging. Our home has lost value too, but we stay because we promised the bank we would pay the amount at which we purchased the home. I like Mr. Kenyatta, but I don't agree with this decision. | ||
Ohudson Member Username: Ohudson Post Number: 225 Registered: 09-2004 |
Although I wouldn't do it, I understand why someone would leave a home that lost 55% of its value in 5 years and will see a rate increase from 6% to 11%. Just crunching the numbers it'll take 35 years (if real estate values increase at a 2.5% yearly increase, assuming current values hit bottom). You'll be off of foreclosure shit list in 7 years. After 7 years (if you stay in the home) you'll still be $110,000 in the hole. Even if the bank sells the home for $100,000 and comes after Kenyatta for the rest 7 years from now he still won't be any better or worse off. YEAR HOME VALUE 1 $225,000.00 2 $101,250.00 3 $103,781.25 4 $106,375.78 5 $109,035.18 6 $111,761.06 7 $114,555.08 8 $117,418.96 9 $120,354.43 10 $123,363.29 11 $126,447.38 12 $129,608.56 13 $132,848.77 14 $136,169.99 15 $139,574.24 16 $143,063.60 17 $146,640.19 18 $150,306.19 19 $154,063.85 20 $157,915.45 21 $161,863.33 22 $165,909.91 23 $170,057.66 24 $174,309.10 25 $178,666.83 26 $183,133.50 27 $187,711.84 28 $192,404.64 29 $197,214.75 30 $202,145.12 31 $207,198.75 32 $212,378.72 33 $217,688.19 34 $223,130.39 35 $228,708.65 This is definitely not a good look for Kenyatta, I would never announce I am running for mayor when I am being foreclosed on. That's really dumb! (Message edited by OHudson on March 17, 2009) | ||
Kelton Member Username: Kelton Post Number: 21 Registered: 10-2008 |
For the most part, I am in agreement with Novine. None of us know the full story here or what other circumstances caused him to make this decision. After reading the article, I'm aware that he tried to work something out with a mortgage company but was unsuccessful. He's been renting elsewhere since December, yet just now announced he will run for mayor, so perhaps he did feel this incident will not affect his chances. Maybe he felt if he stayed he'd just continue to lose even more money while living in a home that needs some attention to maintenance and could continue to fall in value. As for staying in a home simply because a person has promised the bank they would pay back the amount at which they purchased the home, there are a lot more reasons for staying in a home besides having made a promise. For us, I love the neighborhood, have fantastic neighbors and friends in the area, love my trees, wouldn't want to walk away from all the updating we've put into it, couldn't sell it easily at this point, etc. etc. We've been in our home for over 20 years so we are fortunate not to have a huge mortgage payment due to buying at a high price as the Kenyatta's did. It sounds to me like he simply had no choice unless he stayed and let it ruin him financially. Mauser - Your only comment on this subject was "he needs to take off that damn hat too." Why? What does that have to do with anything? That's just inflammatory and is the kind of statement that causes someone like BlacksoulX (if I remember his name correctly) to react so strongly. Though I'm new to posting here, I've been reading the forum for a few years now and it really disturbs me to see a few people here take every opportunity to "stir the pot." I won't be surprised to have someone blast the newbie for daring to criticize those who have been here longer than I. It's just my thoughts on this subject offered up in the same spirit as almost everyone else has expressed theirs.  | ||
Detroitbred Member Username: Detroitbred Post Number: 274 Registered: 06-2008 |
There are many of us in that position now...the thought of walking away from my home under any circumstances is something I just can't get my mind around. Our home has lost at least 30% of it's value, but for us walking away isn't an option. | ||
Originalg313 Member Username: Originalg313 Post Number: 58 Registered: 08-2008 |
A fence that is 8 feet is not illegal. | ||
Swingline Member Username: Swingline Post Number: 926 Registered: 11-2003 |
Good comments, Kelton. Especially the one about the hat. What's up with that Mauser? Mr. Kenyatta has shown leadership and integrity while serving as a city councilperson. He consistently demonstrates an ability to consider all sides of an issue before attempting to make a principled decision. (Latest example: supporting sale of Cobo Center to regional authority and also supporting court challenge to mayoral veto of council's Cobo resolution.) The mortgage foreclosure matter is fair game, though. It raises a question of judgment. Here's a little math. He was paying $2,600/mo in P&I, taxes and insurance. The article states that his taxes were about $450/mo. Let's assume that he paid $200/mo for insurance. That leaves $1,950/mo for P&I. At 30 years and 6.625%, that monthly payment finances approximately $305,000. Mr. Kenyatta bought the house in 2004 for $225,000. So, he apparently refinanced in the next couple of years to an amount that suggested a 35% appreciation in the home's value in that short time. But anybody with any familiarity with Detroit real estate understands that Mr. Kenyatta's house, even in North Rosedale, was never worth close to $305,000. And what was the extra borrowed $80,000 spent on? Why get involved in an ARM with a guaranteed 5 point rate hike? Mr. Kenyatta and his wife clearly made some extremely poor financial decisions with regard to their house. It's a legitimate issue for a mayoral campaign. | ||
