Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
A foreclosure is the absolute, worst thing you can do- it is the worst choice you can make when it comes to your credit profile, and will affect your life for a minimum of seven to ten years- even bankruptcy is a better option (it can be discharged a year after it is over). Foreclosing on a home is truly the stuff of nightmares. Rent your home for under market value, offer it to an investor and give up some of your equity if you have any, or anything else you can do to avoid it.
I agree and I use the public records to check people out as well and if I see a foeclosure even 10 years ago, I see a red flag and many times you see people having more financial trouble than only 1 foreclosure.....
The author can give all his well ment advise but in the end he is not telling people what the best thing to do is which is act responsible and make sure you don't do stupid things....I even wonder if his advise is totally legal....or maybe setting him self up for being suit...
Leaving aside someone who has to move for job reasons, I don't understand the psychology. Go into foreclosure so that you can move to a better house? How do you even qualify for the mortgage then?
I agree with you and how good is this advise when you are raising kids...tell them to try and cheat out of a mortgage and living for free....I wonder how good these people sleep at night and how high their other bills are and what if all of a sudden it isn't working the way they want and are getting homeless...do we have to take care of the people who wanted to see how far they could stretch their financial freedom and free living...No way for me...no sorry or pitty from me!!!
Leaving aside someone who has to move for job reasons, I don't understand the psychology. Go into foreclosure so that you can move to a better house? How do you even qualify for the mortgage then?
You qualify for the new house before you stop making payments on the old house - you fraudulently tell the bank that you intend to rent out the previous home, and after you are safely in the new home you stop paying on the old one and mail them back the keys. Classic buy and bail tactics.
Yes, you bought the house for more than it's worth now. But you still have the option to live in it, or rent it out. Wrecking your credit and causing a lot of trouble don't make sense to me, unless you just can't make the payments.
Lulu,
Rents rarely cover mortgage payments plus the cost of maintaining the house. Many people are stuck paying more than they can afford on a house that is sinking in value. If they have no or negative equity, it's easier in some cases to walk away. Not all people who walk away are scumbags. If someone loses a job, it might become impossible for them to keep up. And many people feel lied to and ripped off by the banks and the government, and rightly so.
Just like in the last depression, the wealthy will be taken care of while the poor will be left to starve. I know for myself, even being sick these last few days is terrifying. It means I can't work to earn what little money I do to keep me going. I know there are many others who feel the same. There is no net under our high wire.
Greed on the part of the homeowners factor into this debacle as well. Back in the "boom" times, a lot of people thought they could/should get twice, three times or quadruple what they paid for their house because their neighbor, brother-in-law, and accountant did. If banks weren't coming up with these "funny" loans, they would have had to drop their prices because most people who earn $75,000 cannot afford a $500,000 house. This whole thing was a train wreck waiting to happen --- and it did.
sorry to hear about your illness woof woof. Good luck!
Quote:
Originally Posted by Woof Woof Woof!
Lulu,
Rents rarely cover mortgage payments plus the cost of maintaining the house. Many people are stuck paying more than they can afford on a house that is sinking in value. If they have no or negative equity, it's easier in some cases to walk away. Not all people who walk away are scumbags. If someone loses a job, it might become impossible for them to keep up. And many people feel lied to and ripped off by the banks and the government, and rightly so.
Just like in the last depression, the wealthy will be taken care of while the poor will be left to starve. I know for myself, even being sick these last few days is terrifying. It means I can't work to earn what little money I do to keep me going. I know there are many others who feel the same. There is no net under our high wire.
Like I said, I have sympathy with people who have real problems (lost a job). But some of these upside down folks don't seem to understand the basic fact that houses flucuate in value and you take a small but real risk when buying one. Another failure of our education system I guess.
Like I said, I have sympathy with people who have real problems (lost a job). But some of these upside down folks don't seem to understand the basic fact that houses flucuate in value and you take a small but real risk when buying one. Another failure of our education system I guess.
Lulu,
It is true. There are a lot of fools out there when it comes to fiscal responsibility. I know a few, but try to avoid them.
I like to think of the banks as drug dealers and the people signing up for the loans as drug addicts. Who do you blame?
Me personally, I think it was the government's responsibility to rope in the drug dealers. Instead they kept making it easier and easier for them to supply the dope. And the banks were gamblers. Now the government is bailing out the gamblers, who are walking away with serious money.
I agree with ya but it's not a failure of our education system, it is rather the success of our education system. We are taught to systematically consume, to chase paper money dreams and to scoff at the idea that a house is just a means to satisfy a basic need for shelter. The education system has worked as it was intended. There is no expectation of accountability when the system tells you all you get for opting out of that business agreement is a 'credit ding'. We know full and well these people are not going to be homeless the next day, they'll be renting tomorrow, and many would have obtained a second property before bailing on the first one.
For the credit fear-mongers in the room: credit is only valuable when you need it. People only need it because they live in an inflation-ridden system where you need two people to put food on the table and to afford that which the system tells you that you 'need', which by virtue of your eroded purchasing power you have no choice but to finance (our education system teaches us that opting out of a purchase is NOT an option). If houses weren't artificially inflated, I wouldn't need to finance the freggin thing to begin with, making the argument for keeping an eye on the proverbial rabbit-out-of-a-hat we call "credit score" an irrelevancy. Likewise, if unloading the property in 5 years was not a concern to the majority in this country, such value fluctuations would not exist in my opinion, which is the ultimate irony.
We only assign morality equivalency to other people's credit because our own perceived ability to purchase that which we don't need is mortgaged against such credit rating. If we didn't need credit (and we wouldn't if we lived in a fully accountable non-inflationary currency system) the pharises would step down of their ivory towers telling people not to foreclose on their homes and care for their almighty credit score. But in a system where debt is money (our system) and credit is currency we are taught, as little kids, to keep walking past the poor people on the shady side of town (after all we're taught poverty is a moral choice), but to give a sh%t about our credit scores. What an abortion of a system and moral relativism. A cursory look at that 9th grade US history book we slept on during class would have taught us that this is not the first time in our country's history that we are held hostage to the private interests of a few and that listening to the words of a few dead men from 120 years ago is a cheaper and better alternative to the conventional wisdom of consuming without asking why and buying in a nice school district as if it was the recipe of our soul's salvation. There's some free education for y'all.
Stop mistaking the symptom for the disease; humans are greedy. If you want to curtail such behavior you need to change the paradigm, i.e. remove the incentive for people to view a house as an ATM machine. You do that by overhauling our monetary policy and system, not by frowning at people because they are selfish and are better off foreclosing on a sunk property than throwing money at a failed business decision. Even in the face of these times, I still have a tough time convincing peers and co-workers that housing values do not eternally increase, so pursuing that avenue is a losing game. But if instead we had a monetary system that didn't inflate values and incentivized commoditization of utilities (houses, food, human lives), people couldn't squeeze casino-style equities out of the roof where their children live and would move on to other schemes and allow the rest of the country to afford the ability of dwelling in an inflation-free set of walls with a roof on top of it. Problem solved. Are the banks and govt cronies ever going to allow that to happen? Heck no. But you keep focusing on your neighbors genetically hard-wired tendency to look out for himself, that'll solve everybody's problems, sure.....
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