Johnlodge Member Username: Johnlodge Post Number: 9638 Registered: 10-2003 |
quote: I always thought he was making a statement.  | ||
Iheartthed Member Username: Iheartthed Post Number: 3864 Registered: 04-2006 |
Our home has lost at least 30% of it's value, but for us walking away isn't an option. Even if your house is now worth half of the amount you owe on the mortgage? | ||
Detroitchef Member Username: Detroitchef Post Number: 149 Registered: 09-2008 |
who held the gun to his head to sign a crazy ass adjustable mortgage? He was a loon years ago, and only the fact that Conyers and that bunch are crazier makes Kenyatta look lucid. Even his hat is a cheap ploy to get honkies allworked up. And tell me that thing on his face is not cancer. | ||
Denbytar64 Member Username: Denbytar64 Post Number: 150 Registered: 03-2008 |
Way to set an example. Just walk away cuz the value dropped, and you were not smart enough to read the contract so you walk away....thats right your first name is Kwame...guilty by name association. How did you even get elected in the first place. You can not even keep your financial affairs together. Did you really think Obama was going to pay your mortgage? Man up Dude. | ||
Thejesus Member Username: Thejesus Post Number: 3786 Registered: 06-2008 |
"If they over-valued the home and can't recover the full value of the loan they made to Mr. Kenyatta, that's the risk that they took when they made the loan." That is indeed part of the risk they take, but the bank is still entitled to the entire loan obligation, regardless of what the home turns out to be worth. If it turns out the bank made a bad loan, it just means it will be more costly for them to recover the money they are owed. If Kenyatta fails to meet his loan obligation, the bank can go after his personal property until his obligation is met. You often hear people who are underwater on their home loans say things like, "well, I'll just give the house back to the bank." The problem is the bank didn't buy the house. The homeowner did. The bank simply provided the financing. Taking a security interest in the underlying asset just made it possible for the bank to provide the homeowner with financing at a cheaper rate. (Message edited by thejesus on March 17, 2009) | ||
Gnome Member Username: Gnome Post Number: 2509 Registered: 08-2007 |
According to campain info, the address is, 18534 BRETTON DRIVE DETROIT, MI 48223 If you go to Google maps, you'll see Mr. Kenyatta mowing his yard ... oh Mauser rejoice... he's not wearing his Kofia hat. Nice neighborhood btw | ||
Detroitbred Member Username: Detroitbred Post Number: 275 Registered: 06-2008 |
When you default on a mortgage, what happens the next time you want to buy or rent or lease something.....the ramifications can't be good for your future home or car intentions. Walking away just isn't that easy, it has long term effects. If you had all kinds of money that you could use to pay cash for everything you need, you probably wouldn't be "walking away" from your contractual obligations | ||
Dianeinaustin Member Username: Dianeinaustin Post Number: 224 Registered: 02-2008 |
FYI-Bobby Ferguson lives at 18944 Bretton. | ||
Hamtramike Member Username: Hamtramike Post Number: 103 Registered: 12-2003 |
Passing judgement? We don't know his personal circumstances? "Kenyatta said that even though his monthly payment has remained the same for years, he felt it made no sense to remain in a house whose value had plummeted to $100,000." He didn't lose his job or fall on hard times and is not a victim of predatory lending, he just doesn't feel like paying anymore. " agree with Novine. Walking away from a mortgage where you are down 50% is probably almost always the right move" Great Advice! "I would say that someone who has the sense to walk away from a financial untenable situation has more sense than many other people in this world" Another gem. I am not sure what bothers me more, the fact that he can pay and chooses not to, or the fact that he chooses not to take care of of his property. | ||
Hamtramike Member Username: Hamtramike Post Number: 104 Registered: 12-2003 |
....and for those that think he is a victim of predatory lending practices....While agreeing to an adjustable rate mortgage (from 6% to over 11%)is not a great deal to get into, I would argue that one who cannot understand interest accrual and a ammoritization table probably shouldn't be running a city with a billion dollar budget. | ||
Locke09 Member Username: Locke09 Post Number: 114 Registered: 02-2009 |
He might truly have difficulty paying. At the time they purchased the house, hadn't his wife taken his seat as Wayne County Commissioner? I know she doesn't have that seat anymore. With a salary of $81000 and two kids in college, if his is the only salary now, his family of four might be dealing with less than $5000 per month after taxes/deductions. That still seems like a lot, until you consider the $3600 per month mortgage and almost $500 per month taxes. I wouldn't assume he can pay this and take care of the other things he needs to do as well - like eat and have lights and gas. But it might not be a good idea to ask for control of the finances of a city if you know you have this hanging over your head. | ||
Kevgoblu Member Username: Kevgoblu Post Number: 203 Registered: 02-2007 |
And what of his neighbors in Rosedale? Now they have another empty house on their block, further driving down their property values. More than likely the bank will put forth minimal effort to ensure the property is maintained. Everyone will suffer, based upon his decision to walk away. And I might be a little sympathetic of his plight, if he behaved in a way which even remotely reflected a semblance of responsible behavior. Rather, he walked away from his $225K house, contributing to the decay of his neighborhood, and moved into a home valued (in 2005) at $295K. | ||
Hamtramike Member Username: Hamtramike Post Number: 105 Registered: 12-2003 |
Who buys a house based on a temp salary? Do we need more decision making like this? I would make an exception if this was some figure head position in small town USA, but the leader of one of the largest cities in the nation really requires a sharp individual. | ||
Novine Member Username: Novine Post Number: 1252 Registered: 07-2007 |
"Passing judgement? We don't know his personal circumstances?" No, you don't. Is his decision a bad one for the neighborhood? It might be although a home in his neighborhood is a lot more likely to end up with a new owner as compared to other neighborhoods. But again, he has no moral obligation to destroy himself financially, which is where he would be in a very short time. Or would you like to explain to us why Mr. Kenyatta should continue to pour money down into a house, money that he'll never recover? | ||
Sumas Member Username: Sumas Post Number: 816 Registered: 01-2008 |
Such a pretty house looking so shabby make me sad. I am pretty sure that city code calls for 6' fence restrictions but you can apply for a varience (Message edited by sumas on March 17, 2009) | ||
Southwestmap Member Username: Southwestmap Post Number: 961 Registered: 01-2005 |
"Or would you like to explain to us why Mr. Kenyatta should continue to pour money down into a house, money that he'll never recover?" It is a very recent innovation that a house should be a growing investment. This from the Wall street Journal March 15, 2007: If you bought a house in Los Angeles in 1990, just as the real-estate market turned downward, you would have had to wait a decade for your home's value to return to what you paid. • If you bought in Rochester, N.Y., in 1980, you would have seen only a mediocre 4% annual growth for the next 25 years. • If you bought in Dallas in 1986, as the oil boom went bust, your home wouldn't have appreciated at all before 1998. Losing value in a house sometimes happens. You can't just walk away and not face consequences. | ||
Daddeeo Member Username: Daddeeo Post Number: 584 Registered: 09-2008 |
This just doesn't look good. Some say "Any publicity is good publicity" but I don't think that's the case here. | ||
Waltbaby01 Member Username: Waltbaby01 Post Number: 18 Registered: 06-2007 |
What's ironic is that me and my ex-wife went to an open house at that exact same house on Bretton back in 1993. At the time, the house was listed for $115,000 and there were a lot of things that needed to be fixed back then.....too funny. I could've bought the house back then for $115,000 and sold it to him for $225,000 in 2004? That would've been a nice little profit.....well, i would've had to split it. | ||
Johnlodge Member Username: Johnlodge Post Number: 9643 Registered: 10-2003 |
Just to clear things up, the non-euphemism of "walking away from" is "abandoning". It's how all those buildings and houses in the city ended up the way they are. | ||
Gazhekwe Member Username: Gazhekwe Post Number: 2971 Registered: 08-2007 |
Wait a minute! "he has no moral obligation to destroy himself financially" Who is teaching ethics these days? Since when is it actually moral to take money, promise to pay it back, and then decide it isn't worth your while to do so. That is the same as stealing the money you borrowed. You still have the home. Its value on paper has no impact on whether you can live there or not. If the payments are too high, then let's promote renegotiation rather than abandonment. The loss of value should be shared by all the parties to the loan. The buyer should not be fully liable for the loss of value, since technically, they are not the sole owners of the property, they share it with the bank on a sliding scale of loan value versus equity. Therefore, in my world, the bank is partially liable for the loss, and that should be adjustable depending on the equity compared to the original value, or some such sliding scale. If the buyer walks away, the bank must accept the current value and that includes deterioration and salability, which further reduce the value, so there should be incentive to attempt renegotiation of terms to achieve a more favorable loan for the buyer. I am looking for the new administration to start leading in that direction, so that banks are required to renegotiate terms based upon some proration of loan amount to current value. | ||
Ocean2026 Member Username: Ocean2026 Post Number: 157 Registered: 11-2008 |
This is an intentional political act. He can now live on the streets and have a huge constituency of the dispossessed. or "If you vote for me you will end up like me" | ||
Bobl Member Username: Bobl Post Number: 646 Registered: 07-2008 |
He did what many are and will be doing. No problem with that. The problem is: do we want someone who has not been able to handle his own personal financial affairs to be responsible for the survival of the City Of Detroit at this critical time? Cockrel is looking better each day, when a fair comparison of the candidates is made. | ||
Gnome Member Username: Gnome Post Number: 2510 Registered: 08-2007 |
Why is an avowed communist buying a house in the first place? Shouldn't he have been in a co-op? oh, yeah his wife applied for NEZ status. As did Sheila Cockrel, the entire Beatty clan, and everyone's favorite city contactor, Bobby Ferguson. http://www.michigan.gov/docume nts/treasury/2006NEZHomesteadA ctivityList07Year_194860_7.pdf Some very nice neighborhoods. | ||
Southwestmap Member Username: Southwestmap Post Number: 962 Registered: 01-2005 |
I live in SW Detroit. Should I have applied for this? Should I still? What is it? | ||
Spiritofdetroit Member Username: Spiritofdetroit Post Number: 1255 Registered: 11-2006 |
the house Cockrel applied for is for sale now, $250,000. I wonder why she's selling. | ||
Maxdetroit Member Username: Maxdetroit Post Number: 99 Registered: 08-2007 |
LOL, JohnLodge! What is there about these incompetent fools that they show up for "work" dressed like the village council of Botswana--or worse. Anyone ever hear of Standard Business Attire? Yes, everyone knows you're b-l-a-c-k, now get over yourself. From Collins' Disney Princess tiara, to the fat-old-lady satin MuMu gowns, Kenyatta's little hat, etc--every day is Halloween, complete with skeletons falling out of closets. What a freak show. | ||
Swingline Member Username: Swingline Post Number: 930 Registered: 11-2003 |
Maxdetroit, can you direct me to the Standard Business Attire regulations you are relying on? I think that you have very astutely noticed something that can be made into a campaign issue this summer. I'd like to get as much information as I can on this. Good job. | ||
Maxdetroit Member Username: Maxdetroit Post Number: 101 Registered: 08-2007 |
Maxdetroit, can you direct me to the Standard Business Attire regulations you are relying on? CLUE: BARAK OBAMA, CONDOLEEZA RICE, KEN COCKREL STANDARD BUSINESS ATTIRE---YOU KNOW IT WHEN YOU SEE IT. | ||
Softailrider Member Username: Softailrider Post Number: 296 Registered: 02-2007 |
Does that mean you can't ever wear zoot suits? | ||
Softailrider Member Username: Softailrider Post Number: 297 Registered: 02-2007 |
Shoot......That house has a dirt front yard. Doesn't look like Rosedale Park, looks like the yards further west off Fenkell, when you get into Brightmore. | ||
Benfield Member Username: Benfield Post Number: 151 Registered: 06-2008 |
People don't like Kenyatta's hat? He's the only person with any sense of style on a City Council known world-wide for moo-moos, dacron pant suits, and Captain and Tenille hats. Kwame Kenyatta wears his hat well. | ||
Mschievous Member Username: Mschievous Post Number: 304 Registered: 04-2008 |
So are contracts useless now? Agreements don't matter? Good thing we're past that handshake thing, we'd be really screwed huh? If this is acceptable, I hope none of us EVER sells a home on a land contract. There's a bigger picture here and I'm afraid we're all lost if we don't see it: what about the moral obligation to keep your word? Can we all just "walk away" from a deal not of our liking? This is so sad... | ||
Detroitjim Member Username: Detroitjim Post Number: 70 Registered: 02-2008 |
He always looks as if he just got through burning one. | ||
Eastsideirish Member Username: Eastsideirish Post Number: 15 Registered: 03-2009 |
I agree with Benfield. Out-of-town friends have asked me about the crazy fashion circus the City Council puts on. Who wears moo-moos to work? And those stupid hats that they wear even while the City Council is in session? What a joke. |
